Extinction is Lurking in the Shadows for Digital Dinosaurs
By Elisa Webb Hill
What do Kodak, Blockbuster, Compaq Computers and Enron all have in common? They were powerhouses of their industries, great places to work and admired companies of their time. Today, each of these companies are now out of business.
Different factors led to each company’s downfall, from unethical practices to competition to technology. But there is another variable that played a role in the demise of each of these once-powerhouses, and it is a terrifying trend on the horizon for other legacy companies and associations: DIGITIZATION.
‘Stealing with pride’ recent research conducted by my husband Andy Hill, in conjunction with Jack Parker from Jacksonville University, I am here to tell you that every company and association is at risk of extinction.
Times have changed. We have moved out of the industrial age. But too many legacy companies and associations have not evolved with the times.
The Fortune 500 life expectancy in 1955 was 60 years. At the end of 2017, only 60 of the original companies from 1955 still existed. A large reason? Failure to digitize. Of the top five market capitalized companies in the world, all are digital and new companies: Apple, Microsoft, Alphabet, Amazon, and Facebook.
What all of these companies have in common is their single focus on the customer experience. Digitizing enables you to create what Mazzone calls the ‘Christmas Effect.’ Daily life can feel like Christmas morning!
It is fair to say that both Millennials and Gen Zs are driving this trend, but who doesn’t want what they want, when they want it, and with an element of surprise and complete satisfaction? As Andy stated, “we are in the greatest revolution of business practice since the industrial revolution, and digitized companies are on a roll.” If legacy companies and associations do not figure out how to make every day feel like Christmas, they will become irrelevant.
Understanding the three different approaches to digitization offers a window into why not all companies and associations succeed in digitization:
Digital Transformers leverage digital to reimagine every aspect of their business. (Accenture)
Digital Followers focus on steadily improving existing business with technology. (Accenture)
Digital Dabblers ‘dabble’ in technology without clarity of how it relates to business strategy. (Accenture)
As an example, in order to survive, Domino’s Pizza became a Digital Transformer. It reimagined its entire business model and set new customer expectation standards. It reimagined itself as an “e-commerce company that happened to sell pizza.” (Wong, 2018)
Let’s look closer at what that really means:
Pre-Digitization: Call in an order to Domino’s, ask for the specials, pray to the pizza gods that the order arrives hot, accurate, and fast, and pay the delivery guy with a check.
Post-Digitization: Place an order via the Domino’s app or Twitter, customize your pie, track arrival time, receive your pizza hot and fresh as a result of the company’s new car ovens, and pay online vs paying the driver.
What they did: The CEO owned digital. Domino’s used data for relentless measuring, testing, and investing to build a world class experience. They marketed the digital platform and the ease of the consumer experience. Their talent pool completely changed – everyone loves winners! And they knew great culture and fresh talent would drive consumer change.
What they didn’t do: Focus tactically on an app or a narrow digital solution. They clearly weren’t about following or dabbling!
With Domino’s, the customer was the compass. As Andy pointed out, they looked holistically at the business.
I challenge you to look holistically at your company or association and ask yourself, are you a digital dinosaur? What can you do to DIGITIZE your future and avoid extinction lurking in the shadows? How can you make every day feel like Christmas morning for your customers and your members?