by Mark P. McDonald | May 14, 2013 | Comments Off
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.
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