To bring a legacy business into the digital era, managers need to unlearn all the old rules.
Companies are like people, and we grow up and our own experiences shape — literally shape — the wiring inside our brains, as our neurons form as we grow into adulthood. And that gives us skills, and intuition, and ability to seize opportunities, and examine things, but it also blinds us to a lot of things around us.
So, if your company grew up in a completely different analog era, that’s how you grew, and how you established your distribution chains, and how you built your brand, and how you learned who your customers were, and you learned how to make money, then you are now operating in a completely different environment.
The hardest part is to identify those assumptions in your strategic thinking. How do we learn to adapt and evolve our business in a way that we are going to continue to grow in the digital age, in an economy that is so characterized and transformed by the successive waves of digital technologies?
Now that challenge is fundamentally different — what I would call it digital transformation — from starting a new business. To say “we have a company that’s already in existence, and we need to transform. We need to figure out how do we move into this next future.”
It‘s not about what technology you’re using, and how you deploy it, and all those sort of aspects. The hard part is actually about strategy, about leadership, and about new ways of thinking. We look at this by looking at five broad domains of strategy: to rethink customers, to rethink competition to rethink data, innovation and value. “What is your value to the marketplace.”
And, if we can use these as a way to understand how the strategy rule book for every business has changed in the digital era, and that we’re playing by rules we don’t even realize we’ve learned. We’ve absorbed them, and that is shaping every business decision we make. If we can learn to step back, and relearn some of that thinking, any business can start to identify opportunities for growth and new value creation that are going to move them beyond what they‘ve done in the past and lead them into the next stage of digital growth.
David Rogers, a member of the faculty at Columbia Business School, is a globally-recognized leader on brands and digital business strategy, known for his pioneering model of customer networks. He is author of four books, including “The Network is Your Customer,” and the forthcoming, “The Digital Transformation Playbook: Rethink Your Business to Adapt and Thrive in the Digital Age.”
At Columbia Business School, David teaches global executives as the faculty director of Executive Education programs on Digital Marketing and Digital Business Strategy. His recent research with Columbia’s Center on Global Brand Leadership has focused on Big Data, the Internet of Things, in-store mobile shoppers, digital marketing ROI, and data privacy.
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