Alchemy

Today at the zoom-sent class, we talked about how different companies collect ideas, analyze them and possibly adopt an idea to make a project out of it. That is an interesting topic. I have been working at smaller companies for many years, and dropping an idea at a smaller company is often nothing formal. But over the years, the realization that that is not always an advantage has hit me. The person receiving the idea has to be interested enough to take the time to listen, have an attentionspan to go with it and have the capability to understand the suggestion and its implications. This has become even more hard with digitalization in my opinion.

The digitalization of society and companies has lead to a, in many cases, more complex reality. Data has become part of the value between customers and a supplier, it is said to be the “new gold” after all. Data is the basis for new product ideas which is one of the reasons it has become increasingly important to keep safe.

The “smarter” a product becomes, integrating sensors and monitoring etc, the more likely it is for a company to not be able pull of the making of new product by itself. The need for partnerships arises. Security also becomes important, both internally in companies and between companies when they open up for partnerships. So security of data is one challenge when it comes to digital business development.

Another of the challenges is a lack of skills or capability. More IT-trained people, more interdisciplinary skills are needed to connect companies and technologies. Of course, knowledge in digital business development is needed to know how to compete in a market today with the digital possibilities and what pitfalls there are.

These challenges makes it harder to pitch an idea to a company. The person pitching the idea, no matter size of the company or the method of doing it, has to be able to truly depict the idea to the receiver in order to be properly understood. And the receiver/receivers has to have a complex and broad understanding of it business as well as digital possibilities and be willing to “fill in the gaps” in a positive way if the idea is merely a frame.

I think that when it comes to the possibilities of digital transformation, we have only begun to scratch the surface when it comes to reinventing or thinking completely differently in order to be able to deliver new products or services. There are enormous opportunities still out there. Keep panning for gold!

Turning Technology into Business

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.

Fyra nivåer av digitalt mästarskap.

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 🙂