Mark Andreesen wrote a famous blog post in 2011 called "Why Software is Eating the World" that correctly predicted the digital transformation of non-tech businesses.
More and more major businesses and industries are being run on software and delivered as online services… all of the technology required to transform industries through software finally works and can be widely delivered at global scale. Mark Andreesen, 2011
After Mark Andreesen uttered those prophetic words, many more non-tech companies began pursuing digital transformation. The most successful became known as thought leaders in their industry for harnessing digital technology to accelerate growth and optimize operations.
Well-funded technology startups continue threatening to disrupt established non-tech companies. Non-tech leaders can respond by expanding their vision of why their company exists, considering how to make customers happier, adopting new ways of attracting business, and learning how to leverage technology effectively.
Digital transformation is the process of using digital technologies to create new — or modify existing — business processes, culture, and customer experiences to meet changing business and market requirements.
Source: Salesforce
Principle 1:
Creativity is thinking up new things. Innovation is doing new things.
Theodore Levitt
Apple’s “To the Crazy Ones” campaign with its “Think Different” slogan has become widely regarded as the most successful communication initiative in marketing history. It transformed perception of the Macintosh computer from “just a toy” to "the tool used by the most creative people in the world." Its essence continues to challenge today's technology marketers and designers to be more innovative.
Answering six questions can reveal how to unlock your organization's creativity:
Are you assuming your company isn’t creative? Maybe you haven’t engaged the most creative thinkers. Or maybe you should add external innovators to brainstorming sessions.
Are you enforcing overly restrictive assumptions? Focusing on maintaining what you have can prevent discovering something better for the future.
Are you “following the rules” too closely? Too many ground rules stifle brainstorming. Start with the notion that “any idea is a good idea” and resist killing a suggestion before it’s adequately considered.
Are you being too serious? Find a new place to think. Or convene a brainstorming group and tell them the craziest ideas will be rewarded, regardless of how impractical.
Are you afraid of being wrong or looking bad? Realize that being vulnerable with your team encourages them to stop filtering their ideas, and it releases their creativity by giving permission to be wrong.
Are you landing on a solution too soon? We can be so anxious to get resolution that we prevent ourselves from generating better alternatives.
Derived from “8 Blocks to Creative Thinking” TCM
When non-tech company leaders “think different” about their purpose and direction, they often discover novel ways to accelerate business. Key to their ability to deliver change is implementing a more flexible technology infrastructure to make it practical to test alternative offerings easily.
The future belongs to a very different kind of person with a very different kind of mind — creators and empathizers, pattern recognizers, and meaning makers.
Daniel Pink in A Whole New Mind
Principle 2:
Focus on User Experience.
An experience occurs when a company intentionally uses services as the stage, and goods as props, to engage individual customers in a way that creates a memorable event. Commodities are fungible, goods tangible, services intangible, and experiences memorable.
“Welcome to the Experience Economy”
B. Joseph Pine II and James H. Gilmore
Harvard Business Review, 1998
Traditionally businesses focused on improving the goods and services they deliver. A prescient 1998 HBR article challenged that approach, arguing that pursuing the “Progression of Economic Value” (see graph below) can refocus management in ways that significantly differentiate the business and maximize its market value. While a traditional view of business encourages a commodity mindset that constrains value, delivering memorable customer experiences leads to extraordinary levels of customer loyalty, and that ultimately results in exceptional market value.
This vastly different understanding of value eventually birthed an entirely new discipline called “user experience design” (UXD) that guides successful technology companies. Shifting a non-tech company's customer interactions onto digital platforms increases their control over user experiences, and it expands their focus beyond improving products and services. They can begin delivering more satisfying user experiences, thereby building stronger customer relationships - two powerful growth accelerators.
We are living in an experiential economy where people don’t just buy products or services—people buy experiences, and they vote for good experiences with their dollar.
Andrew Kucheriavy, Intechnic in Forbes
Principle 3:
Know When to Partner or Acquire.
Most new software is cloud-based, since cloud technologies enable rapid creation and deployment of software. Transforming a non-tech company involves automating existing and new business processes using cloud-based solutions. The company becomes nimbler, but so do its most advanced competitors who pursue the same strategy. As the pace of competitive challenges increases, learning additional effective responses becomes critical.
