The digital turmoil
Digitalization is often thought of as a technological challenge, and a seemingly rational response is to hire people with IT and data skills to deal with it. But while it is indeed important to ensure that a company’s processes and systems are supported by state-of-the-art information technology, focusing only on this can lead to a false sense of security. The digital revolution is not only changing the way products and services are produced and consumed, but it is also fundamentally changing their perceived value and the competition in an increasingly transparent market. The whole market environment is changing: category boundaries erode, entry barriers are reduced, networks emerge, customers turn into competitors and everything happens much faster. Your company will be affected unless you have a legally guaranteed monopoly – and perhaps even then.
From technology to a digital mindset
What was once considered expertise in the analog world might become a liability in the digital age instead of an asset. Established mental models can sometimes prevent a timely response to digital challenges. Digital transformation requires a digital mindset and new approaches to dealing with both decision risk and decision speed. If we compare the marketplace to a game of chess, then, until recently the players could assume that everybody played by the same basic rules and moved around the same set of pieces. In the digital era, the playing field has become much larger and new pieces have entered the scene, forming new alliances and trying out new moves. Companies that attempt to play the traditional game are in trouble as it is no longer possible to succeed with the old strategies (see Figure 1).