“The enterprise that does not innovate ages and declines, and in a period of rapid change such as the present, the decline will be fast.” This was according to Peter Drucker, a renowned management consultant who has contributed a lot in the field of practical foundations in business corporations.
Innovation is not just important. It is essential. You achieve business sustainability by innovating and adapting to change as it promotes growth and introduces new ideas, workflows, etc.
The same goes with digital transformation; by transforming, you are reimagining your business to meet the needs of these changing times. When you are not innovating, or not doing transformation properly, you are not investing on your business’ long-term potential and survival.
For example, in 1965, an average lifespan of a company was 32 years. In 2020, the average lifespan is just less than 22 years. It is pretty clear that the long-term trend is declining longevity in relation to companies on the S&P 500 Index, and it is expected to decline even further year after year.
Let’s have another example. Take some time off and think of your childhood or college days. Think of the products that you used while growing up. Are they still around? Do you see their social media pages up? Can you find their products in groceries or malls? Or are they already in the museums or in some other people’s time capsule?
If you look at businesses that have fallen through hard times, you will see that there’s more than just one reason why they are no longer around. There are businesses which failed to provide the overall benefit for their customers. Others struggled to connect with their market, and some had poor leadership that led to loss of opportunity and closure and failure to compete with the times and other competitors. They were unable to keep up with the pace, such as understanding the behavior of their customers. They failed to keep tabs on day-to-day issues while pushing for those deliverables they think are required or crucial to keep their relevance in the market.
Some businesses see their issues a tad late or try to fix matters on their own without proper data or information. Others choose to simply ignore the problem because they are too complacent, and this creates bigger challenges. Unfortunately, more issues will start to rise when they try to troubleshoot at such a late stage, making their efforts inadequate. Businesses must realize that they need to see things before they happen. They need to be proactive and to brace themselves for a lot of hard work and deal with those problems before these become inevitably difficult to overcome.
Personally, I believe it all boils down to the connection between the needs of the customers who love your product and your internal business processes that fulfill your brand promise. If these two are not in sync, your business will have a hard time keeping up and it will be difficult for you to survive, especially at this point in time when we are in a world where competitors are faster, smarter and more calculating.
This is what digital transformation does. It instills sustainability within your business and helps you avoid being a thing of the past. Digital transformation helps your business to become relevant amid the changing and disruptive times by creating a more sustainable business overall. Transformation develops and discovers untapped value for both your target market and employees.
Digital transformation is data driven and allows you to make sound decisions based on information that you gather, making you discover and seize opportunities out of circumstances, and turning them into revenue. Digital transformation also allows you to connect to your customers through their behavior, allowing you to be more competitive over those who offer the same business or service.
Digital transformation is like The Dakar Rally, one of the toughest motorsport off-road endurance racing events where drivers and vehicle manufacturers are tested to their limits by crossing the Sahara Desert, traversing sand dunes, mud, camel grass, rocks, and erg among others. They race for at least 7,000 kilometers over the course of the event. Intense preparation is needed for you to finish this event, and if you are not well prepared, you will fail. Relating it to your business, digital transformation is your preparation for all the terrain that you will encounter.
Digital transformation does not have an end state; it never stops. It’s going to be an endless desert, sand dunes, and obstacles that you will have to face. But with the right strategy and planning, it will be your guide on how you will constantly overcome obstacles. It will help you tap your organization’s full potential and see your customers and employees differently to maximize value.
Digital transformation matters, and if you do it properly, your organization will be more creative and innovative. Your business process times will be shorter, things will be done more efficiently, costs of production will be reduced, there will be real-time communication with your target market, better revenues can be realized, and customer loyalty will be achieved.
Again, digital transformation is more than just innovating and improving cycles, processes, and technologies. It deals with survival amid tough competition. Economies and markets are becoming more fragile, things aren’t as predictable as before, and disruption is something all organizations will face at some point. It can make or break a business. Some organizations will fade, others will shine, and new opportunities will rise out of other organizations’ failure, circumstance, and consequence.
As published in The Manila Times, dated 10 August 2022