by Dave Aron | March 4, 2013 | Comments Off on Getting Deep On Digital
I just got back from a two week detox. On detox programs you have a lot of time on your hands, and you don’t feel too keen to enter the outside samsara of food, drinks and merriment. Trapped in my austere little beach hut, I did a lot of reading and writing, and reflected on what I have found most interesting and disruptive in the last year. Two things stood out for me:
1. On a positive note, the digital opportunity for win-win. It is quite easy to view the increasingly digital context we operate in as just another aspect of context that we have to deal with (along with macroeconomics, politics, law and regulation, competition etc.) A second perspective is to view digital as a new competitive space, a battle to be won, both in terms of beating competitors, and in terms of getting more profit out of customers. Whilst both of those views are accurate and useful, what is most exciting is digital win-win, where new digital capabilities allow an outcome to be reached that is better for all participants than was previously possible. For example, car insurance that is more accurately priced based on monitoring customer behaviours in a more granular fashion – potentially a win for the customer (cheaper prices), the insurer (higher quality risks), and society (more responsible behaviours). Or alternatively, ‘servicization’, where products are sold as services, serving a higher level need – e.g. I don’t sell you ball bearings for a fixed price, I get rewarded for a service that improves your factory equipment performance (e.g. SKF’s reliability business). Bounty-based crowdsourced markets (such as Topcoder for software, 99designs for design, Innocentive for ideas, Threadless for t-shirts) can also unlock previously unreachable value. I may never have otherwise found the freelance designer in Eastern Europe who can design amazing graphics the way I like for a great price, but a crowdsourced competition can bring us together. Digital can be used to unlock what economists would call ‘deadweight losses’ – sub-optimal equilibria we get stuck in. The overarching exciting concept here is digital win-win. Are there opportunities for your company to unlock some digital win-win opportunities?
2. On a slightly more challenging note, I considered the lack of digital (re)specialization at an industry and national level. This may be overly simplistic, but I see the vast majority of countries and companies thinking of digital as a new commodity – where they must play catch up – rather than a new way of expressing their unique meaning/ mission/ message for success and advantage. So many national approaches to digital seem to read very similarly to me – about digital first, digital by default etc. And many company approaches to digital seem to be about making things available electronically, allowing customers, employees and others to do things digitally. This is all well and good, but there are at least two levels of thinking that would be nice to see on top of that. First is how to do things differently with digital. It is not just about doing the same stuff more efficiently/ effectively/ more accessibly, it is about being prepared to do things deeply differently recognizing digital realities. Friendsurance, whose co-founder Sebastian Herfurth will be on stage with me at Gartner’s EMEA CIO Leadership Forum next week, is a great example of this. Second is what will make your country/ agency/ business uniquely different in a digital context. We have seen countries take specific roles in the global economy for periods in the past, but how about in the digital future? Similarly for companies, it feels more of a digital me-too/ catchup game for most. I fear that few are thinking about digital (re)specialization, how will we use digital to amplify our differences/ create new differences. If we can think more like that, we will have a much more productive global economy based on ideas of comparative advantage, rather than a zero-sum game digital future.
I am hoping that Chief Digital Officers, CIOs and all other C-level leaders taking digital leadership roles in companies, public sector agencies and countries will be thinking about digital win-win and digital specialization in 2013 and beyond.
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