1. Change is not only difficult, but it is often artificially delayed
In the tech world change is the only constant, this is particularly true in 2023. As companies define their digital transformation strategies, sticky points are emerging. Digital strategy is the inflection point every business should navigate to thrive in this new age of uncertainty, but often there is hesitancy and general resistance amongst senior managers to strategic changes.
Why?
Digital transformation is not a pivot, it entails totally changing how businesses operate and disrupting existing business models.
To embrace digital transformation, managers need to communicate clearly about their fears and the challenges they anticipate. Instead of ostensibly acting like they are all for change, while doing all they can to slow down change and deflect responsibility. All in an attempt to ensure they preserve the status quo.
“If it’s not broken, don’t fix it" - doesn’t work anymore. We are now in the time of:
“If it’s not future-proof, change it.”
Digital transformation is future proofing your business. No matter how skilled or high-performing your workforce is - they will be highly prepared for a world that won’t exist if they don’t embrace digital.
2. Digital transformation is viewed as a software update
A lot of managers assume that digital transformation is as simple as acquiring the best software services available and ensuring your staff know how to use it. It goes beyond the technology at a company’s disposal; it is about understanding consumer needs and using technology as a tool to solve problems.
Here I am tempted to give an example of how super computers work.
Super computers use quantum bits or qubits while conventional computers employ bits. Bits can be thought of as a combination of ones and zeros (binary), however qubits are more complex. They allow for superimposition, which means that ones and zeros can simultaneously exist at the same time. This is what gives supercomputers their unique advantage in computational power. While a conventional computer has to factor in all possible options by going through each existing path, supercomputers can travel down those paths simultaneously.
To achieve impactful digital transformation organizations need to explore different paths at the same time. Constantly improving their offering based on consumer feedback and anchoring their processes on learning by doing. Digital transformation is not the software upgrade your business needs to be up to date. It is the paradigm shift required for sustainable progress.
3. It is not about technology, it is about people
Think about the greatest tech companies of the last 5 years. Bytedance, Amazon, Tesla etc. What makes them really unique: how their products and services have affected people’s lives.
Providing digital convenience and personalized services that focus on consumer needs. Tesla is a great example of this. It has been lauded as the standard for the EV industry but at its core Tesla is really a software company. What Tesla has done is to transform how we imagine the electrical vehicle. Not only as a product that people would purchase because of certain subsidies or incentive schemes from the government, but as an aspirational brand that offers an unrivaled digital experience. Other automakers are starting to get onto the EV wagon, however, they will face significant barriers in catching up to Tesla in this space.
Bytedance’s AI algorithms were first applied in offering Chinese users personalized news feeds based on their key preferences. This was extended to their worldwide phenomenon Tik Tok, which combined a nifty user experience with short video format, instantly getting millennial and Gen-Z users hooked worldwide. In China, Tik Tok (Douyin) is at the bleeding edge of social commerce, already offering e-commerce functions and personalized Ads that allow users to purchase products that are closely linked to their interests without negatively affecting the app’s user experience.
At the core of these solutions is an understanding that digital transformation should at the foremost be centered on people. What do people want? What do consumers need? And how best can technology be used to make life a little more convenient.
4. Your skills are important, but your willingness to learn is critical
Digital transformation is not a new concept. One could argue that it has slowly been creeping into how businesses are run since the invention of the first computer in the 50s. What makes it different now is how emerging technologies have coalesced to push us into a totally new digital era.
Let’s take fog computing as an example - it uses decentralized local networks to accelerate data retrieval and analysis. Unlike cloud computing, fog computing has lower latency - allowing for instantaneous responses since network devices are in close proximity to fog nodes. This makes the network more secure and significantly enhances data capacity: pilots indicate that fog computing networks can generate up to 35GB/hr. This is expected to transform cities worldwide. Smart cities will no longer be the subject of Sci-fi movies but a reality.
It seems while some companies are only just starting to explore the possibilities of cloud computing, fog computing has arrived. In the world of digital transformation things move at a fast pace and managers should always be willing to learn without being clouded (pun intended) by what they already know.
So many times I have noticed how limiting a manager’s technical background can be to accepting new ways of doing things. From AI to 5G enterprises that find the optimal mix of these technologies for their product or service offering will thrive. To do so managers should be ready to change the way they think about technology and its potential impact on their business.
Learn by doing, apply customer-led innovation, don’t be afraid of being at the bleeding edge.
5. Real talent is hard to come by but even harder to retain
Working on tech projects in Shanghai I have been amazed at how quickly tech staff move from one company to another. The staff turnover for experienced tech personnel is quite high. Recruiters are now taking extra steps to ensure they find tech employees who will stay for longer periods within companies. During one project with an AI app company I had to work with 3 different product managers/owners in a space of six months.
I took the time to ask some of them why they left the position so quickly despite having a competitive salary ~ the answer was always the same. They wanted a role that would challenge them and help them to learn more from someone with more experience. It is true that if your boss can do your job, chances are you will be much happier in your workplace.
As a consultant I have noticed the lack of hybrid talents in tech companies - people who have a relatively strong understanding of how to combine tech, product development & marketing and sales into a potent market strategy that will create value. This is mainly due to the siloed nature of information within tech companies. As an outsider I often have to dig deep to understand products and services and in almost all cases I have realized that not everyone is on the same page about the product / service their company offers. This is due to more than just information asymmetry, but also a lack of understanding of the overall strategic direction of the company as a whole.
This creates huge risks for tech companies - as there is no clarity on what a product / service should achieve beyond sales and abstract KPIs. I have witnessed huge amounts of resources being channeled to the development of tech features that users barely used and sometimes the basic intuitive stuff like localization being totally missed.
Digital transformation is here, how will your business navigate it?
Comments