- March 25, 2019
- Posted by: admin
- Category: Uncategorized
Digital discussions dominated the boardrooms of companies in 2017. Every company has embarked on developing a road map for their digital transformation. The toughest part of the journey is the implementation piece and its mostly not going as per plan. Change is such a difficult thing to swallow. Most companies underestimate the effort, investment and time needed to make this change possible. Lets take the case of the most successful digital story of the last five years – UBER. It is the undisputed leader and case study of how the digital transformation can have a profound impact on all the stakeholders (valuation of US$50 billion) and create new value for customers.
What is however the cost of making this change happen? In 2016, UBER reported net adjusted losses of US$2.8 billion on gross bookings of US$20 billion. This year many estimates suggest that the loss numbers will only double. The amazing UBER team of shareholders, management team and employees have collectively agreed to invest and lose such a lot of money in helping the world make this profound change. The change from ownership of cars to a usage based or consumption based model. This cost of driving a change in customer behavior is an expensive one. The same story applies to Amazon, SEA Group, GRAB, and every other digital disruptor.
Be prepared to make this financial commitment as you embark on the digital journey. Your investors have a big role to play in enabling this change. Key points to consider in your digital strategy:
- Financial strategy is as important as your digital strategy. It should enable and support your digital transformation. Be prepared to make the investment. You are up against competitors who may not need to demonstrate profits in the near team. They measure success in terms of how rapidly they are able to drive the change rather than the cost benefit of going digital.
- In addition to your management team, your employees, your SHAREHOLDERS need to support this journey. You need to onboard them on this journey. Several CEOs are beginning to lose their jobs as they struggle to make this happen. There is a disconnect between the CEO, the investors and the management team.
This applies to every digital project small or big. It applies to our digital careers as well. I am keen to hear your views on how you have embedded a more aggressive financial strategy into your digital one. Are there some examples of existing companies who have done a good job at managing this change and transition. Did any company even need to change their investors to be able to survive this digital storm?