Digital technology is on the mind of every executive from
Sales and Marketing to IT and Operations.
Executives concentrate many of
these thoughts center around issues of responsibility, authority and budget rather
than looking at what is possible, profitable and the other potentials of
digital technology. It is a narrow
mindset driven by the language of finance rather than the logic of value.
So how should people
‘think digitally’?
Not the way they have thought about IT and other technology.
Executives think about
IT as sterile
IT technology is sterile as executives view it. Sterile in the medical sense as it describes
a state where no bad things exist. Executives
and CIOs apply IT and corporate technologies to sterilize their
operations. Sterilizing a business
involves killing off things like cost, variance, duplication, and inefficiency
to make the company safer for shareholders and support customers in the
marketplace.
Removing problems, like removing germs, is a way of thinking
about technology that drives strategies based on automation, integration and
consolidation. These strategies assume
that it is possible to create value via
subtraction.
Getting better by getting rid of bad things makes sense in a
financial way of thinking. If you have a
bundle of good and bad things, you can increase the value by removing the bad
things. In an accounting sense the
logic is right. Innovations that support elimination are welcome and quickly
climb the corporate adoption curve.
These have been the three letter ‘management’ systems like CRM, ERP,
SCM, etc.
The only problem is that in a world where Supply > Demand, doing fewer things wrong is no guarantee that you are doing anything right. Customers choosing your products, services or brand because you make fewer errors, or are generically better will easily move to someone who ‘sucks less’ than you do. You can do the ‘not wrong’ things, think of major retailers but still lose out to the Amazon’s of the world.
Your only response is to invest in a race to the mundane bottom
of generic, dependable, repeatable processes that deliver consumer utility that
is about as exciting as many see corporate IT today. A death driven by PC-Beige, process consistent
mediocrity of trying to just be better than everyone else.
If executives apply the same mental models to digital
technology (DT) as they have to information technology (IT), then we will all
miss a tremendous opportunity. Because digital technology is generative, but
only if thinking digitally means thinking about how to create good things
rather than just remove bad things.
Digital Technology is
Generative
Jonathan Zittrain, one of the better thinkers about the
digital world captures the ethos of thinking about technology as
generative. Generative in the sense that
solutions build from the bottom up, gets better the more you have, etc.
Technology creates generative value by creating combinations
that expand the range of possible solutions.
Look at smart phones and the combinations it has created from
location-based services to apps to remote sensing etc. Generative sources of value that expand the
value pool and encourage further investment to create even more value.
Generative thinkers concentrate first on creating things,
combining them, realizing new positive goals before they think about
consolidation, streamlining and scale efficiencies. Generative thinkers are not Pollyannaish;
they know that creating often involves destroying and introducing new
‘problems’ into the system. But they are
not hung up on what can go wrong, so much as they recognize the potential to
expand, grow and build new sources of value. I am not talking about just
creating ‘ecosystems’ but in creating truly new and innovative solutions, where
the value created outweighs the bad things it introduces.
The future is all in
how you think about digital technology
Digital technologies like mobile, big data, analytics,
social and cloud are neutral technologies.
They are neither good nor bad.
They remain neutral until you start to think about how to apply them,
then they take on relative values.
It is possible to see emerging digital technologies as new
ways to sterilize the world. That is the
essence behind predictive analytics for example and the notion of preventing
crime in the movies. It is a way of
thinking about digital technology as a substitute for today’s IT
technologies. Digital substitution is a
strategy of decanting old strategies and encasing them in new digital
bottles. It's a viable strategy, but
probably not desirable if you want to move the organization forward.
Rather than thinking of using new technology to remove old
errors, problems and inefficiencies, innovators think about all the new opportunities
these technologies create. Opportunities
to democratize the organization, drive engagement of customers and associates
alike, raise human ability, influence human behavior, etc. There is a world of possibility out there,
much bigger than the Internet as a channel, if only we open our minds to that
possibility and realize that the other way to create value is by adding more
than you take away.
Excellant blog. I look forward to reading more.
ReplyDeleteGood luck !
Awesome! I couldn't agree more with your comments especially, "Digital technologies like mobile, big data, analytics, social and cloud are neutral technologies. They are neither good nor bad. They remain neutral until you start to think about how to apply them, then they take on relative values." And, "There is a world of possibility out there, much bigger than the Internet as a channel, if only we open our minds to that possibility and realize that the other way to create value is by adding more than you take away."
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