How many more years will we need to endure the Digital Strategy and Digital Transformation buzzwords?
Once upon a time business leaders formulated their company’s internet strategy. In 1995, IBMs then CEO, Louis Gerstner was a visionary for creating an internet division as described in an IBM article appropriately included in their company history section. The article describes Gerstner’s action to drive IBMs early internet strategy;
“Gerstner eventually formed the IBM ® Internet Division under Irving Wladawsky-Berger, and gave him the job of formulating and rolling out the company’s Internet strategy across all business units, to get everyone, he wrote, “to embrace the Net.” IBM would be the “networked” example for customers.”
Does anyone reading this article work for their company’s Internet Division today? Are buzzwords commonly used in technology and business centered around digital becoming the new internet? Is Digital Transformation too general to continue to have an impact? Digital and Internet will exist for a long time to come just like electricity has been very relevant since its adoption but we no longer evaluate our electricity strategy. Unless we are discussing moving towards more sustainable (green) energy, but that is a different discussion. Most companies are not building their own wind turbine farms to power their buildings and factories. They still plug into the grid. The point being that while electricity, the internet and digital assets are vital to a well performing operation today, they are foundational and no longer a strategy.
While there appears to be a widespread agreement that electricity and the internet are foundational to business, why is the jury still out on digital?
If you bring in a new cloud based software, did you just complete a digital transformation? Or do you literally need to go through your old file boxes and digitize every last paper document to have completed a digital transformation? It could also be that you can only claim digital transformation status by installing all the latest and greatest software technologies in your organization. At least marketers representing technology vendors would like you to think that.
This checklist can include blockchain, chatbots, Artificial Intelligence (AI), Internet-of-Things (IoT) and Robotic Process Automation (RPA). To gain your official Digital Transformation badge of honor you must install all of these cutting-edge technologies whether they make sense for your business or not.
Have you failed at your digital transformation if your customers are able to walk into a brick and mortar store to purchase your products in person? If digital transformation means a wholesale move to e-commerce why did Amazon, the world’s leading e-commerce operator, acquire Whole Foods?
Maybe your business needs an app. Unless your clients can access your organization through a mobile app you have not yet achieved Digital Transformation? Then again, most B2C businesses already allow their customers to order or learn more about them through an app they released directly or through a third-party service like Yelp.
For years after the internet was launched and transformed the economy and business landscape, internet strategy lived on as a buzzword - until it didn’t. We all know those business buzzwords often cited by business leaders, journalists, job candidates during an interview and businesspeople of all stripes hoping for an edge by attaching themselves to the clever word of the day.
Why are buzzwords used well past their expiration date? Because they are used as training wheels for business practitioners and some people want to ride their bikes until the wheels fall off.
The world of business is fast-paced. Leaders need to give constant speeches and conduct frequent media appearances. Job hunters have to undergo dozens of rapid interviews. Employees are under pressure to stand up during meetings and provide clever insights to advance their careers. Journalists need to publish daily and weekly articles. Marketers don’t have to use creativity if buzzwords can be used instead.
We cannot all be generational visionaries like Elon Musk, economic PhDs devoting our waking hours to research, or putting our day jobs on hold to perform deep analysis prior to every email we send, sales pitch we make, marketing material we put out, or article we publish. Buzzwords allow us to bypass insight and get through these daily situations quicker. Most of us are guilty of depending on buzzwords to save the day.
As they say - all good things come to an end. The question is always when will these clever buzzwords we rely on today, that lack the same practical meaning as they may have once carried, be replaced ?
Before a buzzword is created, it is actually a real strategy. In 1995 the internet’s impact on your business was a real decision that required the formulation of a strategy. In those early days, it was not obvious to every leader what the full impact of the internet would be on their business. Making big bets on the future of the internet in 1995 would have been considered a very strategic decision. While it would have been visionary for a CEO to launch an Internet Division in 1995 that would carry less of a punch today.
We can imagine a farmer’s decision to swap his horses for the gas-powered tractor in 1900 was a strategy-driven decision but not so much in 1975.
