“Digital Business Transformation: How Established Companies Sustain Competitive Advantage From Now to Next”: An Exclusive Excerpt of Nigel Vaz’s New Book

My purpose in writing this book is to help business leaders get past what can be the hardest part of any personal or enterprise transformation: the choices they make every day to move towards what will drive future success. Often, this will mean letting go of things that made us successful in the past, to make room for new skills, relationships, ways of working and opportunities.

I write from a practical perspective developed from decades of partnering with large, established businesses on how to take a holistic and multi-disciplinary approach enabled by digital and a particular set of capabilities. What I mean by digital business transformation (DBT) is this: rather than digitizing parts of the business or adding digital revenues as a stopgap, DBT is about becoming digital at the core to build and sustain customer relevance, maintain competitive advantage and protect from competitive risk.

This book focuses on the ability of businesses to drive two outcomes as a result of DBT:

• Creating an organization that can continually change at pace with the changes around it
• Constructing the capability to identify and realize value through digital for your customers and your business

I encourage you to reach out to me or our teams to discuss any aspect of your transformation, no matter where you are in your journey.

- Nigel

The following is excerpted with the permission of the publisher, Wiley, from “Digital Business Transformation: How Established Companies Sustain Competitive Advantage From Now to Next” by Nigel Vaz. Copyright © 2021 by Nigel Vaz. All rights reserved. This book is available wherever books and eBooks are sold.

The CEO of a major retailer was telling me recently about one of the things he does regularly to make sure that his business is properly serving its customers' needs. He started work at the company when he was 19 years old, stacking shelves, and today runs what is one of the largest retail businesses in the world. It's a great business, and much of that is down to the actions of a CEO and leadership team that care deeply about the company and its customers.

"I walk through the stores and I watch people. I watch our customers. I watch what they do, I watch how they buy, I watch how they engage with products, I watch which aisles they walk through, I watch where they spend time. I talk to them. I understand what they like and what they don't like."

That is the perfect model for what it takes to be a good retailer — be with your customers and understand them.

However, to him, that idea of spending time in his stores and getting close to his customers was very different from looking at a screen to observe and understand the very same things. In his lifetime as CEO, the online channel had become his biggest store and it held the key to understanding whether people are clicking on the top left-hand navigation to shop or using the search function to find products, whether they were dropping out at certain points in the checkout and abandoning their shopping baskets. He didn't quite appreciate that the store visits and web analytics were essentially the same thing. He understood it conceptually, of course, but the good digital practice was not in his DNA. What was true for him is true for a lot of established, or pre-digital, companies.

The inconvenient truth is that most companies are great at their core business, but not great at reimagining the future of their business.

How many businesses that we work for or with today may not survive, let alone thrive, a few years from now? All you have to do is pick up a copy of the Wall Street Journal and see stock prices in decline, falling growth rates, shrinking margins — businesses in trouble. Many of the top companies of yesterday have been overtaken by those that were born digital or that have digital at their core. Figure 4.1 shows a comparison of the top five US companies by market capitalisation in 2001 and today.

Figure 4.1 Today's top five US companies by market cap (as of April 24, 2020) compared with those of 2001

The chart makes stark reading, but there is a bright spot. At the time that those companies in the left-hand column were top of the pile, digital was a tangential idea. The CEO of a major retail company might have told you that he had an ecommerce manager, because ecommerce was something interesting happening over there, as an adjunct to the main business. Talk to a retail CEO today and the only kind of commerce he's talking about is the one that's happening digitally, because it's happening everywhere: in his stores, online and on mobile devices. The same is true of nearly every company of size in every sector. In board rooms around the world, business leaders are discussing the need for digital transformation as the means to identify and unlock exponential value by driving growth, increasing efficiency, and creating better experiences for customers.

Let’s nail our colors to the mast. Would it not be a disaster if the only retailer in the world were Amazon because they were the only company to figure out how to sell us everything? And if the only social community in the world were Facebook? Who wants to be in a place like that? 

The challenge, then, is not to just recognize the imperative for transformation. We have passed that milestone and will not be returning to it. The challenge is to develop the vision as well as the road map to get there; to identify opportunities for disruption, but also to understand how you will go about delivering it; to identify and remove the obstacles to transformation that exist within your business, while replacing them with the qualities and behaviors of a digital-at-the-core organization.