If we now have everything at our fingertips, why are all businesses not transforming with the changing world? That is because reimagining a business in a digital world is easier said than done. In his book, 'Driving Digital Strategy', Sunil Gupta, Edward W Carter Professor of Business Administration at Harvard Business School delves on the necessity of this transformation. During his recent visit, he talked to Outlook Business about how some organisations have embraced the new world, while the others seem to be waiting for a miracle.
Can you outline how most companies today handle digital disruption?
Companies are dealing with digital disruption in three different ways. First, they are using technology to cut costs and improve efficiencies. For instance, a bank may just decide to cut costs, but it will become the most irrelevant bank in the future if it does not apply technology. After all, Amazon is doing digital payments and Alibaba is doing wealth management. So, efficiency is good but not sufficient.
Then, there are the companies who know what digital can do, but they will not do more than just a little experimenting. Suddenly, everyone in a large company is experimenting and you have hundreds of experiments, which don’t add up to anything. Without any strategic theme, they only become tactical.
Finally, there is an example like Telefonica. A large company of that size has an issue with doing radical things and creates a separate unit. They put money into a new project, send people to different locations, but that won’t work. The reason is that large companies are like large ships. You are looking to launch a speedboat and that takes off, but nothing happens to the ship.
Now, look at the successful companies who make it. They transform the core itself and do not look at the digital change as a side activity. People are scared of disruption with instances of Kodak, Blackberry and Nokia staring them in the face. Companies have to contend with a lack of vision, where they say, “I don’t know what to do” or “How much will that investment in technology eat into my profit?”
The New York Times decided to move to the digital world when they saw that physical newspapers will not exist in the next 10-15 years. They were ready for the challenge of running two organisations – print and digital – with the conviction that profit will g