Lessons from the frontline
Welcome to my Digital Transformation blog. Currently, I am the Chief Digital Officer and VP, Digital Platforms at IBM. In this role, I help a fairly diverse portfolio of IBM offerings leverage the power of digital platforms to improve product experiences and innovate on go-to-market. When offerings succeed at this, it inevitably results in a rethinking of their business models. It opens up interesting discussions around pivoting to a subscription model (from perpetual licenses). It provokes product leaders to rethink how products can be built more like lego blocks and thereby shorten product release cycles. It encourages marketing and sales to extend beyond their traditional operational boundaries. It demands that teams adopt a new way of working — more agile, more data-driven, and much more experimental. Over the past five years, I have been on this journey with over 50 offering teams — sharing successes and failures with them. I hope to share some of these perspectives with you.
Digital Transformation is now considered an important priority in every organization across every industry. For most organizations, the 2020 pandemic forced “five years worth of digital transformation in five months.” But it wasn’t always this way. Back in 2015, when I started talking to teams about the need to digitally transform, I would be lucky if they didn’t immediately hang up on me or politely mention that it wasn’t among their top 20 priorities for the year. Most product teams thought digital transformation had something to do with marketing — wasn’t it about using social media to generate more leads? In a few years, we have come a long way in developing an understanding of what digital transformation truly is — but we still have many misconceptions to address. For one, many still believe that digital transformation is mainly a technology-centric transformation — something on the side that the “IT folks” can do. There is also a common misconception that digital transformation is only relevant to some kinds of products — more for consumer-centric products but less important for B2B products. In my role as CDO, I have busted these myths and still continue to do so.
For me, digital transformation is really about new ways of engaging with customers. It is about building new experiences and dramatically improving existing ones. When a product experience becomes exceptional, it creates viral loops that open up new growth opportunities. Early on, the product experience — in the form of demos, trials, freemium — becomes a great way to drive customer acquisition. This “product-led” approach changes the go-to-market from “telling” to “showing.” This leads to more word-of-mouth sales and more social proof, and it generates a viral selling loop that dramatically reduces the cost of customer acquisition. Rapid growth ensues.
The second viral growth loop occurs when exceptional product experiences leads to more product usage from existing users. This results in a rapid growth in the volume and value of subscriptions. This foundation is now in place for the third viral growth loop. This is when communities and ecosystems start forming around the product. Mature communities and ecosystems drive this phase of growth. At this point, the product starts to resemble a platform and market dominance is within reach. To me, that is the ultimate goal of any digital transformation. At the heart of every digital transformation is this journey that products need to take.
..but obviously getting there is not easy and is full of pitfalls. My hope is that through this blog we can start a conversation and share experiences from the frontline.
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