Why digitally enabled business transformation is tough?

To digitally transform a business, company's have to reframe culture, build new capabilities, and create a new business canvas. Let's review why digitally enabled business transformation is tough?

As you saw in the post titled How digital innovation and disruption works?, there is no clear theme or pattern of how disruption occurs. A multitude of technologies and disruptive developments converge creating a fly wheel that captures a given market bit-by-bit. The corporate history is full of stories of resilient companies and their ability to transform. However, digital transformation may be the toughest one yet. Why?

Reframing Culture

The anatomy of an iPhone explains it all. If you unravel an iPhone, it is that beautiful and successful amalgamation of many competencies — material science, sensors, electronics, industrial engineering, software, platform, user experience, and services — all layered into one. It is almost impossible to build or even conceive an iPhone in isolation.

If you consider each of the above competencies as a vertical that requires immense depth of expertise, bringing each expert to work together within the frame of a vision that requires a breadth of experience, expertise, and ability to product manage multiple work threads. It requires speed to market, testing multiple iterations, and relentlessly focusing on creating nothing but the best user experience.

Organizations have to rethink the way of they frame their entire culture. It is a lot harder for companies that have an inherent culture as opposed to the startups that can just start with a clean slate.

New set of Capabilities

Drew Houston made a 3 minute video of how Dropbox would work and shared it with early technology adopters. Dropbox is a slick file sharing and backup platform. The digital folklore that follow the Lean Startup Principles, call it the Minimally Viable Product (MVP). According to Techcrunch, Dropbox gained a waitlist of 75000 users who validated that there was a consumer problem. Dropbox (DBX) went on to become a publicly listed company. That mindset is in stark contrast to perfecting a product, a big unveil, and launch in the market.

Stitch Fix is another billion dollar startup challenged the notion of people think about personalization in clothing. You log into an App, answer a few questions, enter your measurements, and Stitch Fix begins to find styles for you. A traditional company would have fashion designers and tailors. Stitch Fix augmented them with Data Scientists.

Lean Startup, Artificial Intelligence, and Product Management are just few of the new age skills. Organizations need to build a new setup of capabilities.

A new business Canvas

The emergence of Internet of Things (IoT), Social Media, Analytics, and Mobile Commerce, and Cloud also known as ISMAC has led to very non-traditional business models.

If you’ve followed Apple and Samsung, they both spar in the courts for protecting their Intellectual Property or IP. Samsung makes screens and processors for Apple. They compete and quarrel at the same time. Cargo, a snacking company partnered with Uber to distribute snacks. A snacking company wouldn’t think about Uber as a sales channel. This is even more prevalent with AirBnB.

Marketplaces, Market Networks, Subscriptions, As a Service, and more business models emerge by the day. Class Pass created a network of gym’s and a subscription service for customers to unlock. Instead of going into one gym, people like us could now go to one of the Class Pass’ network of gyms.

The business canvas which includes your partners, suppliers, customers, consumers, product design, and revenue models is all beginning to get challenged as well.

Why is this hard?

Startups with a clean slate have an early mover advantage and large organizations have the scale, money, market, breadth, process, and other advantages. Large corporations, struggle with the dichotomy of having to run their current businesses in the most efficient way while managing the ever changing disruption landscape.

Rethinking and scaling the way you work, do business, building new capabilities while balancing the current and future isn’t all that easy is fundamentally changing every human and there by the entire organization in one swoop. It is sometimes referred to as Digital DNA, Digital Transformation, Business Transformation in the Digital Age, and much more. Irrespective of what you call it, this transformation may be the most toughest one yet!


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