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The Digital Transition: Adapting to Innovation

Devin Ferreira | June 19, 2019

digital transitionA couple of years ago I was reading the book The Tipping Point by Malcolm Gladwell and thinking about the various categories of users for a given product or technology based on the Diffusion Theory of Innovation: Innovators, Early Adopters, Early Majority, Late Majority, and Laggards. Really, I was wondering where on this spectrum I might fit as a consumer. I definitely wasn’t an Innovator—being a “trendsetter” isn’t something I’ve ever been particularly known for or interested in—and probably wasn’t an Early Adopter, either.

What about the Early Majority? Surely, I was young and hip enough to at least be at the forefront of the average slice of society. But then I had to look at the evidence: I had owned a Nokia phone until 2012. I didn’t have my own BitMoji avatar. And apparently I had completely missed the boat on no-show socks until it was too late. All of this led me to the conclusion that I might be even less trendy than I had originally thought.

So, what was I left with? Late Majority and Laggards? I didn’t like either of those options. One felt like the category belonging to my parents’ generation, and the other felt like the category of my grandparents’, the one group reluctant to adopt new trends and technologies, the other uninterested in doing so.

This was troubling, to say the least, and it only got worse when one day I asked my friend what “that thing-a-ma-jig” was she had plugged into her TV (it was an Amazon FireStick). The look I received in response was one I’ll never forget.

To Adopt Is to Adapt, To Adapt Is to Survive

For those of us who find ourselves in the Late Majority or Laggards’ groups, our attitude seems to be one in which we only adapt to advancements in our daily ecosystem when we’re forced to do so by external factors.

To give an example: I had avoided using my bank’s app to make mobile deposits, even though I was aware that this technology existed, and my bank no longer had any brick-and-mortar branches in my area. Instead, whenever I’d receive a check, I’d simply give it to my wife so she could deposit it (using her phone) into our joint account, which was with a different bank.

It was only when my original bank decided to change my free checking account to a one-deposit checking account–requiring me to make at least one deposit a month to avoid the $10 fee–that I decided to look into this whole mobile-deposit thing.

As it turns out, it’s pretty great, and ridiculously simple to use. And so, as I sat there, depositing check after check with nothing but my iPhone, I couldn’t help but wonder: why had it taken me so long to adopt this innovation that clearly made my life more convenient?

Typical of “why” questions, there’s no simple answer. It involves some combination of skepticism, laziness, and an “if it ain’t broke, why fix it?” outlook. As an individual consumer, this type of approach won’t get you into too much trouble. After all, I wasn’t “falling behind” my peers for not having an Amazon FireStick, and I hadn’t lost any money by not adopting the mobile banking app (just time out of my day to occasionally go to the bank, and perhaps bit of my wife’s patience).

But for a business, maintaining a resistance to innovation trends and the digital transition can actually mean the difference between being a market leader and a market failure.

Innovation Now

In other words, adapting to innovation isn’t just helpful to strategic success—it’s necessary. This fact has assumed an even greater sense of urgency with the digital transition that’s been growing over the past decade.

From mobile apps to cloud computing, from data analytics to artificial intelligence, digitally-driven strategies and solutions have increasingly become the norm in determining market success and the means to achieve it. This is seemingly true regardless of industry. Just take a look at some recent statistics:

  • In 2006, only 1 of the top 10 most valuable companies in the world was data-driven. In 2011, the number at risen to 4 out of 10. In 2017, it was 6 out of 10, with the top five all being data-driven.
  • A Gartner, Inc. survey revealed that 75% of organizations increased their customer experience technology investments in 2018. Moreover, 52% of respondents are intending to increase funding for customer analytics in 2019.
  • According to a Digital Transformation Report by PointSource, 94% of executives surveyed claimed to have increased focus on digital growth, with an eye-opening 90% saying digital is one of the main drivers of their business goals.
  • In 2017, Dresner Advisory Services conducted a Big Data Analytics Market Study and found that 53% of all companies interviewed had adopted a Big Data approach to business, up from 17% in 2015.
  • The International Data Corporation (IDC), one of the world’s leading market intelligence firms, predicts that by 2022, worldwide enterprises will be spending $2 trillion on technology in service to digital transformation initiatives.

In other words, the wave of digitally-driven strategies isn’t just upon us, it’s already arrived, and it’s moving quickly.

Companies that fail to adapt now risk sliding into the Late Majority category of the digital transition, falling significantly behind their competition or worse—becoming antiquated, obsolete entities. It’s understandable, then, that as manufacturing and distribution channels become more data-intensive, researchers are uncovering a growing correlation between data-driven decision-making (DDD) and overall performance.

Now, as we’ve discussed in previous blogs, much of the attention with DDD has involved the harnessing of Big Data for advertising purposes, with a strictly dollars-and-cents intention in mind. But as with my mobile banking app, these innovations are just as likely to improve the customer experience (CX), helping companies provide actionable insights and tangible benefits to their customers.

The overlap between these two business objectives—improving profit margin and improving CX—is something that a digitally-focused strategy can certainly enhance. But it’s not a given. Understanding who your customers are and adapting to their needs also plays an important role alongside the technology and tools designed to support that adaptation into the digital transition.

Conclusion

At HMI, we recognized this changing landscape years ago—long before I as a consumer began more rapidly adopting innovation in my own life. It’s why we first implemented our proprietary program analytics technology, R-Cube, and why we decided to expand our Business Intelligence capabilities even further by developing Snap2Claim, an enhanced data capture tool that not only compiles customer data in ways that can help our clients boost their organizations’ overall ROI, but also streamlines the customer experience by digitizing the sales claim process.

In this way, we’ve tried to incorporate both sides of the innovation curve into our corporate DNA, understanding that in this age of Digital Darwinism in the digital transition, if you’re on the tail-end of innovation adoption, it might already be too late.

Interested in digitally transforming your incentive program? Contact us to find out how a more digitally-driven performance improvement strategy can align with your existing business objectives and opportunities.

 

Sources

https://www.gq.com/story/no-socks-is-dead-long-live-no-socks

https://valuer.ai/blog/50-examples-of-corporations-that-failed-to-innovate-and-missed-their-chance/

https://www.bcg.com/en-au/publications/2017/digital-transformation-transformation-data-driven-transformation.aspx

https://www.gartner.com/en/newsroom/press-releases/2019-06-13-gartner-reveals-75–of-organizations-surveyed-increas

https://digital.pointsource.com/acton/media/21911/2018-digital-transformation-report

https://www.forbes.com/sites/louiscolumbus/2017/12/24/53-of-companies-are-adopting-big-data-analytics/#7f2673ae39a1

https://news.sap.com/wp-content/blogs.dir/1/files/SAP-Partner-World-IG_UPDATED.pdf

http://ide.mit.edu/sites/default/files/publications/IDE%20Research%20Brief_v13_0.pdf

https://www.hmiaward.com/blog/the-customer-experience-and-big-data/

https://www.thinkwithgoogle.com/advertising-channels/video/audience-insights-and-data-roi/?utm_source=content-alert&utm_campaign=2019-06-10-twg-us-content-alert&utm_team=twg-us&utm_medium=email

https://www.cmswire.com/customer-experience/dont-confuse-digital-transformation-with-customer-experience/

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