Thursday, October 03, 2019

Book Review: What about the Future? by Fred Phillips

I'm returning today to one of my favorite activities - a book review.  Good books are simply too rare, and good books about topics important to innovators are unfortunately even more rare.  However, I'm happy to say that I've just read a book about understanding the future that should be read by anyone interested in foresighting, forecasting or scenario planning.  If you are an innovator, or hope to create meaningful, viable products or services for customers, attempting to understand the future is vital to creating new products.

The book I'm reviewing today is entitled What about the Future?  It was written by Fred Phillips, who is a professor and also the editor of the journal Technological Forecasting and Societal Change.  In full disclosure Fred was also one of my favorite professors when I took his course on technology adoption at UT-Austin's MBA program.

The Book

Fred has written a book that I really liked, and to be honest I had a difficult time putting into a specific context.  It combines some rationale for examining the future, some discussion on different approaches for examining the future and several philosophical discussions about complexity and uncertainty.  It is a book that challenges your assumptions, provokes your thinking and provides some really excellent points about anticipating future change. 

In short, this is not a "how to" book, but a book that takes on the larger questions about what the future is, how uncertainty and complexity should influence our thinking and planning.  Ultimately I think Fred captures the purpose of the book in the statement from the introduction that reads "They need the skills for forming a fundamental perspective about the future".  And that's what this book seeks to provide.

Fred's approach

Fred lays out the book in an interesting sequence of chapters.  Early in the book he grounds the reader on concepts like risk and uncertainty.  He notes that while we are uncertain about the future we often are overly certain about the past, and provides illustrations why even the past is often a bit uncertain.

The middle chapters deal with why we might want to understand the future and the impacts to decision making and organizational structure if we have a better understanding of the future.

The closing chapters become a more philosophical discussion about the future and our ability to understand the future and, having reached conclusions about the future, the impact on business and public policy.

Fred brings a systematic way of thinking about the future, using many examples that will be familiar to those who conduct work in foresighting, forecasting or scenario planning.  He includes a number of charts, graphs and illustrations that help detail his approach and thinking.  His writing is crisp and his arguments are very incisive, so the text is easy to read yet thought provoking at the same time.

One of my favorite arguments he makes in the book is that "the purpose of forecasting is not to be right, but to be ready".  This is reminiscent of the adage that plans are nothing but planning is everything.  We can't possible get our predictions of the future exactly right, but we can exercise our understanding of potential futures to be ready as they occur.

Interesting ideas and arguments

A couple of ideas that Fred presents I found especially interesting include:

 - which is changing faster, technology or society?  The general response is that technology is changing faster than society, but Fred makes an argument that society is changing faster than technology.  He makes the argument that technology innovation is actually slowing, while factors like shared values are changing or disintegrating faster than ever.  What impact would a culture or society that's morphing faster than technology have?

 - Fred argues that the two most reliable ways to predict the future are demographics and the Kondratieff wave.  He makes the point that demographics is destiny, and by understanding demographic change we can anticipate other societal, technological and other demands. 

 - I was not familiar with Kondratieff but the ideas from this Russian economist make sense - they are based on cycles of economic expansion and lassitude.  Kondratieff projected 30 year cycles of increased innovation followed by 30 years of exploitation of the previous innovative period.  This idea of cycles of innovation and cycles of consumption make sense to me.

Other ideas

Later in the book Fred talks about the difficulty of imagining the future, using what he calls the Captain Cook problem - one of almost willful blindness.  He notes that the Tahitians failed to acknowledge or even recognize Cook's flotilla because they had become accustomed to identifying items on the ocean as flotsam, whales or canoes.  They could not see or understand what was directly in front of them because their mental models did not include an option for these new things.  Likewise, many people who want to understand the future may not recognize that aspects or artifacts of the future are already present.  Here we can borrow from William Gibson and note that the future is already here, just not widely distributed.

