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Surviving in the digital age—make sure you survive the next decade

JohnJ_1

Digital Thinking.jpgThere is no doubt, we’re living in remarkable digital times. In the past decade, we’ve experienced a host of incredible changes. Today, we are always connected (smart phones, social networks, persistent chat, etc.) and digitally integrated smart “things” anticipate our needs (thermostats, boarding passes, wearables, etc.). We talk to our computers on a regular basis (through the capabilities of Alexa, Google Now, Siri, Cortana, etc.). The victories of the digital revolution surround us. But the battles of digital revolution are being waged in companies and enterprises where very successful firms face becoming irrelevant if they do not react and respond to the market challenges that the digital revolution brings.

Netflix is a great example of how the battle of digital is disrupting the existing marketplace. Founded in 1997, they disrupted the legacy video rental business by offering DVDs by mail from their extensive library, delivering over 1 billion discs by 2007. The incumbent, Blockbuster was unable to respond in a timely manner. The company introduced DVD subscriptions in 2004 and today is nearly nonexistent.  

Netflix leaders learned the importance of speed and innovation in the digital era. In 2011, they launched their streaming service, and Reed Hastings, CEO explained,

“For the past five years, my greatest fear at Netflix has been that we wouldn't make the leap from success in DVDs to success in streaming. Most companies that are great at something—like AOL dialup or Borders bookstores—do not become great at new things people want (streaming for us) because they are afraid to hurt their initial business. Eventually these companies realize their error of not focusing enough on the new thing, and then the company fights desperately and hopelessly to recover. Companies rarely die from moving too fast, and they frequently die from moving too slowly.”

Netflix recognized the need to innovate and move faster than the competition.

In the digital revolution, the ability to maximize speed without sacrificing quality will determine the winners and losers. 

Netflix clearly has been a winner so far.

The digital revolution is happening everywhere

Ridesharing (Uber, Lyft, BlaBla car, etc.) is a typical example of disruption. Consider education, where online and virtual classes upend existing university business models. Look at Amazon and bookstores, or even books themselves (e-readers). There are numerous examples of how a digital revolution leads to significant disruption in existing industries.

So, what can you do to prepare?

Start with the reality that change and disruption is inevitable for most businesses. Understand that IT is core to your business (Software is eating the world). The sooner that you can orient to this new reality, the sooner you can make the required changes to adapt and thrive. Once you have accomplished this mental shift, the way forward then is:

  1. Accelerate experimentation and innovation
    Test hypotheses about how to engage your customers with new and innovative products. Explore new business models. Consider MIT Sloan’s perspective on enduring principles in a digital revolution, and also explore how your existing business beliefs may be disrupted as well.
  2. Learn, decide and take action

The lessons of the past will not always be the solutions to the challenges we face in the future. As leaders, we need to embrace learning opportunities and when we find success, be prepared to seize the day and act. 

  1. Repeat
    The faster you can iterate, learn and react, then you will gain competitive advantage. Consider Col John Boyd’s OODA loop as a guide to succeeding in a digital revolution, where the challenges faced by fighter pilots is familiar to business leaders facing a digital disruption.

In the new world, it is not the big fish which eats the small fish, it’s the fast fish which eats the slow fish,” — Professor Klaus Schwab, Founder and Executive Chairman of the World Economic Forum.

 

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Learn more about how critical the digital revolution can be in our upcoming webinar “Digital or Dead,” where my friend Mike Shaw and IDC’s Thomas Meyer will share their insight about how important is for leaders to be ready for the digital revolution: “Digital or Dead” – July 12, 1300 GMT/1400 CMT 
Register here, as space is limited.

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JohnJ_1

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