Kevin Kelly has written many good books and said many wise things with regards to digitalization, technology and constant change. Often very technology focused and visionary but always touching on culture. After all, he is somewhat of a futurologist. With his last book The Inevitable: Understanding the 12 Technological Forces That Will Shape Our Future (which I haven’t read, only pod-heard about and from) he goes into how great leaders ask really good questions. Although it’s in relation to AI and super powers that help provide answers, it’s relevant far beyond that. It really resonates well with me.
Given how digital transformation (but come on, it’s business transformation), as the figure above, from McKinsey Quarterly shows, has shifted from the more technical and concrete concepts and focus areas, to a much more abstract one – namely culture – so must our questions. Question is: have they?
Have you asked who (or what focus) needs to be onboard besides the, so far, frequent and apparently obvious head of digital, chief technical officer, innovation officer, digital director, chief data strategist, data guru, chief head of atomic big data machine learning robot executive master etc and so on?
Have you as someone responsible for transformation work, leader or in other capacities, developed the powerful questions behind the questions? Have you developed or stumbled upon ways of understanding and approaching the problem behind the problem (and opportunity within the opportunity)?
This is the second part of a few, deconstructing and highlighting some important aspects of the concept of digital strategy and what to consider when approaching it. You’ll find part 1 here.
Part 1 was much about the power of words and definitions, and the need to actively reflect on this with the group responsible for thinking “digital strategy”. It also highlighted the power of using a networked perspective for understanding the integration, organisation wide implications as well as stakeholder alignment.
In this second part I’d like to touch on how brand culture and purpose matters greatly, and how reframing this, and ones market, creates a vantage point that fuels the thinking. I use two fairly well known examples to do this.
Ford manufactures cars, but a while back they redefined themselves as a mobility brand (actually, the original mission was to make America mobile, so not that drastic change…). What does that do? Obviously that depends. But there’s a number of things that fit very nicely together in business strategy, but I’d like to include it in digital strategy as we define that as broadly as strategic thinking in a digital (networked) world.
The mobility brand Ford saw the number of 16 year olds who get their first car drop considerably. More numbers are showing the same changes in demand. But if you’re not in the business of selling cars, but rather mobility, there’s another side to that.
Ford partnered with Zipcar which offers a subscription based model for access to mobility, in the form of cars. This could have been done without Zipcar. It is now done in different shapes and forms by many car manufacturers (I recently saw that Audi pushes micro-sharing experience, collective access to Audi cars)
Zipcar bought by Avis, but what if Ford bought it? Making money from providing mobility services in Volvos, BMWs etc? Competitors become collaborators. The revenue model drastically different. Not switching, complementing. All facilitated by new, networked, technology. But, more importantly: new self perception on behalf of the brand. The organisation, and how everyone sees value creation.
Product development vs business development. A networked perspective can dramatically fuel the thinking in business development. Looking at the brand, its purpose and meaning in peoples lives, is an important part of digital strategy. It might make it inseparable from business strategy, that’s fine. That’s actually just right. And here’s also where it becomes something bigger than a digital thing. That’s important, because when it’s a business matter, and even a cultural matter, you (still) have a better shot at getting more people excited and onboard.
The vast majority still don’t feel ”digitally savvy” and hence exclude themselves from ”digital” projects. Many are literally scared of it. But cultural transformation, processes, thinking about markets and business – there’s where you might find those people.
I’ve jotted down some thinking on meaning markets before. In the case with Uber, on slide 6, they think of themselves in a number of ways appart from ”taxi company”. One is as a logistics platform. What makes sense when you’re a logistics platform? Partnership with destinations. An open API. Revenue sharing between company and private drivers carrying out the transportation. All of the things that any taxi company could have done, but didn’t. Because their culture, self-perception and view on value creation, doesn’t allow for it. That’s right, it doesn’t allow for it. That’s how strong impact culture has on ideas. It’s back to definitions in a sense.
Always include, and even describe, your digital project/initiative as a (organizational) cultural one. You benefit from appealing to people who dislikes and even fear digital.
Rethink your market. Do the product vs. meaning exercise. What is your product? What is the meaning of you, and that product/service, in peoples’ lives? Then think about what your market really is. I’ve heard Unilever is very much in ”home care”, aiming to ”free up family time”. So how about a global platform for subscription based home-cleaning, laundry service, laundry pickup etc?
See also a method called Jobs To Be Done. This is not equating an initiative around digital strategy with innovation, but it is highlighting the perfect occasion for truly taking a stab at preemptively exploring ”how the business might change”.
OK. So two posts in and still no focus on media channels, social platforms and communication. I don’t think the next one will be either.
My work is never dull. I frequently get involved in workshops and discussions with stakeholders from different industries, all battling the same core challenge. That of change and transformation. Recently I got a taste of private banking. I’m not going to share any of that, but it struck me how true much of this Business Transformation Report, from Tieto (a leading Nordic IT Service Company) and Kairos Future (Strategic Futures Consultants) is spot on and true based on the conversations. Some excerpts:
“Hand on heart: Is your prime goal with adopting new technology incremental change or radical innovation?”
”The reason we do not invest more in transformation is not lack of resources. It’s because we simply don’t know what to invest in”.
