The concept of Digital is of great interest to academicians, leaders and organizations world over. In our conversations with clients, digital pioneers, and industry stalwarts, however, we have come to understand that there is a lot of confusion around the concept itself. Therefore, while the world tries to comprehend what Digital truly is, it is important to also understand what Digital isn’t. By the time you finish reading this piece, we hope to have busted 6 common myths and misconceptions about Digital.
Myth #1: Improving technology is Digital Transformation
Despite incorporating new technologies to their business, many organizations have still not been able to thrive in the Digital Age. As a result, since the year 2000 alone, over 52% of Fortune 500 companies have disappeared. The business models of these organizations were too outdated for them to survive in the Digital Age.
While Technology is the pivoting point into the Digital Age, it is the data that these technologies give us, the effective use of which dictates our preparedness in the Digital Age. The scale at which data is available to organizations has resulted in data being interactive - analyzing trends, developing patterns, and creating predictions. For organizations to truly claim themselves as ‘Digital Masters’, it is important for them to use this analysis to redefine business models, scale leaders at all levels within the organization, and become agile, to cope with demands of consumers, stakeholders, and partners.
Myth #2: Digital affects only IT or B2C companies
While most people believe that digital is here for IT or B2C companies, research proves otherwise. Digital is disrupting all industries. It is said that Digital is doing to Banking, Insurance, and Accountancy what social media did to telecommunication and the media.
Even major innovators, such as Netflix and Amazon are finding themselves competing with other industries to develop a large market base. Netflix CEO, Reed Hastings said, “Really we compete with everything you do to relax. We compete with video games. We compete with drinking a bottle of wine. That’s a particularly tough one! We compete with other video networks. Playing board games”, showcasing how digital is truly disrupting all industries, and challenging organizations to compete outside of their traditional industries, to win in the Digital Age.
Myth #3: Digital Transformation starts with customer experience
The core of any business is to cater to the needs of the customer. In the Digital Age, however, customer interaction with businesses is starkly different. Today, consumers also behave as co-creators for many innovations; Also, the ways in which consumers engage with products and services has the potential to disrupt businesses. For instance, AirBnB - a technology platform driven almost entirely by consumers (renters and landlords) has significantly disrupted travel, hospitality, and even employment models.
Therefore, organizations must be willing to radically alter their culture, operations and technological practices. In other words, effective customer experience in the Digital Age is a happy byproduct of Digital Transformation, not the starting point.
Myth #4: Digital is about reducing the workforce
It is true that digital platforms are eradicating the need for human beings to perform many of the mundane and routine tasks. However, the Digital Age is creating the need for several roles that have never existed before. For one, innovative organizations have begun to instate the role of a Chief Digital Officer, to help with Digital Transformation.
The Digital Age is also seeing full-time employment giving way to networks of project-based employment, allowing professionals and organizations to create stronger value from employing the best talent and resources for a project. This is a change that is slated to scale, as employees and leaders alike are investing in developing digital capabilities.
Myth #5: Digital Transformation is an IT function
With Digital Transformation being a key challenge for most organizations (who feel its disruption), the common question asked is ‘Who should lead Digital?’ For nearly a decade, Digital Transformation has been understood as adopting the latest in technology. As a result, it is seen as an IT function.
We know now that technology is only a part that facilitates Digital Transformation, and that changes need to be made on all fronts. Therefore, while new business units and roles are being instated to lead this transformation, as with all major decisions and changes, many business leaders and theorists agree that it is the senior leadership, starting with the Chief Executive Officer who should be leading this change. Having a Chief Digital Officer to champion this transformational change is a key idea that some have implemented, but many are still toying with.
Myth #6: Digital Transformation means different things for different industries and organizations
Once we have established that Digital Transformation needs a change in mindset and capabilities to obtain, and that it is a Leadership function, we must then look at what makes a Leader in the Digital Age. In doing so, it becomes evident that Leaders in the Digital Age have a common DNA, irrespective of the organization or industry they operate in.
With the changes that Digital Disruption is bringing in, if an organization must thrive, it is important that leaders:
- Have an exponential mindset to look within the industry, and outside, for disruptions, partnerships, and markets to operate in. This requires leaders in the Digital Age to be strongly networked leaders, or at least build the capabilities to do so
- Be able to make sense of the large volumes of data and the speed at which the data is obtained, and use intuition to develop insights based on the available data
- Be able to break through the limitations of the existing business model, processes, products, and markets and look at where to head next.
- Be comfortable with certainty as well as uncertainty, be agile, and open to an iterative process
In short, the lines between what we have known to be sacrosanct are blurring away, and businesses are being disrupted faster than leaders can comprehend what is happening. While the world has come to a consensus that Digital Transformation is necessary and inevitable, research from MIT Sloan and Capgemini states that “whole 90% of CEOs in the world believe that the Digital Economy will impact their industry, less than 15% are executing on a digital strategy”. Not getting on the bandwagon of Digital Transformation, in its truest sense, will present dire consequences for organizations.
Tell us your Digital Transformation story, if you have one. If not, let KNOLSKAPE help you with yours. Click here to know the work we’ve been doing with our clients on their Digital Transformation journey, and reach out to us at email@example.com.