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Rapid digital progress may well turn out to be our generation's version of the survival of the fittest. Countless examples have proven that adopting and embracing digital change tends to result in increased prosperity and profitable growth. The alternative is to remain stuck in the old ways of doing business. A sure way of losing touch with your customers, and a sure way to becoming obsolete.
We’ve already witnessed the demise of many. You'll be familiar with the typical go-to examples: Kodak is out of business. Blockbuster went bust. With the rise of Amazon, the high street shops in your town are probably next. But what about your own company? How are you staying ahead of the undeniable technological revolution that’s coming your way?
Global research by Massachusetts Institute of Technology and Capgemini shows us compelling numbers:
Ultimately, any and all companies merely exist by the grace of their customers, clients, patients and members. It is your responsibility to find new and better ways of adding value to their lives. And with technology at the core of your company, a thriving business is right within your reach.
According to PTC, executives say the top benefits of digital transformation are improved operational efficiency (40%), faster time to market (36%) and the ability to meet customer expectations (35%). Speed and adaptability are key in today's world.
Digital transformation is nothing more than going from A to B faster, smarter and more efficiently by adopting and levering the right digital technologies. On the other hand, digital transformation is not about technology. It’s about the customer.
While technology plays a key role in transforming businesses, it's a means to an end. Successful digital transformation is when a business implements only that technology which is essential for sustainable business growth. In other words, implementing new technology for the sake of implementing new technology is pointless, expensive and prone to failure.
Ideally, digital transformation initiatives result in profitable growth and a future-proof organization. Unfortunately, 70% of digital transformations fail, most often due to resistance at leadership level, operational level, or both.
Digitalization is not a process carried out at the back-end of the company. Or just in the IT department. Successful digital transformation is an outcome of digital leadership and an organizational culture where technology is seen as a driver, not as a support act. The fundamental idea behind digitally transforming a business is not to replace, but to revolutionize the workplace as we know it. It's about reinventing how your business thinks, operates, collaborates, markets and sells.
In the end, you should always strive to transform your business in such a way you increase customer value, one way or another. To be clear, customer value relates to whatever your customers are willing to pay for.
Do your customers value speedy deliveries? Then optimize your production and delivery processes through technology.
Do your customers value helpful customer service? Then streamline your customer support department through technology.
Remember, us mere mortals live and die by the grace of those who repeatedly buy our products!
According to Gartner research, 56% of CEOs say digital improvements have led to increased revenue. Adobe found that digital-first companies are 64% more likely to achieve their business goals than their peers. Management consulting firm McKinsey found that digital transformation and a focus on customer experience can generate a 20-30% increase in customer satisfaction and economic gains of 20-50%. Deloitte claims that two-thirds of a company’s competitive edge comes from its customer experience. And extensive research among CMOs found that experience-led companies have 1.6 times higher customer satisfaction rates and 1.9 times (!) higher average order value.
Digitally-savvy companies simply perform better. In every sense of the word. Their operations are leaner, faster and more cost-efficient. They grow faster. They're more effective. They’re better at understanding what their customers want and creating an excellent customer experience. Evidence from all over the world proves that digital leaders generate more revenue, they’re more profitable, and they’re more valuable to investors. And that's why digitally transforming your business is important.
From a functional perspective, digital transformation is typically driven by the CIO, CEO and CMO. But what about COOs who want to build leaner, faster and more efficient operating models? Or CHROs who want to revolutionize their digital talent management processes? Or CSOs who want to take the opportunity and transform their traditional sales team into a digital sales organization?
The conversation around digital transformation shouldn't be limited to certain functional groups. Successful transformations can only happen when the entire company, from top to bottom and back, adopts a digital mindset and puts technology at the core of its operating and business models.
In practice, we do tend to see certain types of personalities instigate digital change. Unsurprisingly, they're usually the younger, more digitally-minded, and courageous executives. Do you have some of these leaders present in your leadership team?
Conversely, and also unsurprisingly, "digital blockers" are usually of a certain, rather easily recognized type. They'll sit back, arms crossed, spewing phrases such as "We've always done things this way" or "We're doing just fine without all this modern hocus pocus". Although investing in technology for the sake of investing in technology is pointless, not accepting change for the sake of not accepting change may be even worse. If you value your company's long-term viability, empower your digitally-minded leaders. As a matter of fact, putting the right tech-savvy leaders in the right strategic positions is one of five main differentiators between successful and unsuccessful digital transformations.
Digitally transforming a business is ultimately a people thing. So, in your next leadership meeting, why don't you put "digital" on the agenda? Start by asking yourselves simple yet impactful questions such as:
If only Blockbuster had put a bet on online streaming back in the day, they might have still been here. When it comes to inevitable digital progress, completely ignoring trends, sticking your head in the sand and not doing anything won't help. Sooner or later, more tech-savvy rivals with stronger business models and more efficient operating models will outcompete you. It's happened to multiple industries already:
The list of already digitally disrupted industries goes on and on. The more interesting question however, is who do you think is going to be next?
Will it be you? Will you recognize the impending change in time? And what will you do to lead, rather than follow?
AutoConcept is a growing insurance company with proprietary insurance system. HubSpot became the obvious complement.
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