My favorite chapter

Chapter 11 is perhaps my favorite, because Fred provides a significant number of examples of trends that reach a tipping point, and thus move from potential change to accepted change.  He calls these "Crossovers" and the ideas behind the crossovers and what these crossovers tell us can help shape how we think about understanding the future in the future.  This chapter alone and the crossovers Fred documents are worth the price of the book.

Review and takeaway

This is an excellent book and should be read by a wide audience, especially those who have an interest in understanding how to approach the future.  Individuals in industry, government, public policy and other functions should have a better appreciation for the future and the interwoven aspects of complexity and uncertainty as Fred presents.

If I have concerns with the book it is because I am always seeking really definitive, practical tools and methods.  Fred hasn't written a "how to" book, he has written a "how to think about" book, and this gives the book a wider audience and a more philosophical bent than I expected.  If only more people in more companies and more positions of power in public policy and in government agencies spent more time thinking about and trying to understand the future, I think we'd all be far better off and far better prepared for what the future holds.

I'd highly recommend this book, not for the specific answers it provides but for the questions and thoughts it should provoke.
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posted by Jeffrey Phillips at 6:55 AM 0 comments

Thursday, September 19, 2019

The music isn't in the piano

I was speaking with a long time colleague and trusted branding partner, Kevin Polonofsky from Revered recently about branding and marketing.  We were specifically discussing the idea of training people to do specific tasks that they did not have time to do, or had no passion to do.  One good example of this is innovation training.  In my work history I've done a lot of training for corporate clients on innovation methods and tools.  Many executives have asked that I train their teams, in order that the teams become more proficient at innovation.

Let me stop here and say that training, for people who have the focus and the passion to exercise the training, is exceptionally valuable.  On the other hand, training is sometimes used as a way to demonstrate that "we are doing something" but isn't intended to be put into practice, or executives don't quite know how to shape projects or opportunities that allow teams to put new learning into practice quickly.

As I was describing this phenomenon, Kevin said something I thought was profound, and I've paraphrased for the title of this blog post.  He said - "they think the music is in the piano".  When I asked him what he meant by that, he said that anyone can buy a piano but the piano does not create music.  It takes talent, training and commitment to make the music come out of the piano.  In the same way providing innovation training to teams that don't immediately start an innovation project, or who don't have the time or aren't compensated to do innovation work is pretty meaningless.

What's more, with the right training, practice and passion a good pianist can make many kinds of music from a piano, but the piano does not create the music.

Player Piano

Ah, but I can hear you say, some pianos don't need pianists.  And this is true.  Player pianos can create music without a piano player, but they are driven by a computer (today) or by a roll of paper that dictates which keys get pressed when, merely a recording of key strokes in the right order.  In the business world there is the equivalent of a player piano.  It's your existing processes and culture, which reinforce how work gets done, and ensures that for the most part work is done the same way every day and in every instance.  In fact we have perhaps the worst situation when we train internal teams on innovation.  They aren't especially interested in being pianists, and they know the piano they will be playing is already capable of playing only one song - the one it is programmed to play.

It's no wonder that many companies and teams struggle to innovate.  Most people have little time and little exposure to unmet needs, and and are so focused on getting the existing products out the door at the lowest possible cost that providing training for innovation seems almost superfluous.

Prodigies vs Practice

For some reason many businesses seem to think that their staff are prodigies when it comes to innovation.  That is, show them some innovation tools or methods at some point in their career and at their first attempt at innovation they'll create a masterpiece.  Innovation is far too unusual within an existing organization to be easy, and far too different to be completed effectively by people using tools for the first time without experience or practice.

So, this is where it all falls apart.  There are few innovation prodigies who are just naturally good at innovation, and unfortunately there are few companies where average people who aren't prodigies get to practice the tools and methods regularly.  So innovation is often attempted and rarely very successful because there are few prodigies and the rest of the people don't practice.

