Introduction: The End of Business as Usual

Business as usual is no longer valid. For over a decade, digital disruption has impacted almost every industry. As a result, the traditional rules and assumptions of business are becoming less valid for sustainable success in the global business landscape. The time-tested rules that were developed to identify customers and engage with them, develop and market products and services, as well as manage an organization, its people and resources are no longer valid.

These rules have been upended by emerging technologies, and new business models that leverage technology to displace dominant business models. In any industry, a dominant business model emerges over time, the model that has the most efficient way to allocate and organize resources. New businesses tend to fail due to difficulty in competing with the scale and reach of these dominant business models. However, the emergence of digital technologies have upended this old business rule. New business models are able to leverage technology to create exponential scale and growth within a short time and far fewer resources, effectively displacing dominant business models.

A new business playbook has emerged, rendering the traditional rules and assumptions of business invalid. For example, the traditional rules of growth and scale are no longer valid. Incumbent organizations like Nike or Starbucks took about 24 years to achieve $1 billion dollar market valuation, while luxury brand Prada took 98 years to achieve the same financial milestone. New digitally enabled companies are not able to relate to this extended business timeline (Montini 2014). For example, companies such as YouTube, Twitter, and Instagram achieved the $1 billion valuation in three years or less by leveraging digital technologies and platforms that offered access to a global marketplace of consumers on day one of their business.

In addition, traditional industry boundaries are also becoming less relevant. Incumbent organizations are used to playing within a specific industry and competing with other players within the industry. These boundaries have developed over time, as competing companies focus on building specific expertise and capabilities within their industry. However, digitally enabled companies take an alternative approach to the market, focusing on opportunities created by technology and value created in the global market. This means forgoing traditional industry boundaries to apply technology solutions where possible and needed. For example, Amazon would be hard pressed to define an industry focus, having developed product and service offerings across multiple industries including e-commerce, consumer business and retail, health care, financial services, as well as video and content streaming. In 2021, Amazon opened a hair salon in London to trial the latest industry technologies including an augmented reality hair consultation that allows customers to visualize different hair styles and colors on themselves before deciding on a change (Vincent 2021).

A Global Paradigm Shift

A key trigger for this disruption is the rapid development of technology. In the past, one type of technology or another would be developing at a certain rate. What we're seeing over recent years is that each phase of technology development is leveraging on its previous phase to further accelerate progress. For example, research and development in artificial intelligence has actually existed since the 1950s. But it's only in the past decade or so that we've truly seen its acceleration and applications within industries explode. This is because we now have the right foundational elements not only to support rapid development of technology but also to accelerate it further, including unparalleled processing power, unlimited storage capacity, the low cost of technology production, cloud computing, as well as global connectivity and accessibility online. Soon, we will see 5G capabilities, quantum computing, and smart devices contributing further to this exponential acceleration. With these elements in place, each phase of technology development is leveraging the previous phase, resulting in breakthrough solutions constantly emerging. Technology has extended the boundaries of business reach to virtually anywhere, anytime, achieving incredible scalability and growth beyond customer demographics, physical assets, locations, or market segments.

More importantly, technology has triggered a shift in people globally. We have quickly adopted technology, almost as quickly as it is being discovered and developed. We have adapted our behaviors to suit the new digital world we live in. We have become accustomed to digitally enabled businesses that offer hyper-personalized services seamlessly across multiple channels and touchpoints, predicting our needs and wants, sometimes even before we know what they are. We are now demanding this same level of interaction from any and all companies that we interact with in our daily lives.

Scarcity versus Abundance

The foundational dynamic here is truly having a democratized emerging technology landscape. This can be illustrated by the analog camera example. As we moved away from analog cameras and the development and adoption of digital cameras increased, we shifted from a scarcity model in the industry towards an abundance model. This means shifting away from an industry that was heavily dependent on physical assets-analog camera, film, studios, lighting-where there was a limitation on the number of pictures taken, how and where they could be taken, and a cost associated with taking pictures. As the digital camera emerged in the market, we gradually shifted to an abundance industry environment, where the number of pictures that could be taken by each person increased exponentially. Digitization of the industry enabled anyone to take as many pictures as they liked and share them on digital platforms for an instant global audience. Traditional business models trapped within the scarcity environment, such as Kodak, quickly declined despite being dominant industry leaders. New digitally enabled businesses leveraging technology in the abundance environment, such as Instagram and Pinterest, grew and thrived.

'Over the past decade, technology has undermined the economics of almost every industry, enabling digitization of products and services, and democratized access for a global market of consumers. This shift of scarcity, limited access, and high cost, towards abundance, unlimited access, and low cost, has disrupted almost every industry. Digitally enabled companies thrive in the abundance offered by emerging technologies and new ways of working, while traditional businesses are trapped in the scarcity of physical assets, touchpoints, and interactions.

The Covid Impact

The coronavirus pandemic has further accelerated the shift in behavior, forcing a majority of the world's consumers into the digital ecosphere as we faced the unprecedented global physical lockdown. Unsurprisingly, traditional businesses struggled to adapt to this shift, and many were thrown into shock and standstill, while digitally enabled companies survived and thrived.

Before Covid, mindset was a significant barrier to digital business transformation in organizations. In pre-Covid times, I remember having frequent discussions with various top-level management teams about the relevance of digital disruption, and trying to convince them that the time for transformation had arrived. These conversations were even more challenging with companies that had strong performance in the market, albeit stuck in tradition operational environments. The coronavirus pandemic shifted mindsets almost overnight. Suddenly we were facing an unprecedented situation where physical interactions came to a grinding halt and organizations that thrived in the traditional business landscape were stripped of foundational elements such as physical assets, sales channels, and global supply chains.

Digital Business Transformation

Covid-19 is accelerating digital transformation at many companies, knocking through long-standing resistance and silos as illustrated in Figure I.1. It literally took a global crisis to turn people's mindsets around. On the flipside, the crisis is also setting the agenda and the priorities of where to focus digital business transformation efforts, such as facilitating the needs of a mass remote workforce.

Many companies skipped over gaining a shared understanding for what digital transformation truly means and how it aligns with the long-term business strategy, to implementing technology-based solutions in the name of business continuity. As we move into this next normal environment, this post-Covid business world, companies have a unique choice to make: they can reestablish what has existed so far, or create something new, and take this opportunity to transform and create a better, more sustainable business for the increasingly digital economy.

Digital business transformation is truly a journey-a marathon not a sprint. At the core of this journey are people, the essential element that can make or break the course of any transformation. The concept of digital business transformation goes beyond process or technology implementation. It includes the organization-wide change that is profoundly rooted in the human elements of the business. This goes beyond mindset and behavior shifts, involving the complexities of creating an environment where people thrive through the adoption of new technologies, solutions, and working models, as...