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C-suite leaders are worried about their company’s ability to compete with born-digital businesses.
That’s the finding from a new study by Protiviti and North Carolina State University that surveyed executives about risks businesses are facing in 2019. Results from this year’s survey show a significant increase in digital readiness concerns, jumping from the number 10 position in 2018 to number one in 2019.
Here’s why the ability to adapt to digital is more important than ever, and how to ensure your business isn’t left behind.
What is a Born-Digital Business?
Born digital businesses were created during and after the post-1990s era of the Internet, email and social media. And with technology evolving faster than ever, born-digital businesses could have a significant advantage when it comes to keeping up.
“Organizations have much greater concerns that their existing operations and legacy IT infrastructure may not be able to meet performance expectations as well as companies that are ‘born digital,’” says Pat Scott, Executive Vice President at global consulting firm Protiviti.
Executives surveyed for BrainStation’s 2019 Digital Skills Survey agreed digital readiness is a top priority, with 74 percent reporting their organization is actively involved in digital transformation activities. More than half (63 percent) also said their digital investments are growing and 89 percent said there are elements of their products and services that did not exist five years earlier.
Both reports make it clear technology is changing the way we live and work, and that businesses must adapt to stay competitive. Now, let’s look at some of the ways executives can compete with born-digital businesses and a few examples of companies winning and losing the race.
Competing With Born-Digital Businesses
At the heart of digital transformation is a company’s ability to self-assess their position in the digital landscape. To help businesses stay on track, there are four questions Protiviti recommends executives ask when thinking about how to compete with born-digital businesses:
- Ask yourself where you are on a scale of digital readiness (Are you a skeptic, a beginner, a follower, or an innovator? Where are your competitors?)
- Evaluate your employee’s skill sets and talents (Do you have staff who understand the technology your business will need to grow?)
- Evaluate your leadership team’s skill set and talents (Do you have a mix of seasoned executives and leaders who understand new trends in technology?)
- Overcome resistance to change (Do leadership and staff resist or welcome change?)
Take Canada Post, a 250-year-old business in the midst of digital transformation, for example. The first step towards a digital transformation is self-awareness, and Canada Post recognized they needed to make big changes to move from a traditional brick and mortar business into a digital leader.
This lead to the 2011 launch of a digital strategy focused on eCommerce and user experience. Part of that strategy involved updating their recruitment process to attract top digital talent, creating a digitally-friendly office, and empowering existing staff to change their roles through training.
“We’ve invested a lot to create an environment where people don’t feel like they’re coming to an old, archaic organization with old bureaucracy in the way,” said Canada Post’s Director of Design and User Experience, Vadim Tslaf.
So far their plan is paying off. Canada Post is a leader in eCommerce delivery and their annual revenue has nearly doubled since 2011.
On the other hand, we can look to Blockbuster, Toys R Us and recently bankrupt Payless ShoeSource as examples of businesses that didn’t update their business model soon enough to contend with born-digital competitors.
In fact, in its bankruptcy filings Payless (founded in 1956) cited the company’s “inability to keep up with the shift in customer demand” and a failure to add a digital offering as its downfall.
Examples like Canada Post and Payless prove that ‘digital transformation’ is more than just a buzzword. The ability to adapt to new technology could make the difference between a business that thrives and a business that doesn’t survive. Where will your business land?
Interested in how BrainStation can support your company’s digital transformation? Visit BrainStation’s Enterprise Training page.