The best case is when people who have a passion for change and creativity are given the time they need, an opportunity or problem that challenges their thinking and the training on the tools that are necessary to do good innovation work.  In Kevin's metaphor about the piano, the music is innovation, and while the piano can make good music, it takes a prodigy or practice to bring it out.

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posted by Jeffrey Phillips at 7:12 AM 0 comments

Wednesday, September 11, 2019

Why I still get my Netflix movies in the mail

I'm a movie junkie - I love movies.  Old movies like Casablanca, or even new movies like John Wick 3.  Can't wait to see what John Wick can survive in the third installment.  I wore out a Blockbuster card back in the day when Blockbuster was a thing.  When I discovered Netflix, and its extensive catalog of movies, I was hooked.  Best thing about Netflix is they delivered to my mailbox.

Now, of course, Netflix and everyone else can stream movies to my TV, my laptop and my smartphone.  I even have a package (or at least AT&T says I do - they've never been able to get it to work) for HBO on my phone.  You might think with this plethora of offerings and choice I'd be a streaming guy on Netflix.  But you'd be wrong.

Why I love getting movies in the mail

I'm old school and admittedly so where movies are concerned.  My son, who is in his third year in engineering school, laughs every time I talk about my Netflix account.  Mostly I think because he can't piggy back and get downloads for free.  He could not believe we still get movies in the mail.  I thought about this fact for a while and like many things in life decided there was an innovation lesson in my approach.

It has to do with choice.  Netflix through the mail allows me to select and rank movies I'd like to watch, and I receive them one at a time. So I have unlimited choice in scheduling but exceptionally limited choice in the moment.  When it comes time to watch a movie in the evenings, we have exactly one choice.  Rather than turn to an almost unlimited selection of movies and content on the web or through a cable provider, I can say "well, I selected this one movie for a reason, so let's watch it".

For example, I've got A Clockwork Orange waiting for me at home.  If I were scanning through a long list of movies from my cable provider or from Netflix streaming, looking for movies to watch in the moment, I might think - I can always get A Clockwork Orange.  Too much opportunity and too much choice leads to difficult decision making and FOMO.  If I'm going to invest 2 hours in a movie I select on the fly it had better be good.  But when I have one choice in front of me, and one I've made from a long list of movies previously, then I'm usually happy with the selection.

Lessons for Innovators

There may be lessons here for innovators.  There is a psychological challenge known as choice overload or the paradox of choice.  This happens when people struggle to make decisions when offered too many choices.  I believe that many of our innovations fall prey choice overload, whether we are speaking of too many content choices online or too many features on a product.

Customers want to get a job done - in my case, enjoy an interesting and entertaining movie - without a lot of hassle or decision making.  When we introduce too many options and too much choice, we can provide what appears to be a greater benefit but may introduce confusion or anxiety - what if a better movie is available now?  Simply by creating a lot of content or features we create decision anxiety and increase FOMO, when a new product or service should reduce it.

There's another reason I love to get NetFlix in the mail.  My little red envelope is almost the only thing I get that isn't a bill or a flyer.  There's something almost gift-like about receiving the movie in the mail, and I think that's another lesson.  Increasingly we've lost the sense of wonder or experience with many of our products.  Apple used to strive for this, attempting to create a meaningful experience for customers when using its products, but I think they've jumped the shark lately.  What experience, emotion or unexpected gift does your product or service provide?

Do a job, simplify, create wonder

So, in closing, I'd say that innovators who create new products and services should always be asking the following questions, of themselves, their solutions and most importantly, their prospective customers:

  1. Does what I'm creating help you accomplish your job to be done?
  2. Does it do so in a way that reduces anxiety, stress or uncertainty?
  3. Does it create a new customer experience that evokes wonder or heightened experience?
  4. Will the product simplify my life and choices?
Perhaps I'm old-fashioned, but these are some of the reasons I still get my Netflix movies in the mail.
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posted by Jeffrey Phillips at 7:32 AM 0 comments

Thursday, September 05, 2019

If it doesn't fit, it must be innovation

Years ago, Johnny Cochrane convinced a jury that OJ Simpson was not guilty of murdering Nichole Simpson.  While there were undoubtedly many factors that led to the acquittal, one of the biggest factors was the gloves.  When OJ tried on the gloves in the witness stand, the gloves did not seem to fit his hands.  Cochrane then uttered the famous line in his closing:  if the gloves do not fit you must acquit.

