How to survive a digital tsunami without turning your business into a new Google?
The digital “disruption” doesn't mean you need to radically transform your business. Becoming another Google, Amazon or Facebook is not your only option.
The digital “disruption” doesn't mean you need to radically transform your business. Becoming another Google, Amazon or Facebook is not your only option. You can survive the digital storm without giving up the traditional values that have been with your company since its creation. However, you need to be able to communicate such values to the customers whose consumer experience is increasingly tied to digital culture.
I will never forget meeting the founder of a footwear manufacturer who shared his thoughts with me a few years ago. He said, “Call me old-fashioned but I still believe that the key to footwear is for the foot that slips into a shoe I’ve made to feel as comfortable as possible. This is what my father has taught me. But I’m not blind and I realize that the world is changing. Today’s customers click through dozens of websites in search of shoes. The daughter of a friend of mine does that before she buys ordinary flip flops in an online store in Brazil. Customers like her won’t buy my shoes for their reputation for comfort alone. They want instant gratification and pleasure even before they don the shoes. They want to see the shoe they are buying from all sides and chat about future models and discounts with online customer support. They want to receive a nice newsletter with links that will quickly transport them to my site. And above all, they want the delivery to be fast and the return process painless. Only after I’ve guaranteed this all can I ever count on someone to notice me and believe that my shoes are indeed comfortable. Should I be offended?”
The thoughtlessness of legendary corporations
Having learned his lesson well, my friend was way ahead of many eminent companies which still need to do their homework. One such late learner that springs to mind may be cliché, known to all of the world’s executives. That company is Kodak, once a top player whose position on the photographic accessory market seemed unassailable and which appeared to have no reason to worry about its bright future. Enter the age of digital photography. While the fans of classic single-lens-reflex-film cameras hastened to pick holes in digital cameras and photographs, a completely new type of customer entered the scene. Equipped with permanent mobile connections, they could instantly share their pictures with their loved ones as email attachments. All they needed was the ability to view the photos and migrate them to a computer as soon as possible, skipping a trip to the photo lab. Within a few years, the technology completely transformed customer expectations. They would readily trade the romanticism of the darkroom for speed, their ability to edit digital images and having no financial or technical constraints to stop them from duplicating images. Kodak management refused to acknowledge any of this. Nokia is a similar story. By clinging to its well-known philosophy of “connecting people”, it steadfastly denied that people no longer looked to connect with others by means of their voice and a handset. Instead, people sought to stay in touch by texting and sharing photos, sound and videos. Most of all, they wanted to stay online at all times. The smartphone gave them a diverse communication experience that no traditional telephone could support. Not even the iconic device known for the ease of system navigation.
Never lose sight of your values
Many companies have either refused to grasp or found themselves unable to grasp the new rules of digital technology. Some simply failed to appreciate just how powerful they were. Many businesses paid dearly for this failure. Why mention it now? Is there relevance in these tough lessons of the past for today’s executives? In the face of unrelenting digitization, should you turn your company into another Google, Uber or Amazon? Should everyone rush to offer digital products, invent new applications, and digitize every nook and cranny of their business lest the competition might wipe it out? Absolutely not. On the contrary, success still depends on how true a company can be to its core values rather than whether or not it has migrated all of its data to the cloud. Paradoxically, in times of digital transformation, the companies most certain to survive are those that are most clear about why they were created and about the core values that they strive to share with their customers. Digital tools are just that: tools that help you do business. The essence of that business is not about which tools you use but about offering values to those who are willing to pay for them. Above all, don’t lose sight of what is most essential: changing customer expectations, reactions and views. The customer is at the heart of the digital disruption unfolding before our eyes.
The mighty lessons of uberization
You may abhor Uber’s image and disapprove of its management methods. You may even represent the cab drivers who refuse to accept losing their market position. But there is one critical process you can’t afford to overlook: the advent of Uber is a classic case of digital disruption that has ultimately created a whole new quality. Uber showed everyone what an application can do and how to use it to transform a business. Today – for customer convenience – regular cab companies no longer shy away from apps. They know fully well that customers like modern payment methods and a convenient way to order a service. If you run a cab company, you don’t have to abandon your principles. As long as you understand Uber’s lessons about the preferences of today’s customers.
Do not give up your comfortable beds
If you think that the main purpose of digital technologies is to cut costs and accelerate business processes, you are a high failure risk. And fail you will if all you think about is your new organization culture. Rather than digitizing every aspect of your business or pretending you belong to the tech elite, focus on the customer. Assess customer immersion in the digital world. A successful digital transformation need not embrace it all. What it must do is propose digital values to the customer. The customer ultimately decides how profound your company’s digital overhaul should be. The customer’s digital leanings also determine what you need to learn about IT to successfully run your business. A hotel chain whose brand goes back a half a century has no need to suddenly become another Airbnb. It can carry on as usual, guided by its old values and keep convincing the world it has the most comfortable beds on the continent. And yet, it should also take stock of its digital communication tools, hotel booking systems, and advance payments. It needs to offer a photographic glance of all room types, set up loyalty building mechanisms, and ensure constant communication via text and e-mail to ensure customer convenience and, above, brand loyalty.
All these observations may reveal one simple truth that the business world has been aware of for years: be yourself and remember that the customer comes first. However, if there are still CEOs out there who believe that the digital revolution and the good old’ principles are mutually exclusive, in my personal opinion, they subscribe to the kind of anachronistic sentimentality that will inevitably do in their business. However, if your effort to protect your company’s traditional values is in lockstep with your awareness of the changing world and of how such changes are affecting the customer, you are setting yourself up for success. No matter whether you sell food products or run a hotel or a logistics company.
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The New York Times on Tech, Shira Ovide, Amazon and Google’s True Advantage. These companies have mastered spending big to stay Big Tech, Link, 2020.
Science Direct, AndreaGeissinger, Technological Forecasting and Social Change Digital Disruption beyond Uber and Airbnb—Tracking the long tail of the sharing economy, Link, 2020.
Google Scholar, Erik Brynjolfsson, The second machine age: Work, progress, and prosperity in a time of brilliant technologies, Link, 2020.
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I have been watching technologies change for years. I believe that the next wave of development is going to be driven by such technologies and trends as Virtual and Augmented Reality, Internet of Things, Robotics and Automation ana AI.