By now, every organization understands the need to undergo digital transformation to better serve customers and operate a better business.
But a fundamental challenge with “digital transformation” could bite you if you don’t pay attention.
Transformation implies a finite mindset and suggests that once you’ve “transformed,” your work is done. Too many organizations make the mistake of thinking they’ve done enough — and move on.
Digital excellence requires ongoing effort and improvement.
No Time to Rest in Digital Transformation
The growth of digital everything and the need for innovation leaves no room for stasis. Your organization can’t stop evolving. Any business, at any time, must be ready to adopt new technology or digital business practices. You must constantly innovate on top of existing digital products and services.
A more accurate phrase to describe the digitalization of a modern business might be “digital evolution” — which suggests that becoming the best digital business you can be is an infinite, ongoing process.
It’s a mindset that is essential for success, separating Active Digital Businesses from Passive Digital Businesses. The former allows you to be a market titan — a leader who sets the agenda in your space — while the latter means you risk being disrupted by a smarter, faster competitor.
A History Lesson on Digital Disruption
Blockbuster is the classic example of a Passive Digital Business.
The video rental service was run out of town by Netflix seemingly overnight, when streaming became the norm and consumers had access to personal, connected devices. While Netflix was making millions of digitally connected customers happy, Blockbuster failed to reinvent its business.
This wasn’t really a failure of technology — it was a failure of leadership to set a new course for the business. All the technology in the world couldn’t help a company whose idea of incremental revenue was billing you $1 for every VHS tape you didn’t rewind before dropping it into the after-hours box.
Digital disruption doesn’t always happen so quickly.
So many other industries are bleeding to death slowly — from big box department stores to newspapers. Macy’s recently announced it’s closing hundreds of stores, grasping the harsh reality that in the digital-first era of Amazon and e-commerce, the department store’s real estate is more valuable than selling suits and shoes.
Now Macy’s is investing heavily in creating omnichannel shopping experiences to appeal to digital-first customers, and focusing its attention on digitalization.
Case studies like Blockbuster and Macy’s teach us that disruption is inevitable. The strong survive by evolving, and those who fail to adapt become extinct. Active Digital Businesses are the definition of strong, and they view certain business strategies with a distinct point of view.
How an Active Digital Business Thinks
Below is a guide to how Active Digital Businesses (ADBs) approach key business functions and metrics:
The sky’s the limit for an Active Digital Business. ADBs believe that startup-level growth is always achievable, and that past is prologue to a bigger, better, more profitable future.
We live in a world where everything, from the taxi industry to the construction industry, is being disrupted left and right. In that reality, there’s no reason that any business shouldn’t have the opportunity to achieve great year over year growth, despite its maturity. Consistent reinvention and innovation yield unlimited potential.
Many traditional customer satisfaction survey methods are too passive. They don’t ask the right questions.
ADBs understand that customer satisfaction must be measured with an active line of questioning. Instead of asking customers “Are you happy?” they ask, “What would make you leave us for a competitor?” ADBs aren’t afraid to operate from a position of fear. They don’t look in the rearview mirror to assess happiness, they look ahead to the potential road any customer could take ... that would lead them right into a competitor’s hands.
Speaking of competitors, ADBs know that at any moment, a competitor could introduce a new product, service or tool that disrupts the entire market overnight. (Why did Cisco kill the highly popular Flip camcorder in 2011? I say it realized that the new video recording feature in the iPhone 4 spelled doom for its one-trick device.)
ADBs constantly expect disruption, and plan ahead with investments in R&D labs, and an unrelenting focus on what’s next. Take CVS for example. The company has an entire digital lab dedicated to improving the customer experience with new digital solutions. Never mind that CVS began as a retailer in the early ‘60s — it's anticipating (and inventing) the digital future of its retail business right now, before someone else beats it to it.
ADBs approach their digital architecture as if they’re building a Lego tower, typically thinking about an underlying cloud-based infrastructure, foundational solutions like web content management or commerce, additive marketing tech applications that stack on top, and a flexible mindset ready to add, remove or improve tools to meet the evolving needs of the business and customers.
Nothing is set in stone. ADBs are quick to adapt new technologies, and know that a rigid technology stack is the enemy of evolution and innovation.
Digital is changing the way we live and work everyday. Organizations that embrace change, and opt for evolution over complacency, will weather any storm. ADBs, like professional athletes, are always training to become better and more competitive. In a world of active and passive digital businesses, which team would you rather bet on?