Whether you think that is a compelling line of reasoning for a jury trial or not, it might not be a bad way to think about innovation.  You see, many companies cannot adequately define innovation for their employees and teams.  Sure there are interesting definitions like "innovation is a new to the world idea" or "innovation is doing new things" but these are abstract concepts.  What employees need is clarity about what is "innovation" and more importantly, which innovations are useful and acceptable and are likely to get funded.  I think Cochrane's statement leads us to a potential solution.

Why do definitions matter?

Before we dive into how Cochrane's statement is very apropos for innovation, let me just digress to extol the importance of clear communication and innovation. When communication is good and definitions are clear, people can do good work.  When communications are poor or definitions are incomplete, people generally take one of three tacks:  1) they stop working until communications are clear or definitions improve, 2) they create their own definitions and start working or 3) they fall back on what they already know and trust.  All three outcomes as described here are bad for innovation:  two (the first and third) basically revert to the status quo.  The second has the innovation team dreaming up its own activities and defining its own outcomes.

When innovating, people need to know how much change to introduce, how much risk to assume, how much impact to create.  Without that information, everything is likely to be incremental.

Does it fit?

There are perhaps two types of innovation in the definition I'd like to propose.  Neither definition is "good' or "bad" but may be helpful when considering what innovation is and which innovations are useful.  What I've found over my 15 years of innovation consulting is that innovations either "fit" with how the company thinks and does business, or they don't.  Again, we aren't trying to ascertain the potential impact or market value of an idea, but trying to define which innovations will be accepted and funded.

This is almost the same as talking about incremental innovation and disruptive innovation, or "horizon one" innovation and "horizon 3" innovation.  Innovations that fit the existing operations, product lines and business models, that serve existing and adjacent customers will "fit" the business and are very likely to be accepted.  These are incremental innovations, small changes to existing products, services or ideas that won't cost much to develop and won't introduce a lot of risk.

It does not fit

Ideas that don't fit the existing product line structure, don't serve existing customers or don't fit within the existing business model do not fit and will often fail to attract internal investment.  That's because they introduce too much risk and change.  Ideas that require a new business model require working in a new way.  Ideas that require attracting new customers require new and potentially different marketing investments.  These ideas will occasionally rise in an innovation portfolio but will rarely receive internal approval.  Ideas like these are often pursued by startups or new entrants who have less to lose than incumbents.

Value Judgements

Neither incremental (those that fit) or disruptive (those that don't fit) ideas are necessarily good or bad.  The focus and impact will depend on the context and strategy in the moment.  The problem is that most, if not all ideas are expected to fit the existing operating model, and will therefore be incremental at best.  Ideas that don't fit aren't often welcomed and face a significant number of challenges.

A good innovation portfolio will include a significant number of both types of ideas - those that fit the model and those that don't.  Constantly ignoring ideas that don't fit your model simply cedes the emerging and interesting portions of your business to competitors or new entrants.

Instead of asking - "does it fit" we should, in fact we must ask fairly often - which ideas do we have that don't fit our operating model, and how many are we investing in.  
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posted by Jeffrey Phillips at 5:44 AM 0 comments

Wednesday, August 28, 2019

VUCA is a matter of perspective

VUCA is the new black.  Suddenly everyone has realized that sometimes the economy or markets are volatile or uncertain.  If I were older and cranky I'd blame this on the millennials, not because they are millennials but because they've never lived with a stock market that goes down.  Volatility seems like something we've only just discovered.  Not too many people seem to remember the stock market crash of 2008, but of course that was a decade ago.