It's hard to know when the last time internet strategy as a buzzword was credibly used by a journalist or a CEO or anyone in business. At some point it was widely used to describe all business activities and the next day it was not.
Yes, electricity is a fundamental and core requirement of practically every business. By definition, a core requirement to power a business is not a strategy. A strategy can only exist when multiple choices are available. The selection and combination of those choices become your strategy. The only way for the internet today to still be a strategy would be if not having the internet was also a credible decision. Same goes for anything digital. The only method for digital to still be a strategy is if not digitizing is also a credible business path in 2021.
In 2002 maybe CIOs were still debating their Blackberry strategy. Should their sales teams be equipped with this amazing new smartphone technology to stay better connected to their customers and the home office while out in the field? What CIO today spends time thinking about whether or not their teams should have access to a smartphone?
What would be your reaction today if your CEO gave a speech to discuss your company’s internet strategy? What would you think if your company’s CXOs were spending time strategizing if your office building should have an electricity strategy? What would even be said in that meeting?
CEO: Ok team, I would like to learn more about your perspective on this electricity thing. Should we continue to pay our utility bills and stay connected to the power grid? I would be interested in your frank comments on the pros and cons so that we can finalize this strategy and get a press release out.
The question we are asking is what is the expiration date for today’s overused terms: Digital Strategy and Digital Transformation?
We need to make a distinction between pillar business concepts and trends. Take the terms business transformation or modern technology. These are constant business terms. A business could have discussed their business transformation and adoption of modern technology in 1963 as well as today and likely 50 years from now.
Let’s purposely look at twenty years from today. Do we think CEOs in 2041 will be discussing their company’s business transformation and how to adopt modern technology? If capitalism still exists then the answer is a resounding yes. In contrast, do we believe CEOs will stand up in front of their stakeholders to push for a digital transformation in 2041?
Let's first look at the definition of digital transformation. If you Google ‘Digital Transformation Definition’ you will receive different flavors of what it means. That’s likely because marketers have modified the meaning of digital transformation to support a million different products.
A good one is this one provided by Mark K. Pratt:
"Digital transformation is the incorporation of computer-based technologies into an organization's products, processes and strategies.” Access Mark’s full article titled What is digital transformation.
Is it credible to expect that business leaders in 2041 will be spending time thinking about how to incorporate computer-based technologies into their organizations? As difficult as it is to predict the future, we can likely estimate that no one will be talking about digital transformation and digital strategy in 2041. If that is the case and we know that these terms are widely used today, the next logical conclusion is that sometime between now and 2041 these terms will be buried.
In this current Deloitte article as published in the WSJ a survey taken in 2021 reveals shocking findings:
“In fact, in times of disruption, digital enterprises have an edge over their less digitally mature competitors, according to the 2021 Deloitte Digital Transformation Executive Survey.¹ Now in its third year, the survey found fresh evidence that digitally mature companies are more resilient and better able to navigate rapid change—and they do significantly better financially as a result.”
In other related surveys, it was also uncovered that mature companies who have adopted the internet are outpacing their less mature competitors who have still not embraced it.
Factories at one point in time had to operate without the ability to plug industrial equipment into an electrical socket. How did they do it?
This article describes this process as follows:
“The answer is, miles of leather (or cotton) belts. Factories had their power source, whether it was a steam engine or a waterwheel, rigged up to drive huge rotating shafts called line shafts. These were suspended overhead and festooned with pulleys. Belts ran from these pulleys down to the factories' machines (or to intermediary pulleys driving another belt), where they drove each machine through another pulley. The line shaft was the powerstrip of the day.”
The article also provides interesting illustrations of what that environment looked like if you want to take a look.
It is inevitable that one day soon, you will stop seeing the terms digital transformation and digital strategy splashed across the internet. One day soon you will also stop hearing those terms in your business meetings. The only question is how much longer do we need to wait for that day? Let's get to the next generation of buzzwords already!