One of the most famous business failures of this century is the story of Blockbuster Video.
At its height in 2004, the company comprised a global network of nearly 10,000 stores. By 2013, however, competition from digital streaming and changes in the delivery of cable television services had rendered Blockbuster's business model obsolete.
Blockbuster eventually closed its remaining 300 stores. Today, almost as a museum piece, there is one Blockbuster store still trading, in an obscure town in Oregon.
All this has been well documented. But according to Chris Willis, it is not as if Blockbuster did not know that it was going to be disrupted.
Willis, who is now the chief design officer at Domo, saw this first hand. He was part of a small team that advised Blockbuster on a survival strategy.
"They didn't go out of business because they didn't think about digital transformation. They thought about it all the time," Willis told a Domo event in Sydney last week.
"They just couldn't do anything about it. We showed them the Netflix model and things like streaming video, but they still couldn't get around it."
First Comes Why, Not How
The Blockbuster example, said Willis, provides the first lesson of digital transformation. It is not what an organization does, but their approach to the big existential question of "why."
As they approach any transformation, said Willis, corporates need to understand who they are, why they are in business and why they even exist.
For some companies, this is a liberating opportunity for re-invention. For others – like Blockbuster – it is an existential crisis from which they will never recover.
DX Is Not Digitization Only
Another lesson, said Willis, is to understand that digital transformation is "not about digitizing stuff."
"We've been talking and asking about digital transformation for years," he told the Sydney audience.
"The question hasn't changed, but the answer has. It's about potentially evolving into something new, but it's not about the technology, strictly. It is about re-inventing your business as a new kind of business or businesses."
Using technology to improve the customer experience was a positive move. But it did not qualify as transformative unless it was part of a change which touched the whole organization.
"The technology we are dealing with today, such as blockchain, 3D printing, and AI, are ones which are not just disrupting one area of our lives, or our science of business," said Willis.
"These are technologies which actually create new kinds of disruption, and branch out in a way that other technologies have not done before."
Stages of Transformation
Willis went on to describe the journey organizations took as they transformed through the stages of Domo's quadrant, which moves from frozen to failing to "flashing" to flying.
The first step for many of those companies who were "frozen" in their approach was to simply "turn the lights on" through small projects which could deliver quick wins, inspire some confidence, and start momentum for change.
He described the case of a Fortune 500 company, and a Domo client, which was spending upwards of 2,000 hours a year for the HR team to write leads from whiteboards, into Excel, and then into a database.
With digital tools, this process could be achieved in minutes.
Another common scenario were organizations which were concurrently running siloed systems. If these systems were aligned, they could deliver fresh insights.
"So, if you have Salesforce in one system and expenses in another system, wouldn't it be nice to know who is the most effective salesperson when it comes to entertaining clients?" Willis asked.
"But you would never know if those systems are separate. Putting these systems together can be the first step in turning the lights on. Once that happens, you are going to see a lot of other things to fix."
Another Domo client is a large U.S. home security company with a big door-to-door salesforce. The company had a complex system of offers and loyalty discounts. It was so complicated that people in the field had no idea how their sales were impacting their own remuneration or the company's bottom line.
A simple mobile app that the sales force could download addressed this issue. It had brought the company back into alignment with itself.
"There was a gap between core information and an outcome, and there was no way to connect those two," said Willis.
"That is where problems happen, and traditionally, it is micromanagement which fills the gap."
DX Is Discovered and Not Planned
Robot vacuum company Shark Ninja is another company using Domo's platform. It leverages 20 billion rows for data sent in real-time from several hundred thousand robot vacuum cleaners in homes and offices through the U.S.
Before using Domo, the data analysts at Shark Ninja were spending a week looking at data from 20 remote machines. Now, they can analyze more in-depth data from the whole fleet, giving them information on reliability, performance, and usage. It goes into creating better products and customer service.
One of the lessons from all these examples, said Willis in conclusion, is that digital transformation was "discovered and not planned for."
Even in the most significant examples, success had come not from focusing on performance. Instead, it came from "making the most of what you learn."
"Start simple, whoever you are, and know that you are buying information for the future," said Willis.