VUCA is now getting tossed around like it is a new idea, which is NOT true. VUCA is, however, more relevant than ever to people who refuse to take the long view, or who refuse to prepare.  What is volatility or uncertainty after all, if you have a longer term view?  What appear to be massive swings in an economy or a market in the short term turn out to be small hills and valleys over a 20 or 30 year horizon.  There is of course the famous and perhaps misquoted statement by Zhou Enlai, the Chinese premier, who replied "too early to say" when asked about the impact of the French revolution.  Some people have suggested this is the sage advice of a people who take a long view, reflecting on the impact of the French revolution in the 1789.  Others note that he might have been referring to violence in France in 1968.  This quote has the benefit of being true and the added bonus of proving that ambiguity and uncertainty matter.


VUCA, like many four letter acronyms, probably springs from military usage.  It stands for Volatile, Uncertain, Complex and Ambiguous.  A learned scholar would note that there's not a lot of difference between these words.  Many things that are volatile are also uncertain.  Uncertain and ambiguous are almost synonyms.  Many things that are complex can be uncertain or ambiguous.  VUCA is just a way of saying difficult to describe or understand.

We innovators and purveyors of future insight talk about VUCA like it's a problem.  Wouldn't it be nice if the world were predictable, stationary, completely certain.  The problem is that very few people want to live in a world with such predictability and stability.  We'd get bored fairly quickly I think, and those of us who like change would go absolutely crazy.  I think it's healthy for people to live in a VUCA world.  It only becomes a problem when the world becomes too uncertain, too volatile or too complex, and that measure is often in the eyes of the beholder.

Three ways to respond to VUCA

There are options to respond to a VUCA situation.  The first is to react to the volatility and change after the fact and complain about what a crazy, VUCA world we live in.  This is what most people do, simply react after the fact and complain about change, as if change isn't the norm.  Sorry to sound judgemental but this is the least interesting, least engaging response and one that places the blame on change that is already occurring.

The second option is to take a long view.  Notice that much change reverses itself or corrects over time.  I noticed just this week that jean shorts seem to be back in style, after being the butt of jokes (jorts anyone?) for years.  The market crashed in 2008 and reached the same point as the top of the market a few years later.  In this model we ignore the momentary blips and look for longer term, not reacting to every change.  This model relies on patience, past performance and slowly adapting to the markets and environments as necessary.  Call this the dollar-cost averaging approach.  If you don't know the reference, ask your broker.

The third option to address VUCA is to look ahead, examine trends and conduct foresighting or scenario planning.  The future, as we've been assured, is out there, and there is evidence of what is going to happen, many times long before it happens.  Uncertainty can be reduced by looking at the possible options and their likelihood of occurrence.  Volatility can be anticipated if we look forward and expect it.  Playing out various scenarios helps to illuminate what is likely to happen and what the requisite reactions will be from those who are simply reacting to the events.

VUCA is what happens to intellectually lazy people

Isn't VUCA just an excuse for "I was too busy or preoccupied or lazy to do a little investigation into what could happen?"  Maybe VUCA isn't an acronym but Latin for "didn't do enough planning".  Of course much of this diatribe is tongue firmly planted in cheek.  The world is more volatile and markets and economies are more uncertain than ever.

 But on the flip side we have more information and are more connected than ever.  Instead of being a victim of VUCA and acting like VUCA impacts are unpredictable and unavoidable, perhaps we should become more proactive, trying to anticipate the volatility, trying to reduce the uncertainty, trying to simplify the complexity.  But that takes foresight, thinking and free time, all of which are sadly in short supply in too many businesses today.

