Size Doesn't Matter, But Your Business Model Does
One size does not fit all when it comes to digital transformation solutions. Yes, this may seem obvious enough, but you'd be surprised at how often agencies, consultants and senior leaders sell small business solutions into large organizations or vice versa. In many instances, this comes from a lack of understanding of the underlying principles of transformation. One key principle to be aware of is that while the size of the business may not matter, the business model that they have or are choosing to shift towards, makes a significant difference in the approach to be taken with their team, their technology and their tactics. The uncovering of this secret can save lots of time, money and frustration for business leaders and their teams.
The key to know whether you are heading down the right path is to get curious, ask questions, look at business cases and data points to help with making decisions.
I have been blessed with the unique benefit of strategizing with leaders of large conglomerates as well as entrepreneurs who are running micro, small and medium businesses. What I've uncovered is that they have similar challenges that often require different solutions. Don't get me wrong, there are some aspects of digitalization that remain relevant to both like the 3 Ps discussed in Secret #1, and at the same time there are massive differences to the way their needs are addressed.
As an example, digital marketing is a common area that gets pinpointed as a must have in the transformation process. And yet, the distinction that should be made between marketing tactics that are relevant to a company with hundreds or thousands of employees vs. one with 15-30 are often not discussed. A small business could easily bust their entire budget on digital marketing strategies that are more applicable to a company 10X in size. Similarly, there are some small business marketing tactics that can be applied to a single line of business within a large entity to help with gaining competitive advantage - but this may be missed in the "big" marketing strategy meetings.
The key to knowing whether or not your agency partner or your marketing department is taking you down the right path, is to get curious, ask questions, look at business cases and data points to help with making decisions.
Another example is related to managing the transformation budget. For some smaller companies, it may be ok to have one budget that includes digitalization initiatives that gets tracked on an annual and quarterly basis; while for larger companies, an entirely separate budget may need to be at play. This type of flexibility towards the budgeting process will require new thinking and new learning for the finance team and the boards who will be approving the budgets once they're put forward.
So where does the business model fit into all of this? Well, digital transformation acts as an enabler for companies to take on new business models or to optimize an existing one. Take eCommerce as an example. For many entrepreneurs, especially since COVID, any one of the various eCommerce business models could be the entire approach to the way they do business. For larger entities that are going through the transformation process, taking on eCommerce may be a necessity, but the model(s) that they choose will be dependent on many more factors. The key to success here, is revisiting the vision of the business and then shaping the strategy to encapsulate the digital levers that are most relevant to achieving that vision. The business model acts as a key component to any strategy, so the re-alignment with the vision on an ongoing basis is helpful.
The not so secret secret is that regardless of size and model, the successful transformation of any company requires agile, strategic, objective leadership... I could actually keep going with the adjectives. But you get the picture. More to come on that in the next few weeks.