Imagine it’s the early 20th Century and electricity is all the rage. Companies are hiring Chief Electricity Officers and the hottest topic for boards is how to develop an effective Electricity Transformation Strategy.

“Everybody’s going electrical,” John Lowe, the CEO says to his newly appointed Chief Electricity Manager, Frank. “We can’t be left behind. We have to go electrical.”

“I agree, Mr. Lowe, but we can’t simply go electrical for the sake of it. We have to think deeply about this. It’s more than just replacing oil lamps with light bulbs.”

“But it’s a no brainer, Frank. Let’s just put electricity in the factory and replace those smelly, dangerous oil lamps.”

“Electricity should make us rethink the factory, Mr Lowe. Have you ever wondered why our factory is beside the river?”

“No. All factories are beside rivers.”

“There are two reasons. One is transport. One is power. With electricity we have power. Transport is shifting to trains and soon it will be roads.”

“And what does that mean, Frank?”

“It means that we don’t have to have our factory beside a river anymore. We can have it inland, near a railway station. Land is cheaper inland, and we’ll be closer to the new transportation hubs.”

“That’s an interesting idea, Frank! Wow! This electricity thing is big.”

“We can also build our factory flat, with just one story.”

“But that doesn’t make sense.”

“It doesn’t make sense in the context of water power, Mr. Lowe. Water technology dictates that your factory has to be tall and slim, but with electricity we can be wide and flat. That will allow us to more easily design production lines. It will make for the more efficient movement of raw materials within the factory.”

“That’s amazing!” Electricity is going to change how we work, what we work on. It’s going to radically reshape business and the economy. We have to move away from the river, move inland.”

Right now, a lot of organizations have Digital Transformation Strategies and Chief Digital Officers. But making what you have digital is not a digital transformation strategy. Turning print documents into digital PDFs is most definitely not a transformation strategy. Digitizing everything and putting it online is not clever.

The revolution that digital is driving should force us to rethink everything. Digital is flexible, malleable, adaptive. Digital is not physical. It lives in the network. It is cheap and getting cheaper. It is small and getting smaller, which means that it will be everywhere and in everything. Digital is the network and everything that has something digital in it (whether it be humans, fridges or cars) will become part of the network.

Digital is an abundant resource and the more abundant it becomes the more powerful and all-embracing is its network and reach. This makes digital a real challenge to traditional organizations who are built on physical principles of managing scarcity and exerting power through proprietary tools that allow them to organize better.

Ironically, most citizens are better organized today than most employees. The customers have better tools than the employees, and, of course, there are far more of these customers.

Are you still working by the river, thinking that all you need to do is get electricity in? Think again. Time to move inland. Time to move to the network.