If you need help, contact me.  I've conducted dozens of foresighting and scenario planning exercises for non-profits, universities, government agencies and of course corporations.  If you are living in a VUCA world and don't want to simply react to changes, and don't have the patience to simply wait them out, we can help.  You can reduce the impact of volatility, create more clarity and simplify complexity by working to understand the future.
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posted by Jeffrey Phillips at 6:43 AM 0 comments

Thursday, August 22, 2019

Customer experience is about to undergo a significant transformation

I've been writing lately about the intersection of innovation and digital transformation, first because it is a very current topic and second because there are fascinating possibilities as innovation and digital transformation collide.  Increasingly, new product development is being digitized (that it, it is becoming an increasingly digital experience with generative design) and new product development must incorporate digital capabilities - sensors, data, communications.  Soon all products will be smart products.  But I digress.

The real point I wanted to write about today is that while all of this new innovation and digital transformation is occurring, it is very easy to get caught up in the technology and emerging capabilities and miss what is probably the most important focal point of your work - as an innovator or as a person focused on digital transformation.  Do you call someone working in digital transformation a digital transformer?

The important focal point - the thing that should be paramount in your thinking is:  how does this improve customer experience?  Customer experience and how customers engage and interact with your solutions is becoming the most important factor in product design, development and innovation.  Digital transformation is simply accelerating this change.

Why is customer experience paramount?

It's similar to the Maslow's hierarchy of needs.  Once a specific set of needs has been relatively well provided for, you move to a higher and often more esoteric set of needs.  Once shelter and food are reasonably well provided for, you move on to well being and happiness as an example.  The same is true for products and services.

Once a product has the appropriate features and capabilities, you move into a new state:  does this product or service enhance my experience?  take for example two competing products, both of which have the same list of features. The first device is much easier to use, integrates into the way you live and work and seamlessly interacts with other devices.  The other is more difficult to use, doesn't integrate and doesn't interact or play well with other devices.  The customer experience of the first device makes it much more attractive than the second device, even though they both have the same capabilities and features.  All things being equal, most people will choose the first device.  That's because the basic needs are satisfied and now customer experience,usability and design matter more.

Why is this accelerated by digital transformation?

I'll argue that we are at peak or perhaps even beyond peak product design.  For years we celebrated individuals who designed products.  Jony Ive was a well-known figure from Apple because of his designs.  However, the value from products and services is increasingly in the data and connectivity, so improving the experience from a digital perspective is increasingly more important than the physical design - it does not lessen the demand for good physical design, just shifts focus.

Digital transformation allows innovators and digital transformers to create new experiences from digitally connected devices, adding value with data and experiences like augmented reality, voice control and other factors.  Don't be fooled though, simply adding more data or more digital features isn't going to win.  Good design and customer experience at the digital level matters a lot, since the vast majority of consumers aren't digital natives.  However, we can expect a lot more focus on customer experience, regardless of the type and nature of the offering or solution.

CX and UX in demand

What we can anticipate is that individuals who understand customer experience and usability will be in great demand, especially those who understand the importance of usability and experience in an increasingly digital product offering.  Understanding that people want access to data and information, but on their terms, that is easy to use and easy to understand and augments or enhances a physical product or experience is vital.

This poses an interesting predicament - we have been focusing on developing data scientists, who understand the data, but have we spent as much time developing data experience professionals, who understand how to make the experience of data and digitally enhanced products effective?  Of course the science leads the experience - it's that way with every new technology advancement.  How quickly do we catch up with digital experience?

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posted by Jeffrey Phillips at 7:12 AM 0 comments

Wednesday, August 21, 2019

Digital transformation: Pandora's box or cornucopia?

Digital transformation.  Everyone from the CEO to the janitor understands that digital transformation is important.  Every competitor is talking about what digital transformation will do for their business - create new revenues, cut inefficiencies and costs, discover new value in previously unremarkable data.  Digital transformation is the latest management philosophy, like ERP or business process re-engineering or innovation that have come before it.  Yet unlike some of these previous philosophies, digital transformation has the power to actually transform a business, rather than simply improve core processes or cut costs.

