We already know that most the existing companies will not survive the digital transformation of markets and industries. One could imaging that it is about luck, lack of resources, or ideas of how to stay competitive. But deep diving into digitalization and innovation tells another story of why some companies are more successful than others. The key to success is having the right approach and attitude – starting from meaning and purpose.
A couple of days ago, I had the opportunity to listen to a great presentation (Politecnico de Milano) on the secrets of innovation. It is one of these fantastic topics that truly complement the digital transformation and building sustainable competitive advantage in the market. But experience tells me that the topic of innovation is difficult to understand and to find the right approach – often entangled in corporate governance and culture. What I learned from the presentation was a bit surprising and provided a new angle to innovation. Companies do not need more ideas of what to do – but a purpose and meaning of how to create competitiveness. The problem is how to select and execute the great ideas that have been collected. We are not looking for a light bulb in the darkness, but rather how we navigate – when blinded by overwhelming light. It all starts with purpose and meaning!
Many CXO are not searching in the darkness for a light to follow, but are rather blinded and paralyzed by an overwhelming bright light when it comes to digitalisation.
What I find interesting is that the same behaviour and theory (important of purpose and meaning – rather than more ideas) is valid when studying digital transformation. We see today endless articles about need for automation, robotics, and Internet of Things. These articles are address the question “what to do” (ideas) and not “why digitalisation is important” or “how has the market/industry changed due to digitalisation?” (purpose and meaning). In the same way, many CXO are not searching in the darkness for a light to follow, but rather blinded and paralysed by an overwhelming bright light when it comes to digitalisation.
Digitalisation is a tricky topic to discuss and I must say that the more I dig into the topic, the more confused I get about its complexity. As humans, we always try to simplify complex things and quickly come to a logical and rational explanation to things hard to understand. How we simplify and understand is much based on our previous experience and knowledge. Digitalisation is yet another topic where this approach applies. But viewing digitalisation from a “traditional business” perspective will give you a simple – but often the wrong logic that hinder you to fully grasp the potential of digitalisation. An ambition to drive true change and show concrete steps toward digital competitiveness requires a profound understanding of the DNA of digitalisation and how it affects corporations and organisation on multiple levels and areas. This will provide the “meaning” and “purpose” of the digital transformation – not more ideas of what to do. Digitalisation is not contained to IT, marketing or business models but rather captures the pure essence of business and competitiveness – how to compete in a market. How to get customer to select our products or services. It is the market conditions that set the rules – not the other way around! It is the political directives, economical progression, customer behaviour, technical evolution and social development that sets the scene and dictates how companies compete in the market. It is these forces that we need to understand and master to align our business-, operating- and governance model to the new reality. If the characteristics of the market did not change – there would be no need for any digital transformation.
Digitalisation is challenging the essence of business and competitiveness – why are we relevant? How do you compete in the market?
My point is that we need a new approach to digital transformation – by understanding the core of digitalisation (how it effects the company’s position in the market) and addressing the “purpose” and “meaning”. There is obviously a great risk of temporarily reducing the shareholder value but over time, there is no doubt that a correct approach will outperform any other approach. By the way, an investor will own a stock on average of three weeks – so much for the true interest in your company. Maybe it is time to address Corporate Value and how relevant the company is in the market over time. Only then can we design a “digital-proof” corporate structure to boost digital competitiveness. Without the right understanding, we will run change without the right goal or destination (is there a destination?). It becomes yet another costly transformation project without purpose – just because an advisor or consultant told you it was necessary (ideas).
- Do your homework – make your own analysis and conclusions. Find the right pre-requisites and purpose in your digital transformation. Do not follow others!
- Work with consultants and advisor who can show a profound knowledge of the true effects of digitalization. It takes many years to research and analysis to master the true effects of digitalization.
- Learn more about true innovation, digital governance and agile management. These ideas will help you to find direction in the blinding light.
- Contact Hans Gillior – your guide on the digitalization journey. Welcome!
When studying the evolution of society, we see several innovations or thoughts that have paved the way for the society over time. Great minds and companies that have challenged the traditional and created products, services and movements to drive society forward. One common denominator for these minds and companies is that they have all address the question “why” to find meaning and purpose in what they do. They often had the same resources, consultants and support as all the rest, but they address their situation in a different way – starting with purpose and meaning. The rest will follow by addressing “what” they do. It is not about having the most ideas that will win the game but having the right idea in the right context. It is about inspiring to greatness and customer experience. This is the key to digital transformation. It is time to turn away from all the articles and “ideas” – and ask what you believe in? The one who dares will be the one how succeeds. It takes attitude to reach altitude!
Hans Gillior – Digital Guru/Senior Advisor