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At the beginning of the digital age, I remember as many companies looked that the digital, that the Internet as something that would not be a threat to their business model and leave him just another channel to reach consumers to try it themselves independently since those companies were governed by the famous Jewish law "know what the right hand does not know that the left" or put another way "Silos".
It turned out that the digital explosion caught them off guard and entered a race with the sole aim of survival. Just like that , they stopped investing in the traditional model and began to divert paste made digital adventures and like the TITANIC; save what you can, assuming that these units "silocianas" business probably will not survive, but disruptive digital businesses will surely replace the traditional model.
This is the reality that many companies are living today and may be in different stages of this model change.
Some even at an advanced stage with running multiple digital models and some other of these investments in Cashcow mode. But the vast majority are not finding the right way and when I say I talk way sales and profitability and the reason is simple. Well maybe not so simple...
The problem is that it is failing in the way of approaching the problem, ie has focused the problem as a channel, defined channel / is the phone, web, physical stores, etc .. and therefore these companies are spending almost all their resources to the digital channel which obviously is organized differently such as a retail chain is managed. When reality is that consumers are increasingly mixing their digital interactions with the "real" (I prefer to call them physical, as in anything with virtual reality can not live real experiences? ..), But companies are not with this in mind and therefore are giving only part of the experiential need you are asking the consumer or worse, losing the know-how of physics part to eliminate their priorities.
Example retail company
Example e-commerce
If you feel identified as one of the companies in this situation, you might want to read the 5 rules that Professor Darrel K.Rigby found and that can make the difference between failure and success.
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Rule 1. Create your strategy around merging the digital world with the physical
It is said that the famous "sustainable competitive advantage" that everyone is looking for the holy grail way, will die. Apparently the technology today changes so much and so fast that the benefits are instantly copied and therefore says that companies should learn to go to the next opportunistic fashion, although they have little relation both fashions. One of the advantages you could find (always within your "Core business") would get to look your experiential sauce , your specific trip you've created for your customers and how to merge the digital world with the physical that would be for you a way of differentiate.
Rule 2. Add links to your strengths in your customer experience
Edison invented the light bulb, but its carbon filament was nothing but an improvement of a product that already existed, the real innovation was to create a system of generation and distribution of electricity that made these bulbs work. That is worried about how I had to be the whole system as a whole, he developed a laboratory of innovation to solve the problems detected on the road to that system. The result and everyone can see it.
For digital innovation it is something similar to this case. Apparently for many years was the conviction in the physical world that any company producing sneakers, sportswear and sports equipment should be sold in specialty stores. Nike in 1996 entered the online world with a web, but without e-commerce, at least for the next three years, the year the project began NIKEiD .where you could visit nike.com and customize some of the models by changing the color or adding some custom. Nike then began to introduce digital innovation and other contact points along the customer experience.
In 2006 it develops and presents Nike + App that connects the sneakers with an iPod nano. Is now brokers can view information about distance, time, calories nano screen or listen to your headphones. After each workout you could sync your nano to your computer and see graphs of progress. You might even have some tips from a "personalized coach"
Every time we see more and better integration of products and services in the consumer experience both worlds merging the digital and physical.
Rule 3. Transform the way you have to focus on innovation
Normally the way traditional businesses have to focus on innovation is "cascade" mode. Ie people creates marketing and design ideas, build prototypes and then it happens all IT people with instructions on how they want development and expect the same digital features.
(Waterfall model)
However, we can use another way to approach the issue of merging the digital world with the real.Creating a complementary team of experts. This type of equipment will allow us to better integrate and merge any innovation project. We will put on these computers from the beginning to digital experts to cover all stages of development and innovation, this way of approaching the problem generates more amplitude innovation and integrated solutions, as the teams combined experience in the digital world with the physical world .
The new generation of leaders is hiring such experts coming from IT departments, imaginadores theme parks, marketing, functional areas, etc.
Rule 4. The separations in an organization is only an interim step
Choose between digital disruption or digital transformation is a decision that involves major consequences for any organization and structure and business model. However those consequences do not see them entry because generally successful innovators usually separate their teams revolutionary "core business".
Original equipment macintosh
This separation are those that can attract innovative talent, programmers, etc .. A team that could be called "Mavericks" or the "MACINTOSH" who will live without the rigor of the bureaucracy and its main objective is to challenge the status quo with innovative ideas. Incentive plans as obviously will not the corporate plan of the last 20 years.
But there will come a time when these companies will have to make a decision. What part left and part I stay? What destroyed or replaced? ... There are companies such as Sears has invested intensively in a separate business e-commerce. However your online business is around 2.5% of total sales.
In this case we are seeing what could be a war any internal rule between two business models fighting for power company. In some cases you win the digital in other physical. But in both cases I think both sides lose. Since Physical digital / transformation may have different objectives and therefore different models to operate.
The ultimate goal is to create the best of both worlds (digital and physical) developed that are very difficult to copy.
So in the end the separation is merely transitory, the ultimate goal is not a cannibalization between them, the ultimate goal is to know how to combine these digital and physical experiences efficiently and economies of scale. Perhaps a starting point is to see which party has the largest number of contact points on a journey buyer and be the one to lead this journey.
Rule 5. Build a DigiCal team including the CEO
If vana digital technologies change your core business, the main task of the CEO is to change the mix of the business model, not the capabilities of people. Repeat the business model. This kind of evolution seems more biological evolution of species.
The CEO will have to put the batteries with the physical part of the business in order not to let the fight run budget fair play. On the other hand a CEO would not normally have the skills and knowledge to cope with such challenges unless a digital native CEO. Therefore many companies seek help from consultants or departments such as Talent Management emerge.
THE DIGITAL FUTURE, NO DIGICAL
CEO Andy dunn bonobos said:
In 2007 we were wrong when we said that "the world will be exclusively online and everything would be done online" however.
The reality is that the offline experience as can be touch and feel a product is not going to go anywhere.
But how can we know to what extent the mix will be digital or physical of our particular cocktail? .. Do not know ... only through experimentation and have detailed maps of these experiences will allow us to understand and therefore act best.