Right now, digital transformation is a moniker without a definition.  Some people refer to digital transformation as digitalization - improving systems and processes to the point where the business runs on fully integrated digital data and systems.  Other people refer to the goal of being "data driven" - that is, letting data drive processes and decisions.  Some people refer to digital transformation as the advent of artificial intelligence and machine learning as a core component of business operations.  The truth is, like innovation, digital transformation is in the eye, and the definition, of the beholder.  And when definitions are loose and not shared, different implementations will create different outcomes, and what could be a transformative activity is likely to become a discrete project.

Digital and Transformative

There are digital projects and there are transformative projects, but there are very few digital transformative projects.  I use the emphasis intentionally, for this reason:  improving your ability to manage your data (a digital project) won't necessarily transform your business, and you can transform your business without necessarily improving your digital operations, but both are discrete projects.

Digital transformation is a journey.  There.  I said it.  It is an old trope but sometimes old sayings are valid.  To transform a company and make it much more digital, agile, fast and innovative, it will take time and commitment.  This is not a one time AI project in a portion of the business, but an intentional change to how business is done.  Nothing like that happens quickly or in isolation.  Many of the leading firms working on digital transformation have been at it for several years, and when they are being honest they'll admit they have several more years to go to achieve any real digital transformation.

Secondary and Tertiary effects

What's equally if not more important than the realization that digital transformation is a journey of many projects and not a single project is the subsequent understanding that the transformation isn't simply a technology or business process transformation, but will eventually impact:
 - data
 - customer service and experience
 - business models and revenue models
 - partners and the delivery or service ecosystem

While digital changes that you implement today may not seem to impact how you interact with customers, the channels you use or the service experiences customers enjoy, think about the fact that you are transforming your business, as customers and expectations are also being transformed.  If you believe you can continue to operate in the models and methods of the past, while transforming only the data portion of your business, you are sadly mistaken.

Digital transformation will change much more than the data, internal processes and products.  Take for example the new Lumi diapers from Pampers.  These are diapers with a sensor to alert parents to their child's activity and the dampness of the diaper.  With a single sensor (digital capability) information can flow from the diaper to the parent's phone or PC.  Also included in this solution is a digital camera, which the parent can use to turn on or off and view the child at a distance.

From that description, all we've done is place a sensor on a diaper, and exchange data.  But look at what happens next.  The app on the PC or table must be interactive and useful for parents in order for this to succeed.  Thus, customer experience becomes important.  Then, for Pampers to actually benefit from this device they must drive more diaper sales, and create more loyalty, so being able to order diapers from the app is a fairly simple addition, changing the business dynamic between Pampers, the retail channel and the parent.  Of course the delivery of diapers is part of the customer experience as well.

One small change, many secondary and tertiary effects

The challenge with digital transformation at a project level or at a corporate level is the unexpected or even unanticipated secondary and tertiary effects.  By simply including a sensor or data device on a product, you create data flow which creates new insights and opportunities for customer interaction, leading to the importance of customer experience.  As the customer becomes more involved in the data stream, the company has new opportunities to market goods and services, changing the retail channel dynamic and creating new revenue streams and business models.  To support these new models, new and existing ecosystem partners must play an integrated role to provide the service and product expected.

Pandora's Box or Horn of Plenty?

The pessimistic side of me says that many companies will focus on the data flow as they add intelligence to devices, and ignore all of these secondary possibilities.  Some portion of me wonders if these opportunities are a Pandora's Box, full of promise at the start but unleashing issues we haven't fully addressed like ethics and privacy.

But perhaps the best metaphor for the prepared and thoughtful company is a horn of plenty.  There are many opportunities within a digital transformation, and companies that fully consider their opportunities, including the immediately obvious data and analytics opportunities but also the opportunities new data exchange creates, can reap fairly dramatic rewards.
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posted by Jeffrey Phillips at 9:27 AM 0 comments