How would the Beatles Tackle Digital Business?
How do you build a digital business?
You may discover many different paths to success on your journey to digital…and even more opportunities to take a wrong turn along the way.
We can learn about these wrong turns from the Beatles. Yes…those Beatles: John, Paul, George, and Ringo.
What’s a Digital Business?
As we travel on the path to digital business, our collective progress is at times exhilarating, at other times disappointing, and at all times inevitable. A Gartner study from two years ago found more than a fifth of the enterprise respondents already defined themselves as being a digital business: one focused on a world where people, businesses, and things communicate, interact, and even negotiate with one another.
Customer behavior is certainly guiding businesses along the digital journey. A large segment of the Gartner study defined themselves as a digital marketing business, a stage in the transformation to digital that leverages social, mobile, cloud, and information to build intimate relationships with customers.
AI, Robotics, and the Internet of Things are also driving digital business, and more importantly, digital business returns. Consumer impacts will be felt across multiple industries…From bank tellers to call center operators gradually being replaced by question-answering, automated systems….to refrigerators that alert what needs replenishing and when…to grocery shelves that leverage their connected digital supply chain to drive demand response back through to supplier distribution centers and logistics providers. Cars will drive themselves and notify insurance firms and garage services when they break down, negotiate claims, and arrange payment and repair.
While we consider just how distant or near a future all this might be, there are common mistakes to avoid on the path to digital business.
Here are three of the biggest digital transformation mistakes, inspired by some classic Beatles songs:
Mistake #1: Digital Business as a New Kind of Psychedelic Experience
According to Gartner, “Digital business is the creation of new business designs by blurring the digital and physical worlds.” Some might say the best way to achieve this blurring is through psychedelic experience; just listen to the Beatles Lucy in the Sky with Diamonds to be transported to a world of “tangerine trees and marmalade skies.”
Of course, as business people we need to be careful that the bright shiny object of “digital” does not blind us on our path forward. Digital innovation and creativity need to stay grounded in and aligned with the strategic direction of the business, with clear context to the parent industry.
As McKinsey’s “Finding your Digital Sweet Spot” explains, “To capture the value available, organizations will need to assess the value at stake, invest proportionally to that value, and align their business and operating models accordingly.”
Not all industries face the same opportunities or the same threats. Industries in the “eye of the digital storm,” like retail banking, property and casualty insurance, and mobile telecommunications, offer virtual rather than physical products and focus on processing and servicing. These need to have a strategy for digital that includes Omni-channel distribution.
On the other hand, industry sectors like grocery retail and apparel need a different strategy. For them, digital sales may realize only a 20 percent average bottom-line impact over the next five years. A significant opportunity, but much less than the potential bottom-line impact from digital driven cost reductions, which could average 36 percent.
So as business moves on its digital path, those who forget the basics of good market analysis and business strategy will do so at their own peril.
Just look back to the dot.com days, when Webvan went from being a $1.2 Billion company with 4,500 employees to being liquidated in under two years. Now startup Foodoro is seeing success with food crafted by artisan producers, a targeted market aligned with their digital business strategy. Hmmm, I need to look to see if they are selling “tangerine trees and marmalade skies.”
Mistake #2: To Find the Right Path You Must Look Within
The great George Harrison wrote a song called The Inner Light based on a passage from Tao Te Ching “Without going out of my door I can know all things on earth.” This truly inspirational advice might work well for the path to enlightenment. For the path to digital business, you need to get outside your business. If you look to your partners and your customers, and keep your industry structure and dynamics in mind, the results can be extraordinary.
This dynamic is showing itself in Financial Services where new FinTech entrants are employing digital business models to disrupt traditional banks. Point approaches or applications fall short as a means to counter this insurgency. What is needed is a digital omni-channel approach integrated with digital marketing, client on-boarding and servicing.
As important as it is to take an external view on your digital transformation journey, it is also important to look within to ensure you have the competencies in place to execute on your holistic digital business vision. Perhaps George had it right all along.
Mistake #3: Digital business is all about process. Digital business is all about content.
There is a constant and natural tension between those who favor process and those who favor content as THE best path for digitizing business in a meaningful way. Here again, we can learn much from the Beatles song book. Come Together is the lead song on the Abbey Road album that saw the last recording sessions for the Beatles. Ironically, the clash between Lennon and McCartney would ultimately lead to the end of the Beatles soon after. If John vs. Paul gives us any lesson, then it is perhaps that it is time for process and content to come together to best move the digital business forward.
Digital business advances are increasingly being used by companies to differentiate and gain advantage over the competition. If you’re in the Insurance industry, that might mean a focus on better approaches to managing customers through multiple channels – brokers, agents, online and more. In Banking, efficient customer on-boarding, new account opening and servicing are considered critical to success. And, in healthcare, care orchestration can be the singular difference.
All of these require an integrated content and process strategy with technology that comes together to support that approach.
The Long and Winding Road
As in so many disruptive situations, there is no single straight path to success. To build a digital roadmap for your business, you’ll need to ask where the value is to your enterprise in operating as a digital business. To identify and pursue the value you will need to align to your strategic business initiatives, look to the external forces impacting your vertical industry, and consider the full breadth of digital technologies and methodologies available to you.
While you are doing all that it couldn’t hurt to listen to more Beatles for inspiration.
A version of this post first appeared in CMSWire.