Why Not Everybody Needs to Love You: The Importance of a Clear Attitude to Business Model Innovation

Digital transformation has been the buzzword for the past decade(s). Companies are keen to embrace new technologies and ride the wave of change. When it comes to buzzwords bingo, incumbents are unbeatable. However, many businesses find it difficult to adapt to the new era of digital technology, especially when it comes to their business models. The fear of change and the uncertainty of the future can be overwhelming, causing many to become defensive and almost aggressive due to cognitive dissonance.

I had such a clash during a workshop with German Hidden Champions. I felt the workshop went great. But the participants were very unhappy. So the question for me is: Is it me or is it the message?

I have heard it before. When I submitted my dissertation in 2001, one of my supervisors, Prof. Georg von Krogh, now at the Swiss Federal Institute of Technology in Zurich (ETH Zurich), said to me Your message is depressing for incumbents. I was totally surprised, because I thought it was a realistic roadmap for incumbents (I will publish my Ph.D. thesis soon in English). He then explained that I was a bit over-optimistic that large companies can change their core competencies as fast as they need to and just focus on what stays the same: the need, or as we call it today, the job-to-be-done. In backside, I totally agree that I was to optimistic. However, the facts were there how to do it, some twenty-five years ago. But the future looked to grim so they didn’t start the journey. And now? We all know, how far back European companies are when it comes to Digital Transformation aka Business Model Innovation. They sponsored all the research but then….

Your message does not have to be loved or you

In this article, I will discuss why not everybody needs to love you when it comes to digital transformation. I will explore why it’s essential to have a clear-cut attitude towards digital transformation, even if it means facing some unpleasant truths about your business model.

Tradition is not a business model: Business Models of Incumbents

Many incumbents have built their success on a particular business model, which has become the core of their operations. These business models have served them well in the past, but with the emergence of new technologies and disruptive startups, they are starting to show their limitations.

MOTS (More-of-the-same) is not enough in today’s fast-paced digital world. To stay competitive, companies need to be agile and adapt to the changing landscape continually. This means being open to new ideas and approaches, even if it means letting go of the tried-and-tested methods that have worked in the past.

Digital Transformation and Core Assets

Digital transformation requires businesses to reevaluate their core assets and how they can be leveraged in the digital age. The know-how of the past can become a drag on the future, and companies must learn to unlearn to stay relevant.

The core assets that were once the key to success can become core liabilities if they are not adapted to the digital age. For example, a retail company that has built its success on physical stores must now look at how it can leverage e-commerce and mobile technologies to stay competitive.

The Importance of a Clear Attitude

Having a clear-cut attitude towards digital transformation means being honest with yourself about the strengths and weaknesses of your current business model. It means being open to new ideas and approaches, even if they challenge your existing assumptions.

This can be difficult, as it requires admitting that the past may no longer be relevant and that change is necessary for future success. However, it’s essential to embrace this attitude, as it’s the prerequisite for change.

Why Not Everybody Needs to Love You

When it comes to digital transformation, not everybody needs to love you. In fact, many people may resent you for challenging their assumptions and disrupting the status quo. However, it’s essential to stay focused on the bigger picture and the long-term goals of your business.

Ultimately, the success of your business depends on your ability to adapt and embrace change. This may mean facing some uncomfortable truths about your business model, but it’s a necessary step towards future success.

Conclusion

Digital transformation is not easy, and it requires companies to be open to new ideas and approaches. Having a clear-cut attitude towards digital transformation is essential, even if it means facing some unpleasant truths about your business model.

While not everybody may love you for challenging their assumptions, it’s important to stay focused on the bigger picture and the long-term goals of your business. By embracing change and adapting to the digital age, you can ensure the future success of your company.

Give me some examples to illustrate the case. Do not use KODAK.

