The Digital Transformation: Only the Paranoid Survive
In this first of two blog posts I would like to discuss the book The Digital Transformation Playbook by David L. Rogers. The book is aimed mostly at (C-level) managers working at a company that needs to go through a digital transformation or is already undergoing it. Still, the book provides sufficient insights for developers and designers as well.
The Digital Transformation Playbook often reads as an anthropological study of companies’ behaviours in the current digital age. This is not surprising, as Rogers (a faculty director of Columbia Business School) has been out into the field, consulting for companies such as Google, Toyota, Visa and GE on digital strategy. He has seen companies struggling with and responding to new technological opportunities this digital age has brought forth so far, and Rogers has collected these learnings and successful strategies in his book.
Digital transformation is actually not about technology itself but about strategies on how to respond to technological developments. Reading The Playbook helps to understand the current behaviours of digital companies better, the strategies they pursue and why.
These digital developments affect five domains of strategy:
Customer networks. Customers are not a mass market any more but are active in a dynamic network and are often the key influencer (and not the company) due to social media and networks;
Competition and platforms. Competition can come from anywhere as distinctions between industries become more fuzzy. The distinctions between partners and rivals also blur, with competitors working together in some areas and competing in others. Platforms bring different types of users easily and with low costs together, and contribute and receive different kinds of value;
Data as assets. Data is key in value creation. It can be gathered easily and cheap, and when interlinked and made usable with analytical tools, is provides key business insights;
Innovation by rapid experimentation. Moving away from shipping finalised products, and applying more testing and validation already during product development. Releasing minimum viable products, and iterating using user feedback;
Adapting value propositions. Sticking to your value proposition is dangerous, a new competitor can come out of nowhere. The value proposition should be defined by the changing customer needs, so a company should always look for new opportunities and adapt.
There are two take-aways that are repeated by Rogers throughout the book. The first one is to keep moving, improving, evolving. A company that does not respond to new digital technologies and the impact of it on its industry, will likely be overrun by a company that does. Like Andy Grove said, “only the paranoid survive” in this digital age.
The second one is the realisation by Rogers that how ever urgent the transformation may be or how willing you are as an employee to pursue this, in the end it comes down to the willingness of the company’s board and culture to change. If these are limiting change, than those could be the biggest obstacles for a successful digital transformation. It is a pity that Rogers does not provide any advice here but that’s probably a topic worth a book on its own.
With technological developments and innovations raging on, resulting in new digital possibilities and solutions, and shaping behaviour of consumers and companies in new ways, one can argue that this book will transform from a business strategy into a history book sooner than later. It is an observing book that does not provide universal truths, but truths with a best before date. This is not meant as a critique, however, as the book finds its strength especially in being observant, enlightening the reader in how the current business world is digitalising and transforming. Enlightening even those already active in this domain, like us as developers and designers.
In a couple of weeks I’ll dive deeper into those learnings, and discuss how we as developers and designers can apply that in our daily work.