Today’s digital technologies have transformed consumer expectations, and distributors are under mounting pressure to adapt to these new demands. For example, websites optimized for mobile use and instantly available customer-support chatbots are now taken for granted as expected features. Many traditional businesses must go through digital transformation (DX) in order to compete effectively with digital-native brands that have mastered these and other e-commerce capabilities.
Addressing the Failure Modes of Digital Transformation
Although DX is merely the adoption of digital technology to transform your business, it is a very challenging process in practice. More than 80% of DX initiatives fail to create lasting business transformation.
So, how can you ensure your distribution company falls into the 20% who achieve long-term success? First, we must identify some of the most common failure modes of DX and address each and every one of them. In a presentation at MDM’s upcoming Digital Distributor Summit, I will provide a dependency analysis that reveals insights into how to address these failure modes and in what order.
Reverse Engineering a Successful Digital Strategy
Second, we have to understand why every business must transform itself digitally now. The defensive argument is simply to remain competitive in the market and survive. However, an offensive perspective here could provide greater insights, because it forces companies to think strategically about customers. And this will reveal the end state of DX, which is digital re-invention of the business. This very challenging, but by visualizing what the final stage of DX might look like, we can then reverse engineer that desired outcome. And I will provide a framework to do so, using what is known as the 4-gears model.
The de facto norm of traditional business is a 2-gear model based on acquiringcustomers and then monetizingthem. In this digital age, as customers have shorter and shorter attention spans and quickly shift focus in the digital world, the need for the 4-gear model evolved. Proposed by Geoffrey Moore in his book, “Crossing the Chasm,” this model adds engagement to build and strengthen customer relationships, and enlistment to recruit the customer to advocate or market on your behalf.
The 4-gears model reveals the organization behavioral challenge of DX and explains why so many DX initiatives don’t last. However, it also reveals an approach that enables distributors to maximize their chances of success by taking baby steps toward the final state of DX.
A Business Imperative
Successful DX must go beyond the initial adoption of digital technology to change the process, people and culture of the entire company.
In my Digital Distributor Summit presentation, I’ll discuss why DX is a business imperative today, the risks of not transforming your business and how can DX help you compete more effectively. Using the 4-gears model as a framework, I will help you visualize the final state of DX so that you never lose sight of the destination. This is an important step, because instituting DX is a multi-year journey.
I’ll also address the question of “Why change now?” by examining many other technology-driven business transformations in history. This is very hard, especially for large enterprises. But I’ll share an example of a customer-centric digital strategy that paves ways for long-term DX success. And, you’ll leave knowing how to apply behavioral economics to increase the success rate of your DX.
I hope to see you in Denver. For more information on my session, “Digital Transformation Success – One Baby Step at a Time,” taking place at 9 a.m. on June 19, visit digital.mdm.com/agenda/.