Why do you need to embrace Digital Transformation?
Think of a river - a river that is flowing steadily. You are standing on its shore. You have come here to compete at an annual raft racing competition. You and your friends compete here every year. And over time you have actually become very good at it. In fact, last time you were the winners. That is very important, since, as per the rules of this competition, as a winner the previous year you have an advantage in that you will be starting ahead the others. That is a significant advantage in any race. The location of the race is kept a secret and before starting you do not have any idea how the river behaves like as you go downstream towards your finish line.
All previous races that you attended before were held in parts of rivers where it was flat and steady. So, you expect the same for this race as well. The good thing is that you are an expert in racing in steady waters. Now, as the race begins, you are obviously pacing ahead of the others. You have got an advantage of being able to start ahead of the others, plus your skills are most suitable for racing in a steady stream. Soon after, the river starts to turn – towards right, then left and then right again. And after one specific corner, to your horror, you see that the river is entering a rapid.
From this point, everything happens very fast. As your boat starts to enter the rapids, it starts to move around. You were obviously not prepared for this. As you try to think fast, you figure that you have two choices at this point – either continue to operate the way you have always been and ignore the fact the the rapid is going to impact your performance and chance to win; or, accept that this is a new world now and you need to change the way you operate. Option one is easy – you don’t have to change anything. However, if you let your boat go and allow the rapids to control it, who knows where it will end up. Eventually it may hit a rock or a tree trunk and either get overturned or get blocked from the flow and you will lose valuable time. Either way you will lose the race because other players who were far behind you in the steady stream are catching up to you very fast. If you need to win, you need to start taking control of your raft, and start to maneuver it in ways very different than the way you would do it in steady-flowing water. That is option two.
The world has reached a similar rapid in its flow of progress of the human civilization. Since the industrial revolution, business has been flowing in relatively steady waters. Yes, there were ups and downs and curves and turns along the way (new industries, new technologies and recessions and depressions), but nothing really rocked the boat. However, now we’re entering a very different stage of the flow – thanks to the wide availability and mass adoption of digital technologies. What was once a relatively steady flow has now become constantly changing and chaotic environment. First of all it has become extremely easy for anyone to start a business and try out various disruptive ideas in the market. There is appetite for change and funding to support. Additionally, Digital technology has allowed to crush a number of barriers to entry for the new players. And then these players are also leaner and operate way more efficiently as compared to traditional organizations. This allows for a number of different business models to become viable and also a lot of value for the end customer. And then finally, customer perspective is also changing – a new generation of customers are entering the marketplace and are starting to take over the customer base. These new customers are accustomed to a very new value system. All of these are good things – end of the day they allow for more value to be delivered to the end customer and bring about a competition that allows for survival of only the fittest. But what that means for you as a business owner, manager or contributor is that you need to make sure that your business is as fit as possible, at least if you have a desire to survive. However, if your boat has not reached the rapids as yet, you may not feel it that way. You may not be exposed to the heat of disruption as yet. But be sure that it will – you will reach the rapids for sure – it’s not a matter of if, it is a matter of when. If history is a precedent, look at Kodak, Nokia, Blockbuster, Blackberry, Barnes and Noble and see what you can learn. Because when it happens it could be as fast as taking a curve along a corner of a steady flowing stream. So, you better be ready.