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article imageHow to adopt a digital transformation strategy: Q&A Special

By Tim Sandle     Aug 27, 2018 in Business
Matt Mead is an expert in aligning digital transformation and business strategies. In conversation with Digital Journal, he shares key warning signs that can signal if a company is vulnerable to digital disruption.
Many businesses think that to fight off competitors, a company needs to constantly adapt and grow to provide the customers with what they need. However, this can lead to problems when digital disruptors target the company.
According to Matt Mead, CTO of the digital tech consulting firm SPR, a key lesson is that if your company fails eventually, it’s not going to be because of an Airbnb- or Uber-like digital disruptor; it is going to happen because of the thousands of little cuts that are sustained from companies too little for the big corporations to notice.
Digital Journal spoke with Matt Mead about the steps required by established businesses to implement a long-term growth plan and to address the disruption from startups.
Digital Journal: How important is digital transformation for a business to grow and thrive? Is this true for all businesses?
Matt Mead: Digital transformation, or the closing of the gap between a company’s current technology and the technology available that provides meaningful ROI, is a critical step for a company to take or it risks eventually failing.
In addition, there is no longer a barrier to entry with regards to capital for computing resources and access to advanced technology with the cloud, meaning digital transformation is a cost-effective way to better processes and make adjustments in the way a company does business.
For example, even manufacturers of handmade ukuleles from Hawaii are using new technology to augment their process through technologies like CNC milling and CNC laser etching and cutting.
DJ: What about customers?
Mead: Digital transformation technologies also provide benefits to the customer or end user, which creates “stickiness,” or loyalty, for customers. By providing more value, customers are more likely to stay with a particular supplier or vendor because of the even marginal advantages they provide.
Finally, technology created to support the emerging remote and gig workforce is encouraging experts to collaborate in distributed teams that pull together amazing business and technical talent in a way that wasn’t possible earlier in history.
DJ: For established businesses, where do the main disruptors come from, if it's not your usual Ubers and Airbnbs?
Mead: While situations where startups quickly overtake and dominate an industry have happened (e.g. Uber, Airbnb), it is rare. Worrying about this kind of disruption is like worrying about a plane crashing: it is unlikely to happen, but if it does, there are almost guaranteed, disastrous outcomes. Similarly, the Uber and Airbnb scenarios are unlikely, but when they’ve happened, they’ve had dramatic consequences.
The more likely scenario is that competitors, both large and small, slowly but steadily chip away at portions of your business. They can leave a once market-dominate business model full of holes and no longer structurally sound. It is this “death by many cuts” in business that is more common than an industry being overwhelmed by a new entry into the marketplace.
DJ: How should a long-term digital growth plan be put together to adjust for this risk?
Mead: Specifically, they should work to continuously leverage new technology to provide a richer experience for new and current customers, to reduce cost, achieve greater efficiencies, find and optimize new and existing revenue streams, and make their organization a destination for employees.
DJ: Is this straightforward?
Mead: This is all easier said than done, because while large organizations usually have a digital transformation initiative, most are not successful. But the best defense in this digital era is for companies to make a commitment to being innovative. For example, Apple cannibalized its iPod business when it incorporated most iPod features into its iPhone. But if Apple had not cannibalized its iPod business, it was just a matter of time before some of its competitors did it. Digital transformation can be risky, so it takes the right team and leadership to make bold and courageous decisions like this when being innovative.
In a companion article, Mead looks at why GE has put is digital businesses up for sale - as an example of a company growing too big, too fast and being subject to disruption from smaller, leaner and more agile firms. See: "Can a business really be too big to fail?"
More about digital transformation, digital disru, Disruption, Strategy
 
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