– Major Bank executive (Tieto report)
“Even though they might have a rough idea of where the market and technology is heading, they are uncertain of how the business models will play out and what the consequences will be. The questions those executives need to ask is: Will you be more certain if you sit waiting, or if you invest small in exploration and low-cost experimentation?”
Easier said than done, transforming and changing. But waiting to be sure isn’t the route you want to bet on.
Don’t just stand there (chapter):
Do you have a clear view of where the future of your industry is heading over the next 3-7 years?
Would you describe your company as an active future-oriented reallocator?
Do you have a process for scouting and acquiring promising companies or technologies?
Do you actively engage your partners and customers in co-creation activities to find the future for you?
“Consequently, having a culture where people are embracing or at least not rejecting changing behaviours (my marking), practices and attitudes is necessary if a fundamental transformation will ever take place.”
That’s an interesting distinction when working with change. You don’t have to focus on loving change, start by not disliking it so much, and from that position you can do things slightly different. Doesn’t sound as a big difference, but it is. Don’t go for daring to do things differently. Go for not being afraid of trying some things differently.
“As neurologists and neuroscientists say, we become what we constantly do. This is true not only metaphorically. Even our brains are being transformed and rewired as we start to use them in different ways. So fundamental transformation in terms of new practices and behaviours is – literally – fundamental.”
For a very long time, Hyper Island have been using the #himc tag, which stands for hyper island master class, to share think pieces, concrete advice, brain food and absolute must-reads.
Many organisations need help and advice on how to make better (business) sense of emerging technologies and possibilities – and more importantly subsequent behaviours and implications for business and brand strategy – and I, personally, do a lot of work in that area (both as occasional hyper island collaborator, but primarily under the funny you should ask flag).
In all honesty, just by following the #himc tag (which cost nothing but a few minutes of attention), as they live by the sharing is caring rule of thumb, any company looking to better navigate an increasingly complex reality would benefit greatly. It doesn’t have to take much, but what is a required first step, is to start letting new perspectives, inspiration, opinions and realities through that filter called business as usual.
MITSloan presented some results from a survey about the need for digital transformation (companies face an imperative: adopt new technologies effectively or face competitive obsolescence as the study states). Results include an interesting, but not so strange, paradox:
78% say achieving digital transformation will become critical to their organisations within the next two years
Only 38% of respondents said that digital transformation was a permanent fixture on their CEO’s agenda
I think this circles the most pressing issue and bottleneck; the interchangable use of digital transformation and business transformation.
Looking at digital technology (in whatever shape or form) from the level you stand, will not help you transform the business. Albert Einstein said that “No problem can be solved from the same level of consciousness that created it”. If you are expecting business transformation, you need to work on where that transformation might be going before you look at digital technology. Multiple answers will do too, scenario planning and future creation are exercises in plurality, but you simply cannot view things like you used to.
Despite growing acknowledgment of the need for digital transformation, most companies struggle to get clear business benefits from new digital technologies. They lack both the management temperament and relevant experience to know how to effectively drive transformation through technology.
Brand therapy in order to aim business transformation
So It’s backwards. Technology won’t give you the new future and reveal possible business benefits, it helps reach it and to an extent anticipate it. Companies need to revisit their entire reason for being, the meaning of them in peoples’ lives. Turn it inside out, because whatever you are now was created in a reality which is no longer. You need to go to brand therapy. Looking at yourself through the same old eyes simply cannot reflect a transformed image. You need a new level of self consciousness which means you have to have the guts (and realise the scope of a transformational process like this) to question old truths. You have to be prepared to redefine what you do (the business) as opposed to how you do things (the tools).
What I say is missing from this is the lack of a clear purpose and new self consciousness. The pieces that help give change a clear direction, reason and fundamental meaning.
There are product categories and then there are meaning markets. Well, to me there is. I keep coming back to the importance of brands thinking about themselves as having meaning in a greater context. What is the meaning with us? Of course viewed from the other side it’s about what value do I (user) get out of them (brand). And when corporations can ask themselves that question from the perspective of a consumer (customer centricity) is when you start seeing opportunities within a/your meaning market.
Product categories are limiting. Ford as a car brand? Then go ahead and invent better cars (and product innovation is of course needed). Ford as mobility brand? Then it makes perfect sense to team up with (hell they could have started it) Zip Car and help sell transportation by the hour to consumers used to buying music by the song, as Gretchen Effgen, of Zipcar, put it a while back. Joint miles program with air line? Why not.
In digital transformation (i.e. business transformation, mind you) – definitions, perspectives and self perceptions makes all the difference. This, by super smart Deborah Mills-Scofield, I liked:
“There is a balance between using the past to understand the present and guide the future, on the one hand, and on the other, creating something fresh that leaves the old behind. We need analogies to understand the new (eg, horseless carriage) yet they also hold us back by it constraining our thinking (eg, horseless carriage).”
And if you think that’s only about semantics and words, here’s the knock-you-straight business version from Peter Drucker.
“The greatest danger in times of turbulence is not the turbulence; it is to act with yesterday’s logic.”
Almost all clients I’ve come in contact with and in any way consulted in digital transformation, whether tactical or strategic, the issue has sat there. Definitions. Definitions reinforced by legacy. This keeps you distanced from the future. Regardless of how evenly or unevenly distributed it might be…