October 29, 2012 | George Westerman (MIT Center for Digital Business), interviewed by Michael Fitzgerald
Business leaders hear plenty about how digital technology can transform a business, but so much of the discussion focuses on Amazon, Apple, Facebook and Google that executives at traditional companies might be forgiven for thinking that only high-tech startups can achieve digital transformation. Many companies have tried to gain leverage from technology only to find that they get just a substitution effect or have merely extended their businesses onto a new platform like mobile devices.
But traditional companies are gaining transformative results from digital technologies, in every sector of the business world. George Westerman of the MIT Center for Digital Business explains how some executives are able to lead their companies into the digital era. The most impact comes from the proper adoption of four kinds of new technologies: social networking, analytics, mobile and intelligent sensors. Westerman tells how these evolving technologies are being used at a number of traditional companies to achieve promising results. Companies across the globe are transforming their customer relationships, their operations and even their entire business models by adopting these technologies.
Success does not depend on having a high comfort level with technology. Westerman identifies four types of traditional companies when it comes to using these new technologies: digirati, fashionistas, conservatives and beginners. All four can achieve powerful transformative effects on their business through new technologies, by adopting effective governance approaches, like creating digital czars and digital units that work across the business to achieve goals.
But top leaders have to be behind the idea of change, or it won’t occur. Counting on ideas to bubble up from the bottom of the organization will fail, Westerman warns.