This Transformation Feels Different. Disruptively So.


Digital Transformation is here. Consider this:

Travelocity changed how we purchase a hotel room. AirBnB is changing the very definition of a hotel room altogether. Taxi Medallions have been great investments. Until now, that is.  Uber is changing the very definition of a cab. Starbucks now deprives your bank of float altogether with its loyalty card that hangs on your money until you buy a drink. Chinese Internet commerce conglomerate Alibaba is now pointing its 230 million active users at its newly minted Mutual Fund business.

And whilst this is speculation, who is to say that Apple can’t re-invent banking? With a captive mindshare of spenders using its smartphones and tablets and a war chest of hard cash twice the size of that of the US Government, the pieces are all here.

Every one of the above examples is real or plausible, is here, is digitally driven and is fundamentally disruptive.

As individuals we can’t often appreciate the disruption we’re driving everyday. To us it’s just a single taxi ride, a good nights sleep, a skinny latte. But for enterprises at the receiving end of our patronage, entire industries are being re-formatted every time we pull out our smartphone.

It’s different this time.  

We’ve seen potential disruption rear its head before.

The dot com era was one. In 1999 as a young consultant at a leading strategy consulting firm, I remember sitting across the table from the CEO of a US beverage distributor who was literally shaking in his boots thinking of how he could get ‘Amazon-d”. It looked pretty serious then but looking back now, the worry wasn’t about business model and product disruption. People were still going to be buying lots and lots of booze. It was about commercial and operational disruption, and channel disintermediation. The question then for established businesses was how to thwart competition from brick-less and mortar-less companies that had more efficient distribution routes and operational models with new electronic data exchange across the demand and supply chain.

For the most part, the industry parameters and the concept of the product remained the same.  The commercial and operational model for both internet-first and brick and mortal businesses have now been adjusted for the internet era. That beverage distributor still stands strong today. As does the excellent 23-year old Evan Williams Kentucky Straight Bourbon (no, not the one from Silicon Valley), they sell. This is true of hundreds of other offline retailers and their products as well.

Then came Social Business and Social Enterprise – the next revolution born from emulating Facebook in the enterprise that promised the death of management hierarchies and of business process. A single connected, bottoms up ecosystem of employees, customers and partners`. Not much to say here. Definitely value and mature pathways in pockets but mostly sizzle and no steak. I’ve said my piece on this topic a few times, here. So have others.


Now we embark on digital transformation

The last 50 years have been about digitization. The period of transformation now commences. Transformation is something that is on minds of CEO’s minds right now. Unlike the proposed threat from not adopting or considering social business, the examples this time are real, they’re data driven and easily understood by global leaders. A vigilant CEO/CMO/CIO can instinctively look at the above examples as proxies and size up what this could mean for her industry. I’m fortunate to spend time with many of them every week given my line of work, and I can tell you that they absolutely are thinking about what this means for their industry and their business. And yes, their own competencies.

Even the skeptic in you who believes that large organizations don’t like to change or won’t get Uber-ed will agree that you are contributing to at least one of those examples of disruption mentioned above. These disruptive models are centered squarely around you as the consumer. And disruption is achieved by creating and leveraging data about your stated and inferred preferences, and how you truly want to procure and consume not a product or a service but an experience, and at a palatable cost.

And what of technology?

This is a separate topic in and of itself but lets touch on a framework at a very high level because from my dealings, the technology ramifications is on everyone’s mind.

Lets establish the baseline, first:  The drawing board for all of these newly created disruptors isn’t a better retail store or a cheaper factory. The drawing board for these mentioned disruptors comprises of data in an excel sheet and a code editor.  This is the new battleground that the digitally savvy C-Suite is quickly becoming aware of.

So, rushing to pick packaged software or to hire a Chief Digital Officer or guessing what will be the killer app of the future isn’t really the first call to action. Every single one of these disruptors has the luxury of ring-fencing your customer and rethinking the product entirely, without the baggage of your current demand and supply chain.

The C-Suite of leading incumbent companies should be looking for four accelerators from technology:

1. Experience: This is not about software features or transactional vs. social technologies. The question is: How can I assemble the right people, data, process and content around each discrete task, to drive customer, employee and partner performance.

2. Agility: No point guessing technology needs over 2-3-4 years. The target is a moving one. Can my technology and vendor choices help me respond to a shifting goal post?

3. Industry Differentiation: In the face of emerging one-size-fits all cloud, how do I still differentiate and have an edge?

4. Network Effect: The network is more valuable than software features. What networks do I need to create or be a part of?

There are some very intelligent folks specifically focused on digital transformation: Analysts and thought leaders including Lee Bryant, Paul Greenberg, Dion Hinchcliffe, T.J Keitt, Peter Kim, Esteban Kolsky, Chris Morace, R Wang, and consultants including Deloitte’s John Hagel III and McKinsey and Co.’s Paul Willmott. I know there are others and I’ve most definitely missed some but these have publicly shown involvement. Fire away in the comments with other names if you like.

I can guarantee you that the assessment and approach across us is not consistent and will often be contradictory. But that’s ok. Because once it’s perfect, consistent and well understood, it’s likely at the maturity stage where only those who want to be reactive will be paying attention. Now, however, is the time for those who want to deliberately drive transformation and where warranted, drive industry disruption.

That point about Internet retailer Alibaba entering the Mutual Fund business? That was a bit of an undersell. At $80 Billion now under management, Alibaba has leveraged its war chest of customer data and mindshare to emerge as the second largest mutual fund provider in all of China.

This transformation feels is different. Disruptively so.


Update: The risk of naming names is that you inadvertently leave out really good ones. Added some.

I cross posted this. See comments on LinkedIn and Medium.


Subscribe to this Blog via Email

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

1 Comment
Post Details

Dear Sameer, if you could pick out one example of an established enterprise who was very successful in its transformation, which one would you pick and why?

Leave a Reply

Your email address will not be published. Required fields are marked *


Get every new post on this blog delivered to your Inbox.

Join other followers: