In the last post DIGITAL TRANSFORMATION Part 1, click to get caught up! The credibility gap, especially for the solopreneur, is a critical concept you need to know! However, digital transformation is not just about a solopreneur, networker, real estate agent, or consultant. Digital transformation is for every level of business.
Nothing is a greater priority than the digital transformation in 2020-2021 business. The reasons are clear:
“Digital technologies are enabling radically new ways to deliver value to customers, changing competitive balance, and creating the new economics of markets.”
Change is nothing new. However the rate in which change is occurring is unprecedented. While new technologies may threaten established businesses, they can also create real tangible opportunities. There is a real concept that many companies are facing; it is “FOMO” (Fear Of Missing Out). Many established companies are not worried about going out of business, but are more concerned about missing out on opportunity.
There are four types of digital transformation:
- Business Process
- Business Model
Let’s be clear. One or two of the above by themselves is not transformation. There is symmetry and necessity in having all four. Opportunity, without doubt, will be missed when companies are focusing on solely culture or process. It is the symmetry of all four that brings about real transformation.
Process Transformation. A significant focus of corporate activity has been in business processes, such as data, analytics, APIs, AI, and other technologies. This will offer companies inherent value and new ways to reinvent processes. What is the goal? In many respects it is to lower costs, reduce cycle times, or increase quality and efficiency. In short, doing more in less time with higher ROI. Our friends over at KissFlow have a great breakdown of process transformation.
Business Model. Companies that are pursuing digital technologies to transform traditional business models. Process transformation focuses on defined areas of the business, business model transformations are aimed at the building blocks of how value is delivered in the industry. The word value has become a “coffee house” term that is often misused by Executive and Consultants. Value is the precise item that investors look for overtly and customers demand subliminally.
Domain Transformation. An area where we see surprisingly little focus but enormous opportunity is the area of domain transformation. New technologies are redefining products and services, blurring industry boundaries and creating entirely new sets of non-traditional competitors. Often new market opportunities come and go. Executives are very narrow in their approach, even in younger companies. Often markets and transformation are not put together in the same sentence. It would fall in business development or sales. Emerging markets however, drive transformation.
Cultural/Organizational. Full, long-term digital transformation requires redefining organizational mindsets, processes, talent and capabilities for the digital world. Best-in-class corporations recognize digital requires agile workflows, a bias toward testing and learning, decentralized decision-making, and a greater reliance on business ecosystems. And they take active steps to bring change to their organizations. Cultural transformation is a PhD level class. No single post can truly do justice to this change or shift. Yet, when it comes to cultural change, it has to be top down. Not seen as a have to, but a buy in of mission and purpose.
Cultural change in new and emerging companies like Better.com are making their mark in the mortgage industry. Process may play a role. It is the dramatic cultural changes that have driven their growth, process, and appeal. Markets recognize it. Customers recognize it. Wall Street recognizes it.
It’s Time for Transformation
The complex and strategic nature of these opportunities require buy-in and balance. Transformation is taking place in real time while maximizing your current business models and channels. By changing the traditional building blocks of value (perceived or otherwise), companies that achieve business model transformation open significant new opportunities for growth.
Smart Business Money: Do not let corporate terms dissuade your company from taking action. These are not “fintech” terms or Fortune 500 terms. This is not for revenues of $5MM or more. These foundational principles are for any company, in any industry, and whatever stage you are in. Implementation, action, and commitment from the top down.