Is your business digitizing or transforming?

by | Feb 23, 2017

The transformation journey begins with a rethinking of three core categories: market, products and customers. In this rethink, we’re looking for new opportunities that digital will provide. For an example, let’s look at the recent disruptions in the music industry:


First you bought records on vinyl, and then the record labels digitized them and re-sold them to you on CDs. Once computer memory improved enough to store your tunes, you ripped CDs into your hard drive – and redeployed your CDs as drink coasters. Then, once Internet speeds got fast enough, those downloads became displaced by streaming. Digitization became digital transformation.

Today’s music market is liberated from its geography-bound markets and distribution channels. The game now is more about creating buzz in social media communities of fans in ever-narrowing genres. The market has exploded and fragmented at the same time.


Streaming didn’t just change distribution channels – it also changed the very nature of the product. Today people can purchase a single album (on vinyl, CD or digital download), or stream it via Spotify, Google Play or other services. Sirius XM preserves the radio format, but expands the model with hundreds of channels beaming over all of North America. Terrestrial radio still exists, but listeners can also sample new music via recommendation engines in streaming services or through podcasts.


Technology can expand a customer base in unexpected ways. Pandora, which creates a radio station on the fly based on your tastes, has found an adjacent market of consumers who otherwise wouldn’t be purchasing much music. And soon, virtual reality programming will open up new types of music consumers who want a live musical experience without leaving home.

Once we rethink our core categories, it’s easy to see where new opportunities lie. More difficult is transforming an organization’s internal capabilities to meet those opportunities. Below are some other core elements needed to keep pace with digital transformation:

  • Innovation – Enterprises should budget for an appropriate mix of short and long-term investments.
  • Data – This is the oil of the digital economy. Any effective organization will need to have this as a core competency.
  • Agile execution – Focus on short-term, continuous wins in the service of your longer-term strategic priorities.
  • Technology – Of course, the proper technology is essential. Technology needs to be flexible, scalable, responsive and solution-oriented.

How has technology redefined your own market and distribution channels? What new opportunities does digitization allow? What technological market disruption are you missing that might relegate your business to an artifact of the past?

Send thoughts, disruptive comments and CD drink coasters to me at [email protected]

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Adriaan Bouten


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