How do you build and operate a successfully disruptive, digital business? Perhaps surprisingly, you start with your brand, not any particular digital technologies, according to someone who should know.
You probably know of, if not know personally, R. "Ray" Wang. He is Principal Analyst, Founder, and Chairman of Constellation Research, advisors to Global 2000 companies. He is also author of "A Software Insider's Point of View," a very popular blog, and has been named Analyst of the Year three times by the Institute of Industry Analyst Relations.
What you may not know is that Ray has authored a book just published by Harvard Business Review Press. That book is called "Disrupting Digital Business: Create an Authentic Experience in the Peer-to-Peer Economy." Leaving aside my concern over possibly inconsistent gerund use, I found the title provocative enough to warrant conducting one of my three-question interviews with Ray via e-mail. (I am a former Constellation Research analyst.) Herewith, my questions, his answers, and my thoughts.
Me: What's the one thing you've seen business decision makers most consistently get wrong or not get at all regarding digital disruption and transformation?
Ray: Most companies and leaders focus on the technology or on an existing expansion of incremental innovation. To truly achieve digital transformation, we need to think about how we achieve transformational innovation. Market leaders and fast followers tend to focus on business model transformation. The technology follows the business model not the other way around.
Me: What's the one thing you've seen the "punditocracy" and the media most consistently get wrong or not get at all regarding digital disruption and transformation?
Ray: The immediate reaction is that digital is about moving something to the mobile or big data space. The other reaction is that a Chief Digital Officer [CDO] is needed. We do believe that [CDOs can] play a key role today in shepherding the organization to digital transformation, but in the long run, we want digital CXOs. Imagine HR leaders who hire for digital DNA, CFOs who manage to unit-cost pricing models, CMOs who focus on business model shift and CIOs who look at how to scale out new technology platforms to support business model shifts.
Me: What's the one thing business decision makers need to do or focus on right now to begin or accelerate their journeys toward digital disruption and transformation?
Ray: Start with what your brand promise is. Figure out how you move from selling products and services to keeping brand promises though experiences and outcomes.
This, to my mind, is the crux of Ray's book, his underlying philosophy, and how to get this critical transformation right. As I've said for years, in "information technology," it's important to remember that the information comes first. Similarly, if you're going to build a digital business, from scratch or via transformation of an existing enterprise, it all begins with business goals, plans, and promises. And these absolutely must go far beyond "sell more stuff" or "attract more customers."
Whether you are a CIO focused on delivering business-enabling services to your enterprise colleagues and business partners, or a CXO focused on growing your company, your goals are ultimately the same. You and your team(s) should care most about delivering "experiences and outcomes" that make real and true the promises behind your brand. (And yes, you have a brand, even if all of your outreach is to internal "customers" and users. And if you don't know what it is, you should ask those customers and users what they think it is.)
Where delivering services, experiences, and outcomes is concerned, perception is reality. That is, the perceptions of those receiving those services, experiences, and outcomes determine the nature of the brand of those delivering them. Those perceptions also determine how successful you and your team(s) are at actually delivering what you've promised, and what you've been perceived to have promised.
All of this is equally true whether your company embraces digital transformation and disruption, or still does business primarily via phone calls, e-mails, and sticky notes. So get your brand identity, your actual and perceived promises, and the processes that enable them right, and get your organization's team leaders support for these, before you start down any technological path. Otherwise, disruptive digital technologies will only help you to make more spectacular mistakes faster and with greater visibility.
You might start by reading Ray's new book, and sharing it with your colleagues and CXOs. It's not necessarily the One True Path for every organization, but it is a great catalyst for the conversations necessary to achieve truly disruptive, truly successful digital business transformation. Please share your efforts and results, here and elsewhere, to ease and speed the journey toward transformation, for others and maybe even for you and your team.