April 25th 2016. Digital cameras displaced Kodak from its photographic pedestal to the point of forcing it to file for bankruptcy three years ago. The American brand had time to react and refocus its business away from selling photographic film, but did not do so and has therefore become an example of not knowing how to adapt a business to changing times.
The ‘Kodak case’ is not unique. In the last years, technological evolution has blurred the barrier between industries and affected all sectors, so that its actors have been forced to innovate or even reinvent themselves in order to stay in the game.
Recent research by McKinsey states that during the last three years–curiously the number of years since Kodak’s bankruptcy–companies have assimilated the competitive role that digital transformation can play in their business.
Most of the CEOs surveyed in the study cite client engagement and innovation in products and processes, focusing particularly on automatization or reduction of costs, among the primary objectives of their digital strategy.
It therefore seems quite clear that a company’s digital strategy is increasingly important in the agenda of top management professionals, and these are some of their foremost priorities:
Support for digital initiatives. 52% of the CEOs surveyed by McKinsey support the transition to a digital ecosystem, against 23% only three years ago. This is irrefutable proof that a new technological environment has been established, from which there is no turning back.
Quicker action. With an extremely changing scenario, more demanding clients and less brand loyalty, CEOs prioritize a continuous reformulation of products in order to adapt to the market.
Measure and accept errors. Innovation involves greater tolerance for failure, but the probabilities of error can be reduced. CEOs are increasingly predisposed to monitoring all their actions. They also have less fear of pushing new proposals or putting them in the drawer if they don’t work, aware as they are that a timely retreat can be a victory, and an error the seed for a great success in the future.
Make your best people digital, where there are new opportunities and greater talent is needed. This does not always require new investment, sometimes investing in training or relocating teams is enough.
More and more companies recognize that digital transformation is unstoppable. According to McKinsey, companies are aware of the fact that technological evolution has created new business niches and new consumer habits.
How can these be explored? By getting to know our clients and their needs better, and appealing to talent in order to find new opportunities.
In this sense, our solution in the cloud has allowed Mutua Madrileña to open up to ideas crowdsourcing with their clients, and companies like Banco Santander or Nestlé to create an internal ideas community to attract talent and reinvent their business.