During the previous decade of global economic growth, digital transformation has been on the agenda of every single corporation.
It is usually for defense (fearing competition from other industries; think companies like Amazon going into logistics, physical retail, financial services, healthcare, video content, etc.), for offense (some realizing that the new digital technologies could offer new competitive advantages) or simply by chance. During the high-growth economic period, everyone was too busy (and a bit too comfortable) to look beyond the surface at all those digital transformation programs which looked so well in PowerPoint.
But with the reality check brought by COVID-19, top corporate leaders and their shareholders were forced to review from fresh angles their digital transformation efforts. They had to ask themselves “Can our business continue or even survive during/after this pandemic thanks to the digital transformation investments started several years ago?”
The sad answer for a very large number of corporations is “No.” It’s a negative answer because their digital transformation agendas haven’t grown sustainable new business models and revenue channels to grab business opportunities in other verticals and operate in a different economic reality.
Instead, what many corporations have been doing is PR (Public Relations) Digital Transformation. This means that their digital transformation agendas included experiments and pilots using all the new technologies (everything from blockchain to AI, IoT to edge computing, AR/VR to RPA and so on) to impress audiences (like the shareholders), to give a sign to employees that the company is not behind the technology curve, and to stay “tech buzzword compliant.”
Such experiments were never set up to go beyond the sandbox stage or two-countries pilot, but they’ve served very well in PR (press conferences, town halls, media interviews, annual reports, etc.). Even many of the corporate innovation centers and start-up accelerators have no real business growth objectives besides occasionally hosting some client events and check marking some corporate strategy item list.
Not only did PR Digital Transformation efforts not help business sustainability in an unfavorable economic period, but they backfired badly for many companies.
Shareholders who remembered reading about impressive new technology deployments were disappointed to hear that those experiments can’t be scaled to support the business in hard times or in the near future. Employees were shocked because they’ve thought that the “innovation and digital boys” knew what they’re doing, and top executives realized that simply nodding their heads in digital transformation meetings for the last several years doesn’t help them now.
What those corporations should have done instead is apply more common sense and ask themselves basic questions, like “Will this make us money?” “Will a high percentage of our global customers ever pay for this?” “Does someone actually need this?” “Will we gain any competitive edge in our industry by doing this?”
It shouldn’t be a surprise that a solid digital transformation agenda needs to pass the basic filters of economics and market rules. Most corporations also have all the capabilities to deal with digital transformation, but they just end up somehow in the wrong combination of vision, leadership and execution.
Luckily, many economists are convinced that the global economy will recover relatively quickly, and that the COVID-19 pandemic won’t kill as many companies as many thought. If your company still exists after this crisis is over, do yourself a favor and don’t practice any more PR Digital Transformation.
Cristian Citu is a digitalization enthusiast who most recently worked as digital transformation lead for the World Economic Forum, focusing on the impact of digital technologies on business and wider society. Follow him at @TheChiefDigital and www.chief.digital.
The views and opinions expressed in this article are those of the author and do not necessarily reflect those of CDOTrends. Photo credit: iStockphoto/Khosrork