How to Transform Traditional Businesses into Digital Leaders: The Essence of Digital
Similar to the terms “the cloud” and “big data,” the term digital is often misunderstood and seemingly limitless in scope. It can impact business strategy, user experiences, marketing channels, technology platforms, product development, human resources, communications, customer services, operations, and so on.
In short, any technology that connects people and machines with information or each other is digital, which means digital has become essential to every department in every business. When you’re defining digital, it’s a broad business concept, not just an emerging technology concept. Digital impacts most aspects of most businesses, including sales, marketing, customer service, operations, finance, supply chain, human resources, and so on.
Industrial Revolution Similarities
Digital is still in the early stages of what in the future could be looked back on as a change on the scale of the Industrial Revolution, when emerging technologies, new business models, and new processes of the time dramatically changed business, the environment, and society for the better. We believe digital is really today’s Industrial Revolution that could have a similar order of magnitude impact on business, the environment, and society when it reaches maturity. Before getting into defining that digital is today, it may be helpful to explore the Industrial Revolution and compare to what is going on today in digital.
History is repeating itself, doing the same thing to the world with the “digital revolution” that the Industrial Revolution did with machines. The thing about the Industrial Revolution and the Digital Revolution is that while technologies change, people don’t. The same dynamics that brought about the Industrial Revolution have brought about the Digital Revolution.
What most people know about the Industrial Revolution was that it created more products faster, more economically. Sound familiar? As we mentioned before, digital is about immediacy and satisfying what people always want—“faster, better, and cheaper.” Even in the 1700s people wanted things faster, cheaper, and better.
The Industrial Revolution of the 1700s was similar to the Digital Revolution of today in that it impacted practically every phase of people’s lives, created a higher standard of living, and brought about a lower cost for manufactured goods. It impacted social and economic change. Most importantly it forced people to think differently about how they engaged with the world. Before the Industrial Revolution, life was hard—it was about subsistence 24/7. One of the user needs that kick-started the Industrial Revolution was a pretty basic human one—clothes.
Prior to the Industrial Revolution, the average person may have owned a fraction of the clothing the average person would after. Cloth was a real luxury because cotton or wool had to be carded by hand, then spun by hand on a spinning wheel, and then put on a loom and woven by hand, before becoming fabric which was then sewn by hand. The entire process was very labor intensive.
Along the way to the birth of the Industrial Revolution, a series of innovations in the cloth manufacturing and thread spooling process were invented. These new technologies required less human energy, making fabric production easier, faster, and cheaper. Perhaps the greatest innovation at this time was the invention of a spinning engine called a Jenny (short for engine) in 1764. The Jenny enabled sewers to produce multiple spools of threads simultaneously, making the weaving process easier and faster because with more thread more people could weave more because they weren’t spending weeks spinning thread. This gave them time to sew. In modern terms, we’d call this, “enhancing the consumer’s experience.”
Only 10 years later when James Hargreaves, the Jenny’s inventor, passed away, there were more than 20,000 spinning Jennys in use across Britain. From here, other inventors improved upon Hargreaves’ Jenny—producing bigger, faster, and cheaper models to operate spinning engines. Around the same time, someone else invented the power loom that mechanized the process of weaving cloth.
Someone else invented the steam engine and the process for casting iron, and then there was the invention of the telegraph, the stock exchange, and the railroad system. All these fantastic innovations ultimately contributed to what would become not only the fabric industry but the start of the Industrial Revolution. Everyone who invented something did so to solve a problem they were experiencing in their particular industry. But one person, Sir Richard Arkwright, an Englishman, saw the big picture and used what he saw to transform the world. Today we call him the “Father of the Industrial Revolution.” Why?
Arkwright combined new technology, power, machinery, semiskilled labor, and the new raw material (cotton) to mass produce yarn. The fact that Arkwright combined new and existing technologies to produce what essentially became the first factory is why he’s called the Father of the Industrial Revolution. This is a simple but, critically important, fact to remember because the ability to see, combine, and implement different technologies and processes is exactly what drives digital transformation.
Like the inventions of the Industrial Revolution, digital technologies are enabling businesses to transform themselves and do things in better way than before. The combinations of digital technology along with the new creative thinking around business that digital enables, allow us to create faster, cheaper, and better services and products. Companies can now replicate what Arkwright did for the world within their own industry—leveraging emerging technologies to create a better company. By creating their own industry-wide revolution, they bring innovation to a static economic ecosystem.
Just as the “Jenny” didn’t exist in the early 1700s, the Internet didn’t exist in the 50s. Someone invented the Jenny, then a mechanical loom and a way to cast iron tools, a transportation system, a delivery system, and so on. A couple of hundred years later someone invented the Internet, RFID chips, and then the smartphone and social media. The technologies kept changing, but the people didn’t.
People always want and do find a way to do things better, faster, and cheaper. That was true 250 years ago during the beginning of the Industrial Revolution, and it will be true 250 years from today, arguably the early stages of the Digital Revolution.