When people tell you your business needs to be “digital” just what does that mean? We know digital is not a person, place, or thing (a noun). Digitally is an adverb describing how a business uses digital – They serve their customers digitally. So can we think of a company as being a digital company? Yes, but what is required to be a digital company?

There have been plenty of blog posts explaining digital’s relevance to using 0s and 1s. And some that try to explain what a business needs to do to digitizeMan figure hiking up steep hill with brigth orange and yellow lights, with "eps" behind him, CUSTOMERS he is focused on and cash at the top surrounded by bright yellow light their data. And a few have gone as far as to relate digital processes as a means to create a better customer experience.

I just read Ram Charan’s latest book RETHINKING COMPATITIVE ADVANTAGE. If you’ve read it you understand that digital is not a noun. Digital is not digitizing your company’s data and calling it a day. Furthermore digital businesses are strikingly different in many ways to traditional businesses. Even  the traditional companies who have “digitized” their data. Digital describes a company’s attitude, business model (or as Ram refers to it their “moneymaking model”) and their single focus on the end customer. That means if you operate as a B2B business you need to pivot your focus and start behaving like a B2C company.

I found one quote from Ram’s book that describes a digital company the clearest. “… very few organizational layers, high-quality, high velocity decision-making…, continuous innovation, superb execution, and laser focus on aligning the company’s efforts with serving the customer better.” (Source: RETHINKING COMPETITVE ADVANTAGE, RAM CHARAN and GERI WILLIGAN. PAGE 133)

When we talk about serving the customer better too often people find it easy to buy products or services from a company using state of the art digital technology only to see their cortisol levels spike when they need help to resolve an issue or have the need to speak to a real human being. So serving the customer better entails the end-to-end experience; not just the sale!

To take the discussion further, if you are engaged in or planning a “digital transformation” do not think of this a s an IT Project. It must be a change to the way your business operates, competes (see chapter 5 in Ram’s book on Ecosystems), serves consumers, and manages cash flow. The metrics must also be different, where Cash is King is still important, but EPS surprisingly is at least less urgent.

Listening to Ram speak and his insightful books have been an inspiration. Thank you Ram!