Mental Framework For A Data Driven Digital Transformation
Over the last years, my small business has undergone a digital transformation from a marketing service company to a data literacy consultancy. What does a data literacy consultancy do? We teach business users within large enterprises to work with data, and we help them acquire the necessary skills from state of the art Excel to Python, querying structured, semi-structured and unstructured databases, as well as math, statistics, and probability.
Throughout our transition, we applied a set of techniques, principles, and learnings, which eventually became our mental framework.
“How can a mental framework of a small company work for a large conglomerate with 100,000 employees?”
By open sourcing it! That way, our mental framework can get modified to the needs of way larger entities which then hopefully are going to contribute back. Besides that, there is an overlooked similarity between small businesses like ours and large companies alike: the pressure to reinvent oneself. We can learn from each other. Thus, we’re very public about the mental framework we apply and constantly improve.
Reinventing the Wheel: The Rolls-Royce Cullinan, the first SUV in the company‘s history | Source: Rolls-Royce
I decided to reinvent my business when I realized that providing marketing services had a not-so-great future. Some of our current data literacy service customers face similar problems. Let’s pretend, you are in the automotive business and your company provides critical components for internal combustion engines (this is an entirely fictitious example, a highly realistic one though). As the automotive industry is shifting towards electric motors, you might sooner or later run out of business.
“How do you reinvent a business today which has has been thriving on incremental improvements for 100 years?”
Many automotive suppliers have been around for decades, some for a century and beyond. The automobile as we know it today is a highly sophisticated, millions of times over enhanced version of 1885 Benz Patent-Motorwagen. Now comes the electric, self-driving vehicle which is available through a ride-sharing service. How do you respond to that?
German manufacturers are legendary for their supreme quality, and Mercedes claims “The best or nothing” for themselves. But what if the category in which you are the leader is at risk of becoming irrelevant, or fundamentally changed? You have to reinvent yourself.
97% of all digital transformations fail, and some large businesses trying to digitally reinvent themselves lose billions along the way. First of all: There is nothing wrong with failing. As Silicon Valley veteran investor Randy Komisar once said in a talk at Stanford University that: “What distinguishes the Silicon Valley is not its successes, but the way in which it deals with failures. It is a model based on many, many failures and a few extraordinary successes.”
To win, you have to learn how to fail, because your road to success is paved with failures. Once you succeed, the cycle starts all over again: you fail until you succeed.
How does your business create value? It’s probably in your DNA, and that’s the part of your enterprise that will lilkely not change. Many German companies, for example, thrive on the so-called Erfindergeist (inventor spirit). They create value by catering innovative solutions to their customers. Some other businesses leverage on others’ inventions though, such as generic drugs pharmaceutical companies. They create value by democratizing products. Some do both. Take the advent of SUVs as a high volume category in the automotive industry: Many highly unlike candidates such as Porsche, Lamborghini and Rolls-Royce have copied the concept of SUVs and successfully interpreted in their own, unique ways.
You might also reframe the value creation strategy as a problem-solving strategy. Bear in mind though that this approach might be too limiting, depending on your industry and target customers.
