For our purposes, we will define digital as a confluence of existing and emerging digital technologies which have a transformative impact on how a company designs, manufactures, distributes, and markets its products; how it engages with its customers; and how it manages its people.
Digital has become so prominent in business today due to the convergence of a number of distinct but related advances in digital technology and the sharp decline in their cost. These advances include the spread of high-speed internet; the penetration of cheap smartphones; the falling cost of sensors; the widespread use of digital and social media; access to cloud computing; and dramatic leaps in artificial intelligence and machine learning.
So how should business leaders think about digital?
From our experience working with companies across industries on the digital agenda, we have identified three aspects of how leaders think about digital that is holding them back.
Digital should be at the core, not the periphery
The first misconception about digital is that it is something occurring at the periphery of your business, leaving your strategy and business model largely untouched at the core.
We often hear how “only x% of sales in my category go through online” or that “it will take some time before things really change”.
As a result, digital is not seen as an overarching strategic priority. Instead, it is seen as something that can be put off until later, with responsibility often delegated to lower levels of the organisation or just to the IT department.
By treating digital as peripheral rather than something that strikes at the core, businesses fail to grasp the wholesale and fundamental change it is bringing about. Digital is nothing less than a revolution in the twenty-first century and its impact will be as dramatic as mechanisation, mass production and computerisation were in previous eras.