The main issue people generally have when it comes to Digital Transformation involves knowing who is responsible. Business leaders know it isn’t their job:
It has the word digital in it. It’s the CIO’s responsibility!
I’m not at all technical, I can’t help with anything digital!
That’s like thinking I actually want you to break your leg when in reality I’m supporting you. If you are ”technical” enough to read this article, you’re technical enough to be a part of the Digital Transformation team.
Believe it or not, Digital Transformation isn’t about knowing how technology works. Digital Transformation is about knowing what technology does. And applying that knowledge to your business. This doesn’t mean you won’t need a deeply technical partner to help you execute on your plan. You will. But it’s critical that the technical person not be the one leading the project from the beginning.
Digital Transformation isn’t a Game
I’m going to assume for now that you have played solitaire. Manufacturers included the game on all computers since around 1990 and we can still play the analog version (i.e., a deck of cards.) But if this isn’t ringing a bell, click here. I’ll wait.
Did you know that the best solitaire players (Klondike version) win about 43% of the time? Imagine if this is your business, and you are told that for every $100M of opportunity, you will win $43M of that. That sounds pretty good, right? But, it turns out that 80% of solitaire games are actually winnable. If you were a better solitaire player, you could almost double your winnings — $80M. However, we started with the assumption that the best players win $43M, so if you keep playing by the rules, that is the best you can do.
The rules of the game allow you to go through the card deck until you win or have no more moves. But when solitaire made the move from cards to the computer (i.e., when it was made digital), we got an opportunity to think about the game differently. What if the goal is not to get through the deck before you hit a brick wall, but to get through every time even if you have to backtrack?
The digital version of the game has something the card-based version does not — an undo button. So rather than play the game to see IF you can win (i.e., can you get to the 43%?), you can play the game to see HOW you can win (i.e., can you get to the 80%?) You may say that this is breaking the rules, but please remember, we’re just talking solitaire. The only person you are playing against is yourself! And if you decide that the more interesting game is to measure yourself against the 80% standard than the 43% standard. Then you should use the undo button. It is your choice.
In the game against yourself, you get to both set and enforce the rules.
Digital Transformation Rules
It’s easy to adopt any rules you want when you play a single-player game. But most people don’t live their lives this way. Here’s the thing…to be successful at Digital Transformation, you need to think more about changing the rules than you do about following them. I’ve talked before about the differences between digitization and Digital Transformation.
Digitization is using technology to as effectively as possible optimize your processes.
Digital Transformation is examining your goals/your customers’ goals and finding technology-based ways to do your business more effectively even if it changes how you do your business
Reread the definitions above. This time, think about how that applies to the rules that you have for your business. There are all sorts of “rules” that we thought were inviolate until they weren’t, such as:
People need to touch an item before feeling comfortable buying it (Sears, Amazon)
Only hotels can efficiently rent rooms by the night (Airbnb)
Books have paper pages (Kindle, Nook)
You need to own a car to drive one (Avis, Hertz, Zipcar)
Movies are for theaters (HBO, Blockbuster, Netflix)
Doctors have to see you to treat you (telemedicine)
One thing I love about this list is that it’s clear that there is not a limit to the number of times that we can re-disrupt a rule. In fact, for the movie example, we could go back further and start with the rule that a performance required performers and in-person attendance in a theater setting:
Which is disrupted by movies (can watch the same performance repeatedly)
Which is disrupted by movies on broadcast (can watch at home, but with minimal availability)
That is disrupted by movies on cable (more availability)
That is then disrupted by VCR/DVD movie rentals at the store (much more choice)
Which is then disrupted by VCR/DVD movie rentals in the mail (more convenient)
And finally (for now) by streaming (maximizing availability and convenience)
We see these examples of Digital Transformation around us all the time. Of course these examples and their transformation potential is far easier to see with hindsight. And the technology seems much less intimidating with hindsight.
It’s very easy to assume that because we do something in a particular manner, that it is the only or best way to do it. Digital Transformation is about figuring out what that next disruption is. Because technology (whether emerging or something decades old) can help us do things in ways that are different—and hopefully better.
The key to success is distinguishing between which rules are inviolate rules (e.g., people need a reason to buy what you are selling) and which are temporary rules (e.g., award-winning books are only published through top publishing houses). And the funny thing is that the technical folks are not usually the best at distinguishing between these rules. Because often they don’t understand customers or their needs.
Summary
Digital Transformation success comes by identifying the “false rules” that limit your ability to deliver a better offering. To figure out how to change the rules, you need to have a great understanding of your customer’s needs. You also need to understand what a technology does (which is easier than it may seem). You do not need to understand how a technology works or how to deploy it.
Don’t consider whether Digital Transformation applies to you. It absolutely does. Your company needs to Digitally Transform. All companies do. That transformation is the only thing that will keep you in business for the long term. The question is whether you are up for the challenge of figuring out which rules to break. Or whether you’re going to ignore it and assume that upgrading your technology infrastructure will be enough to retain your customers.