Feature
With 2012 just behind us, organizations are feeling the pressure to update their aging ways of engaging with the marketplace more than ever before.
Digital Trends
The data shows the broad trends our businesses must cope with effectively to survive, much less thrive: Nielsen recently reported that we spend more time in social media than any other online activity. What's more, this share of time is growing more rapidly than anything else we do today.
In close conjunction, the great device upheaval of our age, smart mobile devices, are now on target to become the next primary touchpoint for our workers and customers within only a year or two. Another major shift, social customer care, while still a minor segment of the industry, is by far the fastest growing one and is likely to represent a top three support channel for customers within the next few years.
For its part, marketing is perhaps poised for the biggest overhaul of all our organizations, with customers having moved to new digital channels such as Facebook and Twitter in such large numbers and so rapidly, that marketing efforts that do not to reach people in social media will likely fail to reach them elsewhere with much effectiveness at all.
As I examined recently in Forbes, the customer journey is in the process of one of the biggest overhauls in at least a generation, yet businesses are having a very difficult time keeping abreast of the Big 5 trends that are reshaping the global marketplace today.
The reasons are complex, but generally boil down to a misalignment of culture, inclination and core competencies. Being a digital business is very different than the traditional way we've been able to stay operating until recently.
Building a Digital Strategy
Last year, here on CMSWire, I took a look at what it was going to take for the typical company to begin the transition to a more fully realized digital business, meaning one that uses digital technology like a native to connect, engage and co-create with its ecosystem of stakeholders.
The fundamentals of digital business itself are actually fairly straightforward. It consists of a digital ecosystem (open supply chain, strategic data ownership, social capital and other network effects), dynamic value flows, a default stance to incorporate constant change in an emergent and decentralized fashion, and a data-driven view of the world. All of these must be key elements of how we re-imagine our businesses for the very near future.
Related: Kickstarter is a fantastic example of this model, which combines both concepts to create a scalable and high velocity digital factory for new businesses using both co-creation and fund-raising transactions.
Hierarchies to communities
The power of social capital being formed in social media in all its forms is reshaping who is in charge, who has the bulk of control over value creation, and how companies must cultivate and engage their stakeholders. Digital organizations understand that peer production is the most powerful force in business. Companies like Intuit and Procter & Gamble are upending industries with this idea.
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Marketshare to network effects
Digital networks have different rules for who has the strongest underlying business. The underlying principles are power laws, meaning that those that are a little bit ahead often have many times more control and influence.
Supply chain to ecosystem
The sum total of digital assets, including connections to people and data, and the ability to control, monetize and leverage them is more important than the traditional supply chain in many businesses even today. Powerful examples of this include Amazon's Web Services division and Apple's app market.
A new kind of stakeholder experience
The push-based models for marketing and selling in particular is shifting to a pull based model that is far less siloed, is more continuous, and more deeply engaging. Mobile devices and apps in particular are putting customers in continuous contact with our services and capabilities.
Companies that focus on enabling the shifts to these core competencies of digital business are likely to significantly outperform those that do not. But all of these entail the Innovator's Dilemma, namely that it's hard to blow up one's fundamental way of doing things internally, when they seem to be working well enough. Most companies wait until their competitors force them to make the changes by outcompeting them with better and more innovative new products and services. But in today's fast moving, network effect driven world, the price of staying still is to fall behind, quickly and dramatically.
I've taken to calling traditional organizations that make the shift to digital business at scale with a new term, "next-generation enterprises." I put together a list of what new concepts they should have been experimenting extensively with in 2012, as well as the broader concepts I enumerated here a year ago. Those that haven't started on these now have a year of catch up to do. Unfortunately for some, this may be too late.
Fortunately, developing a strong digital strategy now, deeply imbued with the social and mobile revolution in particular, can help organizations sort out, integrate and accelerate their efforts. For most industries, as technology change continues to accelerate, there is little time to waste.
Editor's Note: Interested in catching up with Dion's predictions from last year? How Digital Businesses Will Evolve in 2012: 6 Big Ideas
