Why are technology companies able to move into traditional businesses with seemingly unbridled success, while traditional companies are unable to move online with similar prowess?
It’s too easy to think that it’s easier for smart technology people to learn, for example, bookselling, than for smart booksellers to learn technology. Leaving at this is a cop-out… why is it easier to move in one direction than the other?
I believe there’s something more fundamental going on. There’s a more fundamental challenge to maximizing technology’s impact on a business that has to do with mindset.
Change your mindset, change your outcomes
Mindset is a good word because it’s used in this way elsewhere, in particular sports. Two athletes of similar skill levels will be differentiated by their mindset. By the mental game. We often hear that high level athletic competitions are mind games, why can’t high level ‘business competitions’ be mind games too?
I’ve been thinking about this a lot, especially as it pertains to enterprise mobile development. Why is Amazon beating traditional retail so badly? Why has Amazon (or Apple) been able to have such good brick-and-mortar success?
I think the answer is a simple soundbite:
Traditional companies struggle to compete because their mindset is that technology is ‘just another channel’ while technology companies have the mindset that technology is foundational. One might even say that technology companies don’t even notice the technology, because of course it’s everywhere.
If you think about technology as an ‘omnichannel problem’ you’re going to optimize in ways that make it tricky to take best advantage of technology (because the technology is a peer to the process, not foundational to it).
This is a different way of expressing my definition of digital transformation (which has already faded from most conversations, though the challenges presented by digital transformation still remain):
Digital transformation is a transformation from ‘access’ to ‘experience’ Click To Tweet
Digital transformation is a transformation from ‘access’ to ‘experience’.
You have to choose
I heard from someone yesterday who shared a quote attributed to Marc Benioff (CEO Salesforce.com / $CRM):
You can either be a cloud [software] company or an on-premise [software] company. You can’t be both.
The simplest reason being that on-premise companies simply manage to different metrics than cloud companies, and the metrics used (for incentives) are not compatible between the two. Of course, it’s more complicated than that, but sometimes a soundbite helps to focus a team to help them change.
Similarly, a company can’t think of technology both as ‘just another channel’ and ‘foundational’. When it’s foundational, you make different assumptions and decisions… you use different metrics to drive technology use in the business, than you would if you were just thinking of a channel. In fact, I’m thinking that this idea ties very closely into the approach I have to how data is used and what the incentives are around data in the organization.
Companies that think of data as an asset are going to be able to do things, and are going to make very different decisions ‘behind the scenes’ from companies who view data as a side-effect of building a solution to a problem.
If you think of technology as a channel, one channel of many through which your customers experience your brand, you’re not going to be as successful as a company who builds a technology foundation on which customer-experiences (that cut across channels invisibly to the customer) are created.
If you’re interested in the idea of ‘mindset’ and improving your performance (or your organization’s) you might be interested in two books that I’ve enjoyed: