Don’t be fooled by the term “digital transformation.” The profound changes that business leaders live with day in and day out are made possible by digital technology. But just as important are the surprising and unexpected ways that people interact with technology. Recognizing that provides clarity and focus, and highlights the need to get technologists and experts with deep customer empathy in the same room, working on the same problems. Digital transformation is technology and people, innovation and disruption, offense and defense in equal measures.
Look, for example, at the rapid global spread of ride hailing. Digital technology made it possible for Uber and Didi Chuxing to match riders with drivers efficiently, inexpensively and on a massive scale. But it was customers’ embrace of the service, their willingness to jump into the cars of total strangers, that enabled those companies to redefine transportation. Similarly, Airbnb wouldn’t have been valued at $31 billion just nine years after its founding if customers hadn’t quickly become comfortable sleeping in someone else’s bed. In retail, the willingness of consumers to trust the product reviews of 1,000 online strangers, and write paragraphs of detailed description of their own, moved e-commerce from a digitized catalog to a true substitute for the trusted shop owner.
For business leaders, part of the challenge lies in the fact that the 10 to 15 major enabling technologies are very different from one another—Internet of Things, artificial intelligence, augmented reality, each has different applications and impact across different sectors of the economy. That adds complexity and fuels some of the frustration at the top of companies. It also creates real risks of many false starts and half measures chasing after “disruption,” especially because there’s no comprehensive playbook for building a digital enterprise.
