Who's winning at digital transformation?
Did you know that 88% of the Fortune 500 firms that existed in 1955 are no longer there? They have either gone bankrupt, been part of a merger, or fallen lower down the list. That’s a high proportion of companies who were not successful in future-proofing their business.
We are now witnessing the 4th industrial revolution, and seeing fundamental changes in the way we live, work and communicate. There have been many companies who were once at the top of their game, yet they failed to innovate, became complacent, or were too slow in adapting their business for a digital world.
- Kodak – Once a leader in their field, selling photographic equipment. Despite several opportunities to innovate, (they invented the first digital camera but failed to develop and share it), they hesitated, and competitors overtook them. They filed for bankruptcy in 2012 and returned in 2013 as a smaller company focussing on commercial custom.
- Blockbuster – Turned down an offer to buy Netflix in 2000, because the CEO believed it was only a small niche business. They didn’t evolve their business into a digital model and filed for bankruptcy in 2010.
- General Motors – Overlooked opportunities to improve the quality of its product, failed to adapt to changes in customer needs, and didn’t invest in new technologies.
- Borders – an international music and book retailer. Opened too many stores and was late to the party with e-readers.
And the winners? These companies have embraced digital, and transformed their business to meet customer needs and expectations:
Domino’s pizza launched an ‘anywhere’ platform to help customers order food from numerous channels – including tweets, texts, amazon echo and smartwatches. So as well as the ‘traditional’ website route, customers can use pretty much any device they want to place an order. They’ve digitally transformed their business and shown a clear commitment to technology by becoming the first pizza company to deliver by drone.
A digital leader in their industry, Capital One invested heavily in technology and innovation. They were the first US bank to implement a mobile wallet using contactless payments, and they were also the first to offer voice-activated financial transactions using Amazon’s Alexa virtual assistant.
Pfizer Inc. has a successful track record with embracing digital initiatives and have revolutionised their field. A collaboration with IBM, to harness their machine learning, saw the company develop a system of sensors and mobile devices to provide doctors and researchers with critical disease symptom information in real-time to find valuable connections between symports as well other clinical data.
With ambitious plans to become more than just an athletic apparel company, Under Armour introduced ‘connected fitness’ - a platform to track, analyse, and share personal health data on customers’ phones. The valuable data enables them to identify fitness and health trends immediately – such as the walking trend that started in Australia, which allowed them to adapt their marketing activity accordingly before their competitors even knew what was happening.
What’s the key to digital transformation success?
“The irony is that while digital is all about technology and automation, the transformation is really about people, and how you lead and inspire them. The first step in cultural change is understanding that it is people first, and that it is your job to find ways to involve and motivate your team”, says Justin Wright, Americas CIO of Arcadis.
So even though digital transformation means different things to different people, and every business will have a unique strategy, the first step is not about changing skillset, it’s about changing mindset. To succeed, you’ll need buy-in from every employee, and every department in your organisation. It’s not just about replacing some services with a digital process, there needs to be some significant changes in business culture too.
The future is unknown. The way we operate businesses in 20 years’ time will look very different to how we operate now. Change and competition will be unrelenting, and there will be curveballs we can’t prepare for. But what we can do is accept that change is here, and change is constant. A flexible mindset is the best preparation for the digital transformation journey.
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