“Every Company is a Tech Company Now. The Disruption is Just Beginning”, wrote Edward Felsenthal, TIME Editor-in-Chief and CEO in May this year:
“The scope and speed of change was unprecedented, accelerating digital adaptation by as much as five years in a 12-month period. Disruption ruled, as legacy companies imploded. … Nearly every business has become a tech business, one reason stocks have soared even as the pandemic devastated lives and livelihoods across the globe.”
This article is written by Isabel Wu from Meta Management and covers all things digital. Meta Management is a consultancy specialising in helping its clients with the organisational assets that drive effective digital transformation and create value in a hyper-connected, constantly changing world.
It has been a recurring theme ever since Watts S. Humphrey explained “why every business is a software business” in his 2002 book Winning with Software: An Executive Strategy.
Microsoft CEO Satya Nadella at the 2015 Convergence Conference: “Every company is a software company. … It’s not about one simple software solution. It’s really you yourself thinking of your own future as a digital company.”
To a Fox Business reporter who asked Under Armour CEO Kevin Plank, “You’re an apparel company. What are you doing at [technology convention] CES?” Plank replied, “We’re technology company and anybody who is going to live in the future better be there.”
In 2016, TechCrunch warned, “Every company is a technology company, but most don’t behave like one.”
The Wall Street Journal in 2018: “There was a time when the primary role of leaders at most companies was management. … But now we’ve entered a period of upheaval … affect[ing] the world of business so profoundly that every company is now a tech company.”
When I work with clients, I always ask them, “What business are you in?” To date, none has replied “software” or “technology”. It is usually the more traditional, say, “toy company”, “licensing agency”, “FMCG manufacturer”, “consulting firm”. They use — not make or sell — technology, and so their view is they are no more a “technology company” than their use of accounting systems makes them an “accounting company”.
However, identifying as a “technology company” is not just because the label might play well in marketing.
Identity is a socio-cognitive construct that comes from the human instinct for order and to belong. People are motivated to things that move them closer to — and avoid those things that move them further from — how they see themselves, and the proficiency that results becomes part of their identity.
As the forefront of competition shifts decisively to digital, organisational proficiency must reflect how and where companies compete, not just what they make or sell. They are still a toy/licensing/consulting company, but they must also become a digital one.
How to be a “technology company”
- Digitise services.
Digital technology makes it possible not only to embed services into products, it can also turn service into a standalone product. For example, the lay-by service stores once offered is now a digital buy now, pay later product.
- Digitise customer experiences.
Whether through online reviews, 24-hour communication, searchable videos as product manuals or real time delivery tracking, customers increasingly expect interactions to take place anywhere they use their mobile devices.
- Digitise the workforce.
It’s not just Zoom meetings and cloud storage giving worker access to remote work. It is the restructure of work to account for real time access to information. It is technology simplifying, improving or replacing many workflows, and allowing teams to work asynchronously (not all having to be in the same place at the same time).
- Digitise mindsets.
The digital mindset is less a way of doing things as it is a way of seeing things. Technology’s ability to offer new and better ways to do business is irrelevant if you do not see solutions in digital terms.
All companies become digital companies when they use technology to make them better than their competitors at creating, capturing and delivering value to their customers.