Getting "Digital Transformation" wrong

"Google Trends" records the first time someone asked "what is digital transformation" as December of 2008. Over the past 10 years Google reports that we've been asking this question with more and more frequency but I would suggest that the answers have been wrong...

I'll jump to the conclusion for a moment: Digital transformation is not something that a company does, it is something that happens to a company. That is -- "digital transformation" is a cause, not an effect. Let me explain...

First -- why do we talk about digital transformation as something a company does? A project or program we should undertake? I blame the consultants and the software companies (and I am guilty as one of them). Digital transformation in the last decade has been used as a way to describe something consultants or software salespeople want you to buy - hey, let's use digital technology to "transform" your business. Let's install SAP Hana!

But why does anyone care about "digital transformation" in the first place? Because of what is happening to companies. Reframe this as -- digital transforms your industry and you have to react. Digital is a strategic threat to your existing way of doing business. Digital transforms your customers' expectations, transforms your employees' expectations, transforms your value proposition. Digital transformation requires that your company react to new conditions often created by new competitors that approach the opportunity of your industry differently because of changes in what is possible due to technology.

The projects or programs that companies must engage in to respond to digital transformation -- (1) change the business model, (2) change the operating model, (3) change the way products and services are delivered, (4) change what is sold, (5) change how it is charged for, (6) change the way employees or other stakeholders are managed, and (7) change engagement models with customers. Figure those things out first, and then enable with new digital capabilities.

Digital is transforming your industry and creating a strategic challenge for you because it transforms what is possible in serving your customers and markets. Ask yourself the hard strategy question -- does what we do and how we do it have lasting value in markets that will be transformed by new technologies? If not, what changes do we need to start making now so that we will be the disruption and not the disrupted?