People… exploring the heart of digital transformation
As a kid, my favourite possession was an old VHS copy of Star Wars that I’d play back-to-back every Saturday for as long as I could get away with. Truth be told, it was the only video I owned at the time. But when DVD arrived with its higher quality, better usability, and easier distribution, video rental stores multiplied, and my once restricted choice of Star Wars turned into a world of choices (unless they were already rented out).
But where are all those video rental stores now?
Undergoing extinction. They failed to think digital. They were physical businesses thinking in the physical world, and couldn’t see beyond their product to what their customers really wanted and how best to give it to them. They never truly thought digital.
Starting as a physical business, Netflix used the Internet to enable its customers to rent DVDs and then delivered them to their door. But it didn’t stay physical. It asked the questions at the heart of every digital business; what do our customers really want, and how can digital technology deliver it. In 2007, it opened up its streaming service and the world changed. Membership rose exponentially. Stocks in Netflix increased ten-fold. Netflix video streaming now accounts for around 30% of a country’s Internet use.
But Netflix didn’t stop with wiping out the video rental industry.
It kept thinking digital. It knew what content people searched for and what they actually watched - the types of storylines, characters, and actors. And it used that information to deliver its own original programming, targeted specifically at its customers. No movie studio, production company, or television network has ever had that level of information or insight.
Could Netflix now be poised to wipe out traditional television networks, and eventually the movie industry itself?
But the technology Netflix uses is not the reason for its success. Plenty of other businesses had that exact same technology, at the same time, with the same opportunity. The difference is that Netflix understood how to be a digital business.
Being a digital business is not about using technology to create a better product or service.
Being a digital business is about creating better outcomes for people by using technology.
Digital technology enables businesses to connect with, understand, and deliver real value to their customers more easily and effectively than ever before. And although the digital component that enables these conversations, insights, and delivery is important, far more critical is the human factor.
- How well do you understand your customers?
- What do they need right now?
- What will they need tomorrow?
- How do your products and services fit into their world?
- And how can you increase your importance in their daily lives?
Fundamentally, how can you continually improve their lives by using digital technology to better understand them and deliver products and services that become indispensable.
It’s no longer enough to just have a digital strategy. You need to have a digital business.