Exuberance drives markets. It is a crucial element of change and innovation and it fosters creative risk-taking. However, bandwagons roll too fast and a lot of people try to jump them then the inevitable crash happens.
Is this what’s happening in today’s digital business arena? It is that there’s too much exuberance around digitalization? Does the digital optimism of today need a sober examination and reality check? These are important questions we need to ask ourselves. Here, we critically examine the concept of ‘irrational digital exuberance.”
What is Irrational Digital Exuberance?
Every business believes that it is in danger of being ‘disrupted’ by a digital competitor. For instance, a new venture encumbered by physical infrastructure such as legal systems can take over a sector. This fear drives optimism about how digital transformation can help safeguard long-standing organizations from disruption. With irrational disturbance, a company gets digital and achieves transformation. It becomes new, completely agile, and competitive.
That is the element of exuberance – it is a sense that we are all suddenly learning crucial facts and are gaining new enlightenment.
Exuberant Optimism and Pragmatic Optimism
Just like any other new era, businesses need to remember that this is a regular ‘hype-phase’ that’s similar to all new eras. The exuberance about digitalization is built on the hype from individuals selling the digital infrastructure.
People are anxious about disruption. They look at what their peers are doing and tell their IT guys that they want one of those, without knowing why they want to go digital. To succeed in digital transformation, a business needs to start with a strategy then match the technology to the outcome they are looking for. Step back and figure out critical areas in your company where digital can affect, then start from there. Take the time to analyse your business and find a few areas to start your transformation in.
With the hype around digital technology and suppliers everywhere are trying to sell their customers their inventions, businesses must avoid buying stuff that they don’t need. The hype will make you want to go too quickly but thinking everything through will ease your urge to jump on the bandwagon.
Strive for 2020 But Still Work in 1999
To ensure successful digital transformation, businesses need to step back, understand where they are and where they need to go. It’s natural for top management to get frustrated when digitalization doesn’t work. They are implementing digital transformation but are working with infrastructure that seems slow to change. It is like they wish to deliver 2020, but they feel like they are still working in 1999.
The most important thing is that companies understand that digital transformation isn’t an ‘all-or-nothing’ idea. It is something they can do incrementally. A great way to ensure its success is to make good use of the new but maintain the old as long as they need to.
The Realism of Digital Transformation
To turn pragmatism into practical steps, businesses need to consider three elements: their digital insight, their digital backbone, and their omnipresent channel.