In yesterdays post, I mentioned a book by Westerman G, Bonnet D, McAfee A. (2014) “Leading Digital – Turning technology into business transformation”. Even if it is a couple of years old now, it is a really good book on digital transformation, what you can do, and how, to transform your business.
The authors had during several years studied more than 400 large companies (the Silicon Valley companies or tech start-ups that do digital technology for a living are not included) from different industries and countries to investigate how they implemented digital technology and how they succeeded investing in it. Based on the results of the study, the authors divided the companies into four categories; Beginners, Fashionistas, Conservatives and Digital Masters.
The study shows that the digital masters have 26% higher profits than the average in each industry and that they turn over 9% more than others with their existing physical assets.
The digital masters have completed a successful digitalization and they excel in two areas; Digital ability, (“WHAT” in digital transformation), and leadership (which is “HOW”) which includes creating a goal vision and drive for the change required to move towards the vision.
So, the digital ability what is that? Digital capability includes three areas for digital development; customer experience, operational effectiveness and business models.
The advice regarding customer experience is to put it at the center of the digital transformation journey, to design the customer experience from the outside in. Make sure the digital and physical customer experience is seamless for the customer.
Good operational processes require a stable digital platform to rely on for further digitalization. Companies with better operational processes have higher productivity and efficiency and it is also a prerequisite for a better digital customer experience.
The company’s top team should continuously challenge the company’s business model and the company should monitor symptoms that show if the business models in the company’s industry are changing. You should consider how your company can change the industry you operate in before anyone else does.
The authors want to show that it is not impossible for a company to become a digital master. Becoming a digital master requires a certain level of human capital and investment, but first and foremost it requires time, grit and leadership. Simple as that 🙂