Lots of companies have jumped on the digital transformation bandwagon. Top executives have high hopes that agile sprints lead by scrum masters working with Office365, Trello, Jira and Skype will blast their company to be the digital leader of their industry. The bad news is they will fail. It is not because teams use cloud and AI, make beautiful user experiences and follow all the digital transformation rules that you will not be disrupted by innovation. The reason is that you are building a digital blockbuster, not the next Netflix.
Let look at different industries that are being disrupted as we speak:
We are seeing two disruptions happening in automotive. Diesel cars have fallen out of favour for electric vehicles. Cars become autonomously driven. You can setup agile teams to design an electric vehicles fleet and production capabilities. You can even create a world class AI team or buy a startup to create autonomous cars. But digital transformation will not give you the answer to a more fundamental question. What will happen when autonomous cars are offered on a subscription service at rates multiple times cheaper than owning a car? What will happen if the Netflix of cars enters my market?
How will sprints, AI and Office365 help you fight a company that came out of nowhere and is now beating you in creating reusable rockets that soon will fly tourists to the moon and beyond?
The whole industry has their future pinned on 5G but has no clue where new revenues will come from. Last time Apple and Google saved them. This time Facebook is making cheaper base stations and open source mobile network management solutions. Do you really believe they are doing this to please their followers? Or might it be that Facebook with TIP, SpaceX with Starlink and lots of others are aiming to become the next disruptive telecom network operators? What is your next sprint going to do about it? Talk to the automotive executives about supporting 5G in their cars [please reread the passage about automotive if that is your answer].
In a sprint somebody decided what if we multiply the price of a patented medicine by a 100, can we generate a 100 times more profit? The answer was yes, but for a very short time. The actual answer is that many countries are now looking for a Netflix alternative in which they pay a subscription and can now have unlimited medicines. What is the next sprint looking like if medicines are sold 10 times cheaper than before?
Can a mobile app only bank become the best UK bank voted by customers and raise £20M investment of its customers in under 4 hours? What is your next sprint going to do about it? Copy their features slower than they launch new ones?
Lots of industries have innovation challenges and their top executives are made to be believe that the wonderful world of cloud, AI, sprints, scrum masters and Office365 will solve them. Digital transformation is a hygiene factor to catch-up with the rest but it will never give you an edge. You need real innovation for that...
Maarten Ectors is a strategic innovator who exchanged working with the who is who of high tech to apply disruptive technology and business innovation from the inside in the top UK insurance and investment management company. In less than a year they won the best claim technology solution of the year award and that is just the start...