There are many things a company must tackle to execute a true and successful Digital Transformation. It takes time, money, and maybe the most difficult part, a new mindset.
As I have discussed in the previous two posts, a Digital Transformation requires hard work, but it isn’t as mysterious as many have made it out to be. I’m wrapping up this series with a discussion on the mindset necessary to move forward with your company’s Digital Transformation.
Our business nature, for years, has been to keep as much as possible secret from anyone outside the company. This has led to a business mindset of siloes within the company. Frankly, the consulting field has somewhat contributed to this by mystifying certain principles and terminology targeted at specific areas of discipline. For example, we hear about “Lean Manufacturing” regularly, but how often do you hear about “Lean Accounting”? The principles of Lean are universal.
The process of true Digital Transformation, which can also be called creating a Platform Strategy, requires the opposite mindset.
A Platform Strategy is a corporate strategy (and mindset) where a single version of truth related to transactions is trusted among all parties involved.
It is more than new technology.
It requires a commitment not only to modern technology but also to a never-ending pursuit of continuous improvement within the entire organization. Constituents are trusted with information because they are all viewed as valuable assets in the process and pursuit of perfection. When the company fosters a culture to recognize the individual and group value, they make a major move in the right direction to this platform strategy.
The idea of Platform Strategy was not conceived yesterday. In fact, there are many analysts in the investment world who target companies that have adopted the philosophy and the initiatives to embrace it. One such group created their own index fund made up of companies who had a Platform Strategy (or a Digital Transformation). These companies have been outperforming other companies in their industry sectors by almost 2 to 1 over the last 10 years.
I won’t go so far as to state, as others have, that any companies not adopting such a strategy will cease to exist. There are old-fashioned, poorly run, and poorly automated companies that will continue to exist despite themselves. However, I do believe the following about the future of business:
- Progressive companies will grow by deploying strategies that create more and more visibility within their companies.
- Good companies will make the transformation and trust their systems, data, and people to participate in making their customers loyal through the pursuit of perfection.
- The truly great companies will trust their systems and people so much, that they will create transparency not only within their companies but externally to their customers and their supply chain.
There are many companies already who have become truly great by creating internal visibility to their vendors, employees, and customers. I hesitate to name them because the initial reaction is to fall into the comparison trap and say, “But they aren’t like us!” What I would rather do is challenge business leaders to imagine how such a strategy might propel their company beyond their competition. These companies not only believe that their employees can help improve the company, they believe that providing data to vendors can help solve material availability issues and reduce inventories. They trust customers with data about production and delivery schedules because they have learned that customers can plan around knowing in advance what delivery hiccups might occur. Everyday companies are learning the advantages of sharing both their strengths and weaknesses across their entire ecosystem. A truly transformed company looks like the following: the walls between departments are hard to distinguish, the stars of the show are the transactions flowing through the company, and visibility is no longer feared because there is trust in the data.
This should be the goal of Digital Transformation. Hundreds of companies (and their customers) have already achieved this outcome and these benefits. Thousands are in the middle of the pursuit. So my question to leave you with is where is your company? How could your company become great? How could a Platform Strategy (Digital Transformation) allow you to outperform your competition by 100%?