Digital is More
While everyone talks about the impact of digital on our lives, most brands are nowhere close to taking advantage of it. The potential of digital is similar to how electricity revolutionized the world. It changes how we produce, consume, and share. Digital impacts everything we see, touch, and hear. It changes how we process all that input. Digital enables more connections, shortens time and distance. This is how customers, suppliers, and employees experience digital. It is all encompassing. Then why do brands treat digital as simply another sales channel or cost-savings mechanism?
At the core, what made companies successful in the past – processes, structures, the silos – make it difficult for organizations to move from thinking about digital as a component of an overarching strategy to transforming the business to where digital is the lifeblood.
How does one even start down this path of transformation? It requires both an outside-in and inside-out perspective. Most companies only provide a small portion of the value to their buyers. A brand sells a widget that customers take and put into a bigger widget. The problem with focusing on a widget is your competitors are working furiously to figure out how they can produce the same widget faster, cheaper, and better. It is a tough spot for any brand.
Reframe the Question
The question begins with asking, “What business are you really in?” In a digital-first world, you are no longer a widget manufacturer or service provider. There is more value that you can provide to your customers.
Let’s take John Deere as an example. Is it a 200-year old company that manufacturers equipment? No. How about a company that enables farmers to produce more? John Deere produces tractors, sprinkler systems, and many pieces of farming related hardware, but integrates all the data from those products and external streams to create more value. From providing preventative maintenance to equipment that automatically reports their statuses, to optimizing sprinkler systems synchronized with real data collected from the National Weather system, John Deere is no longer an equipment manufacturer: it is a platform for farming.
In 2011, Marc Andreessen, a co-founder of Netscape, said that software is eating the world*. He was right and still is. Widgets, plus connections help create new value chains. Re-thinking business on these terms requires rebuilding companies. Does product pricing move to a subscription model? How do you attract the necessary software talent to a culture who has not been exposed to it? How can marketing leverage the data for better segmentation, better positioning and better communications at the external touch points? The transformation may seem overwhelming, but it is necessary. Digital being the thread that integrates all parts of a company will soon be table stakes.
What would your brand look like if digital was its lifeblood?
*Mobile is now eating the world, but that’s a different post.