Happiness And The Art Of Digital Transformation

Mark Osborn

Do you know what it takes to be happy? And is your definition of happiness the same as your friends’, neighbors’, or colleagues’ definitions?

I recently read an article in which the author cited research showing that, despite the considerable body of literature on the topic, happiness remains elusive. And for most, pursuing what’s supposed to drive happiness, like health, money, or social connections, only reinforces the gaps between how people feel now and the “happy” state they want to achieve.

The article’s author posited that perhaps the happiness industry needed to shift its perspective. Instead of promoting true happiness as an objective, they should describe it as an outcome.

Reading the article, it struck me that we could have a very similar discussion about digital transformation. Almost everyone says they want to do it. Yet very few are certain about how to go about it. And almost no one would say there’s a consensus definition of what it is.

What’s more, most conversations on digital transformation seem to be focused on an elusive end state, where a company emerges fully transformed following IT-related systems upgrades and new technology adoption, often through considerable effort, expense, and, potentially, business disruption.

Like the happiness discussion, these conversations only reinforce the gaps companies perceive today versus where they think they need to be, creating anxiety, uncertainty, and even digital transformation fatigue.

But what if we shifted the conversation away from “how do you transform?” to “what do you want to achieve?” We, too, might find that using a tangible new opportunity to drive transformation, rather than the other way around, is more practical and less daunting. We also might find that meaningful transformation can result from smaller, lower-cost tactical activities just as it can from larger, more strategic, and higher-investment initiatives.

To that end, perhaps we can reconsider what digital transformation means and how consumer products (CP) companies can approach it by examining various categories of strategic intent, from the least disruptive and lowest cost to the most investment intensive.

1. Differentiate

Technology advancements are creating entirely new opportunities for CP companies to re-imagine how they can differentiate themselves from the competition by defining a new or different competitive stance. This could include redefining opportunities for consumer engagement via mobile apps or social media, creating partnerships to leverage data to improve segmentation and targeting, or redefining “products” themselves to include information, services, value-added content, and offers.

We’ll explore this further in upcoming blogs, but in each of these cases, relatively minor investments can often create significant transformation opportunities. What’s more, those investments can often be made against specific initiatives, with little or no implications for larger enterprise operations or disruptions to other business processes.

2. Disturb

Here, CP companies reimagine or redefine a business process in order to create an entirely new way to compete in the market. In so doing, they disturb the established order and represent a new category of competition that other incumbents may find challenging to emulate.

For example, some newer CP companies are bypassing traditional retail channels to instead engage with consumers directly while leveraging technology to enable dramatically improved targeting and personalization. Some are using 3D printing to empower consumers to create the product that they want, in the moment they want it, right in their homes. Others are using subscription and replenishment services to engage with consumers and deliver the products they need, directly to them, when they need them.

3. Displace

Here, companies are completely redefining themselves, reframing the categories in which they compete, and, in the process, displacing traditional competitors.

For example, companies are reimagining single-use smart-home devices as whole-home automation devices, changing both the category and how they define themselves. Likewise, some CP companies are expanding the definition of their offering beyond the physical product itself to include partnerships, content, and services that can deliver new revenue streams in spaces that wouldn’t have been possible just five years ago.

4. Disrupt

The most robust form of digital transformation involves creating entirely new business models that fundamentally alter industry operating norms.

We’ve already seen this occur in several industries in recent years. Ride-sharing and home-sharing companies, for example, have disrupted the transportation and accommodation industries. And streaming-media services have done the same thing in the media world, including shuttering brick-and-mortar chains that long dominated the home entertainment marketplace.

Next: Digital transformation in action

These categories show that digital transformation opportunities abound and can result from investments and initiatives, big and small, disruptive and non-disruptive. I’ll be diving deeper into each of the “four D’s” of digital transformation, by highlighting how CP companies have found success with them, in my next two blog posts.

Discover more about how digital transformation can work for you by visiting Consumer products: Reimagined for the new economy.

About Mark Osborn

Mark Osborn is Vice President of Digital Strategy and Business Planning for Consumer Products at SAP. He focuses on strategy and thought leadership development, strategic growth initiatives, and operations and go-to-market planning. Prior to his current role, Mark was the global lead for the Consumer Products industry marketing for SAP. He holds a BA from Washington University in St. Louis, Missouri, and an MBA from the University of Minnesota, Carlson School of Management.