In the tech world, strategic partnering is well-understood. A well-executed partnership can accelerate growth at a pace otherwise unattainable. Creating a successful partnership requires learning when and how to partner, and the most successful examples are "self-fueling."
A self-fueling partnership is structured so that positive results for the first party drives it to act in ways that increase positive results for the second party, and vice versa.
“Self-Fueling Partnerships,” TexasCEO
Suppose your company faces a high-impact threat or opportunity that falls into your “sweet spot” (see diagram below). The right response is to attack aggressively with your existing competitive offerings. If on the other hand your ability to respond is weak, then taking a long time to develop something new could enable a competitor to forge a lead too big to overcome. Exploring a partnership now becomes a rational alternative to a totally in-house solution.
“Self-Fueling Partnerships,” TexasCEO
Start by locating a partner with the assets you need. Then, learn enough about the partner to identify how you can deliver them significant value in exchange. Finally, structure a relationship that encourages mutually beneficial escalation of actions that benefit both partners.
Because partnerships that fail due to poor execution are highlighted in news stories, most competitors fail to consider partnering as a strategic option. Learning how to build self-fueling partnerships thus enables your company to move past competitors in addressing emerging market challenges.
The Partnership Pyramid
As the partnership pyramid above depicts, acquisitions represent the highest cost and highest risk form of strategic partnering. That said, when a partnership would leave open the possibility for a competitor to acquire the assets you need, evaluate an acquisition instead.
Acquisitions require greater commitment and incur more risk than partnering, yet they may offer a superior response to a high-impact business challenge. In most cases, partnering will be the right solution. In others, though, an acquisition may provide a much stronger response.
Principle 4:
Experiment Often.
It’s not just tech companies who can use large-scale experiments to test new products and innovations.
Jeff Fossett, Duncan Gilchrist, and Michael Luca in
“Using Experiments to Launch New Products,” HBR
Technology companies have learned to experiment often. Testing alternative solutions using relatively low-cost cloud technologies can result in quickly finding a new path, while a failed test is simply viewed as another opportunity to learn.
Non-tech organizations may see such openness to failure as impractical, since the required investment of time and money can be far higher. A digitally transformed non-tech company, i.e. one that has already incorporated relatively low-cost software processes, becomes freer to experiment in situations where that previously was infeasible.
Big Tech startups result in more failures, but we typically only see the successful ventures. From this, I think non-tech industries can learn to embrace failure and keep trying new things, with some of them working out and pushing their industries forward.
Marty Puranik, Atlantic.Net, Inc. in Forbes
The Bottom Line:
Work Faster.
Tech companies have learned to make decisions quickly, and maybe more importantly, to unmake those decisions instantly if they are mistakes.
J. Tyler Rohrer, Liquidware
The torrid pace of technological change forces tech companies to continually accelerate their responses to the needs of customers and prospects . Non-tech companies on a digital transformation journey will face similar pressure.
Customers are heavily influenced by the pace of online interaction and mobile apps. The “need for speed” is deeply ingrained in all of us. We don’t care if delivering new capabilities is very complex for vendors; our attitude is “if I can think it, they should be able to offer it – now.”
Delivering enhanced user experiences is no longer advanced – it’s the minimum that users expect. Digital processes give customers what they want faster and with less hassle than manual processes, and it often helps your staff be more efficient as well. A simple change like allowing customers 24/7 online access to update personal information gives customer-facing staff more cycles to provide personal service and create better user experiences.
Meeting the challenge of digital transformation requires (1) thinking more creatively, (2) focusing on improved user experiences, (3) knowing when and how to partner and acquire, and (4) becoming nimble at experimenting with new ways to execute.
Digital transformation is truly revolutionizing every aspect of business, from the back to the front office and from sales and marketing to customer service and experience.
Frank Fauzi, CEO of IntelePeer
Bob Barker helps leaders and teams develop innovative solutions to critical challenges. His experience in innovating – strategic marketing, product management, partnerships, and acquisitions – helps guide clients to creative answers to the most difficult problems.
Bob has been interviewed by the Wall Street Journal and Forbes. He has written for leading business publications, including Directorship (National Association of Corporate Directors), Westlaw Journal, TexasCEO, and Information Management.