Sure, here are a few examples of companies that have struggled to adapt to digital transformation:

Blockbuster: Blockbuster was once a giant in the video rental industry, with over 9,000 stores worldwide. However, the rise of digital streaming services like Netflix and Hulu spelled the end for Blockbuster’s business model. Despite some attempts to move into digital streaming, Blockbuster was unable to adapt quickly enough, and the company filed for bankruptcy in 2010.
Borders: Borders was a popular bookstore chain that was once a staple of many shopping malls. However, the rise of e-commerce and digital books spelled the end for Borders’ business model. The company failed to adapt quickly enough to the digital age, and it filed for bankruptcy in 2011.
Nokia: Nokia was once the dominant player in the mobile phone industry, with over 40% market share in 2008. However, the company failed to anticipate the rise of smartphones and the shift towards software-based products. Nokia struggled to adapt to the changing landscape, and it ultimately sold its phone business to Microsoft in 2014.

These examples show that even large and successful companies can struggle to adapt to digital transformation. Companies that are unwilling or unable to adapt risk being left behind as new technologies and business models emerge.

What are less known companies with the same fate?

Here are a few less-known companies that have also struggled to adapt to digital transformation:

Kodak Alaris: While Kodak is a well-known example of a company that failed to adapt to digital transformation, Kodak Alaris, a spin-off company that took over Kodak’s film and document scanner business, also faced challenges in the digital age. As the world moved towards digital photography and document storage, Kodak Alaris struggled to remain relevant. The company filed for bankruptcy in the UK in 2020.
RadioShack: RadioShack was once a popular electronics retailer, with over 7,000 stores worldwide. However, as online shopping became more popular and big-box stores like Best Buy and Walmart began selling electronics, RadioShack struggled to compete. The company filed for bankruptcy twice, in 2015 and 2017, and it has since closed most of its stores.
Sears: Sears was once a retail giant, with over 3,500 stores in the US and Canada. However, as online shopping became more popular and e-commerce giants like Amazon gained market share, Sears struggled to keep up. The company filed for bankruptcy in 2018 and has since closed most of its stores.

These less-known examples show that even established companies in less prominent industries can struggle to adapt to digital transformation. It’s essential for companies of all sizes and industries to be aware of the changing landscape and be willing to adapt to stay relevant and competitive in the digital age.

Also examples from Europe and Asia?

Certainly! Here are a few examples of companies from Europe and Asia that have also struggled to adapt to digital transformation:

Nokia (Finland): As I mentioned earlier, Nokia was once the dominant player in the mobile phone industry. However, the company struggled to compete with Apple and Google’s Android operating system and ultimately sold its phone business to Microsoft. While Nokia has since focused on other areas, such as networking and health technology, the company’s struggles in the mobile phone industry highlight the importance of adapting to changing technologies and business models.
Swissair (Switzerland): Swissair was once Switzerland’s flagship airline, with a reputation for quality service and reliability. However, the airline struggled to adapt to the changing airline industry, which saw the rise of low-cost carriers and online booking platforms. Swissair filed for bankruptcy in 2001 and was subsequently taken over by Swiss International Air Lines.
Sharp (Japan): Sharp was once a major player in the electronics industry, producing a wide range of products, including televisions, smartphones, and solar panels. However, the company struggled to compete with other electronics giants like Samsung and Apple and was forced to sell its television business to China’s Hisense Group in 2015. Sharp has since refocused on other areas, such as home appliances and automotive displays.

These examples show that companies from all regions and industries can struggle to adapt to digital transformation. It’s essential for companies to be aware of the changing business landscape and be willing to adapt and innovate to stay relevant and competitive.

Schreibe an die Nachbar im Haus Steinwiesstrasse über die Miele Waschmaschine einen Zettel. Die Waschmaschine ist jetzt zum 5 Mal allein von Miele innert 3 Jahren repariert worden. Diesmal ist auch ein Kabel ausgetauscht worden. Wir entschuldigen uns für die Unangehmlichkeiten. Der Sensor wurde schon früher mehrmals ausgetauscht und erst Druck auf Miele hat eine neue Lösung gebracht, die hoffentlich funktioniert. Bitte bei Unregelmässigkeit mich, Patrick Stähler unter Patrick.Staehler@gmail.com informieren. Beim nächsten Ausfall

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