By Peter High. Published on Forbes
Understandably, we often read of former business stalwarts that become disrupted by digital native organizations, losing stature and market share along the way. Harvard Business School professor Sunil Gupta has written a book entitled Driving Digital Strategy, A Guide to Reimagining Your Business, providing a framework for businesses to follow to avoid this fate while thriving in the digital economy. Best Buy has gone from showroom for Amazon to a legitimate competitor with it within the realm of consumer electronics. Traditional media company, The New York Times has created a thriving digital product behind a carefully designed paywall. John Deere has formed a data-analysis arm to complement its farm-equipment business, substantially growing its business in the process.
Peter High: I would like to start with your new book, Driving Digital Strategy, A Guide to Reimagining Your Business. This is a topic that is on the minds of many technology executives who lead immigrant organizations as opposed to digital native organizations. The challenge these digital immigrants face is profound given the legacy systems they have in place and the enormous scale on which they need to be transformed. Where do you believe these executives should look to begin this transformation?
Sunil Gupta: For the legacy companies, it is a more significant challenge than for a startup since a startup begins with a clean slate. With these legacy companies, I compare this transformation to changing an engine on a plane that is on fire while it is flying. Established companies must strengthen their core business while simultaneously building for the future, which is a daunting task. In my last ten years of research, which culminated in my book, I have found that there is not a single place that you need to touch for digital transformation. Instead, there are four broad parts that organizations need to look at more closely.
- The first is the company’s business strategy and its entire business model. Companies have to figure out how to create and capture value while completely changing because of technology.
- The second component is the company’s internal operations. This ranges from many of the company’s functions such as R&D, manufacturing, supply chain, distribution, among other areas that are all touched by technology.
- The third area is how companies interact with their customers. With digital marketing and social media, the conversations with the customer have changed significantly.
- The fourth part is how companies transform their internal organization in terms of designing their structure and building the skillset inside the organization for continuous learning.
I do not believe that there is one single part of the organization that needs to change, but instead all four of these parts eventually must come together to make that transformation.
Regarding where to start, I would always recommend starting with the end consumer. This allows companies to understand how the consumer trends are changing, how the company’s value proposition is shifting, and if the company can solve the consumer pain points in a different way than what was previously done.