Text Content from KK Diaz; Interview conducted by Nic Jain
The late Alvin Toffler is famously quoted as having said: “The illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn and relearn.” And today, as we entered a new and mostly unknown business environment, these words couldn’t be more relevant.
Many business leaders were caught off-guard and unprepared by the sheer devastation of the Covid-19 pandemic. And it will not be the leaders who know it all but those that want to learn it all who will seemingly have a better chance of surviving what is seemingly going to be a new normal for business.
Even before the pandemic hit, the average lifespan of a company listed on the S&P 500 Index had already decreased by more than 50 years in the last century, from 67 years in the 1920s to just 15 years today.
In the last few years, we’ve seen “too big to fail” industry behemoths unexpectedly replaced by smaller, leaner and smarter businesses. This is as a result of, and supported by, the forces of globalisation, intense competition, evolving customer preferences, the power of the internet and the speed at which technology had been and is always changing.
Today, companies have to better position themselves to avoid failure. And one way to do so is through digital transformation.
What is digital transformation?
Digital transformation is the integration of digital technology into all areas of a business, fundamentally changing, and improving, the way the business operates and delivers value to its stakeholders, customers and communities. Moreover, it represents a cultural change that requires organizations to continually challenge the status quo, experiment, and get comfortable with failure.[i]
Research from Accenture supports the need for businesses to intensify their digital transformation efforts. The research states that:
- Only 6% of global companies made significant progress in digital capabilities but failed to translate that into financial strength.
- 70% are considered laggards in terms of digitalization.
- Only 18% of global companies are identified as digital leaders.
- Digital high performers enjoy, on average, 32% higher revenue growth, compared to other companies
This clearly means that it is more important than ever to prioritize the relevance of your value proposition and the sustainability of your business. To achieve this, you must look at two fundamental dynamics:
- Evolving customer preferences, and
Evolving customer preferences
The way in which customers find, buy and use products and services has evolved significantly over the last decade.
Their expectations are driven by:
- Instant gratification;
- On-demand delivery;
- The subscription economy;
- Product and service personalization; and
- Stiff global competition.
Businesses which wish to continue growing their customer base must align to these trends and changes.
In order to cater to evolving customer expectations and remain relevant, businesses must adapt to, meet and deliver on these expectations. Because these expectations are driven primarily by the internet and technology, businesses also need to adapt their technology accordingly. And since the Covid-19 pandemic, this need has been forced become a critical necessity.
When it comes to digital transformation, technology is more of an enabler than a destination. In other words, technology is merely the vehicle that’ll take your business to the ‘digital transformation’ destination. You still need a leadership-driven purpose and vision of where the company is heading; an inspiring vision that galvanizes an entire organization to work together to reinvent itself and to deliver new and even greater value for its shareholders, staff, customers and community. This vision will ensure that all these stakeholders embody the values and culture needed for the business to arrive at its new destination.
Digital transformation is not an easy project to undertake and will either make a or break a company and its leadership. It is a challenging, never-ending process that necessitates much from the brave business leaders who choose to take their companies on this journey. These leaders need to help their organizations develop the ability to innovate and to reinvent themselves as needed.
Most importantly, they need to imbue organizational agility within their businesses by ensuring that they have the ability to:
- rapidly change or adapt in response to changes in the market; and
- respond successfully to the emergence of new competitors, the development of new industry-changing technologies, or sudden shifts in overall market conditions.
Sometimes, for this to happen, leadership needs to reimagine everything from the ground up.