Every organization is tasked with a decision to either innovate or go extinct. Because technology grows exponentially, advancements consistently serve as a driving force in the evolution of traditional business models. In most cases, it does not matter if the business is digital or 3rd generation brick and mortar shop.
Unsurprisingly, it’s the organizations that effectively make this change that can anticipate better long-term performances – or even outlast competitors during the digital age.
But like most types of organizational change, digital transformation can’t be performed without meeting some challenges. An Everest group study revealed that 73% of enterprises failed to provide any business value from their digital transformation efforts. Primarily, as a result of the divide between adoption and scalability of the technology, but also because of disagreement on goals between leadership, according to Harvard Business Review.
Digital Transformation, not only during Global Pandemic
The coronavirus pandemic wasn’t just one of the fundamental driving forces in dramatically transforming how businesses and society operate. It was THE accelerator and driving force for some, and sadly, a purger for others.
Amid the coronavirus pandemic, individuals and companies alike adopted unfamiliar ways of functioning to maintain their effectiveness and protect the bottom line – like telecommuting. With more and more companies relying on applications such as Zoom and Google Hangout to stay digitally connected with their employees and customers, pivots like these have proven to be crucial for companies that want to survive. For example, at Metric International, long before Covid-19, we implemented a “Work From Anywhere” policy that enabled our team members to work from any location around the world. Not only has this kept our team safe from the uncertainty of Covid-19, but it did not impact our productivity or expenses on office spend (we don’t have any), that could be invested elsewhere.
Of course, work from home practices are only one tool in a kit of many for successful digital transformation examples. Below, find the example of Netflix, a company that has successfully implemented digital changes in their traditional business models to remain competitive digitally. Then an example of a family business.
Netflix – Digital transformation in the tech & entertainment Industry
It may be hard to believe, but there was a time when Netflix was not a household name.
Netflix’s original business model when it was founded in 1997 was a pay-per-rental model which included DVD sales and rent-by-mail. It was not until 2007 that Netflix completely disrupted how people consume media at home. Netflix’s ability to leverage digital transformation to innovate its business model is exactly what saved it from extinction – and wiped Blockbuster out of existence.
In 2007, Netflix launched a Video-on-Demand streaming service to supplement their DVD rental service at no additional cost to their subscriber base. To date, Netflix is the most popular digital video content provider, with other tech heavyweights such as Amazon, Hulu, and Youtube trailing behind in demand.
Not all can flip the entire business model
Let’s get down to earth, not all companies are corporations and have millions to invest in business transformation. Taking as example our customer, Fundido Universal, a metal foundry company established near Guadalajara, Mexico in 1959. In 2nd, almost 3rd generation of family management, they have been covering the national market for decades. Several years ago, hit by the industry’s pricing crisis, competition overseas and national economic difficulties, the company has got into a serious dilemma; Do what everybody else is doing: lower prices, extend payment terms, reduce expenses and “see who survives” or to innovate and go against the current.
Innovate or close
As you might have guessed by now, they chose to innovate. But how does a family business innovate, where any piece of equipment is a substantial investment of hundreds of thousands of dollars? Someone once told me, “if you don’t have what you’d love, love what you have”. They have decided to use what they had at their disposal, by innovating their sales process, training the staff, investing into marketing and their digital presence. Then, they took it to the international market, where most of their national competitors never set foot. By outgrowing their competition, and increasing sales, eventually Fundido Universal was able to make investments in their company, even an Induction Furnace, establishing them in the top 10 in Mexico.
As strategic partners, we did not only create Fundido Universal’s digital presence, but also trained their sales staff, advised the board, accompanied them to trade shows with sales scripts and CRM app in hand. A digital transformation journey is not only digital, it’s a 360º task that encompasses many aspects of the company’s functioning. Remember, a journey of a 1000 miles starts with a first step, and continues step-by-step.
Businesses in nearly all industries are undergoing enormous amounts of pressure due to the exponential adoption of technology, not only due to the ongoing global pandemic. As organizational leaders march forward into a landscape that fully embraces the latest technology, it’s important to remember that meeting digital challenges is not a question of if, but when. By looking at these examples, it’s clear that digital innovation and transformation were key to sustaining the business. Digital transformation can be a daunting journey, but if met with the right strategy and fearless open-mindedness, it can mean the difference between whether an organization dies or thrives.