David Rogers, Columbia Business School

My name is David Rogers. I teach at Columbia Business School in New York City. I teach in our executive education division, so I actually get to work with executives from countries all over the world. What I focus on is digital technology and its impact on business. But I also teach a program focused specifically for marketers, digital marketing strategy, looking at how the discipline in the field of marketing is evolving and transforming so rapidly in the digital era. What are your thoughts on this? I see in a lot of companies, very often marketing has led this sea change. Well, they've been the ones who identified and responded to it first. That's not surprising. I really see the role of marketing in any organization is fundamentally actually to keep that organization focused on the customer. Now your specific remit may include more communications or demand generation or helping to shape product innovation services, but fundamentally in terms of the organizational perspective, your job if you are the CMO or if you're the marketer in the company is keep that organization really understanding what is happening in the lives of the customers. So it's not surprising that the marketers were the ones who, in my experience, sort of caught on first and started to see this incredible change happening in the market in terms of customer behaviors, how they are relating to organizations differently, how they are expecting different things, the kinds of experiences that they are responding to is very different. So I've been working, I've been teaching at Columbia with marketers and looking at this sort of intersection of brands and innovation and technology for years. I actually have a conference I started 10 years ago called the Bright Conference, Brands, Innovation and Technology. So I think marketers have sort of led the charge and what's happening now is, so first it was a matter of oh we have to change marketing and then there was kind of a wave where we started to realize we have to change the boundary of marketing. Marketing cannot be as sort of clearly defined in the organization as it was in the past. For it to operate in the digital era it has to get into everything. This is touching corporate communications and PR and customer service and product design and go to market distribution channels. Now am I going to sell directly to consumers? So that was the second sort of wave if you will in terms of organizational change was the marketers sort of said we can't just redefine what we've done in the past, we actually have to redefine our boundaries. And now what's happened is that leadership throughout the organization has realized that this change has to happen and it has to be pervasive throughout. And so you're looking at companies where even the chief financial officer and these kinds of people are saying yes we understand we need a digital strategy or a digital transformation. Businesses are hiring people like creating titles such as chief digital officer and it's really taking a more sort of fundamental pervasive strategic impact. That's a great question and I think it's important that we not have a sort of uniform answer. You know where you get started on your digital transformations really depend on your business, your business strategy. What is happening with the lives of your customers? You know when I teach at Columbia, when I work with and advise companies I try to help define what is going on and really how organizations have to learn to think differently in order to enable digital transformation. The technology is not the hard part, it's actually changing your strategic thinking in the organization. So thinking differently about customers, thinking differently about competition, about the role of data in your business, about innovation, how you manage innovation and the risk of innovation and value. What is your value to the market, to your customers, to the world? Why do you exist? And the fact that that value proposition is going to be evolving very rapidly in the digital era. It's not going to be something that's going to be static over time. So I try to get companies to focus on thinking differently, understanding how they need to think differently about their strategy and their business. And then to really assess depending on where you're at, what is the first move, what are the areas that need the most immediate attention. You don't want to start something, a planning from sort of a technology first basis saying what's our Internet of Things initiative or what's our big data, we need a big data plan. Well maybe you just need an analytics plan and basic data plan, a strategy before you figure out what the opportunities for your business might be of a big or I would call it unstructured data. But the whole point is to not sort of start with like all these things that are kind of swirling around you at marketplace, but really start with understanding your business and figure out what are your strategic priorities and objectives going to be. We often think about digital transformation in terms of the idea of disruption, right? That everyone is going to be disrupted. In fact, you go to conferences in California and you'll hear that don't even try to transform. The Ubers are going to rise up and eat you all. These old companies are dinosaurs, which I fundamentally don't agree with. I think it is possible for businesses to transform. I've studied the ways that they do. Certainly we have many cases of companies that fail to respond and they are not able to shift their thinking about their business and even though they start in a real leadership position they wind up on the wrong side of history so to speak. But I think the hardest part is actually recognizing the need to change and then it's internal. How do you actually mobilize the organization? How do you enable the company to think differently about its opportunities and its threats? Its competition is typically not your traditional symmetric competitors, I would call them, which are from your own industry, have the same business model as you. A lot of companies now have to think more about what does your asymmetric competition look like? Who has a completely different business model than you but is offering a competing value proposition to your customer. So if you can learn to assess your challenges differently, assess your opportunities, really see where your customer needs are going, it's about looking at all the change around you and instead of asking the defensive question, how does this affect my business, which is very natural but it's inherently sort of defensive, instead look at all the change happening and new technologies emerging and ask yourself how could this give me the opportunity to create new value for the customer in ways that weren't possible before. It's definitely not too late. If you're still in business it's not too late. If you've already gone bankrupt then maybe it was. No, I think the important thing is to start now and to really start with where your business is, not try to do everything at once. Again, that's the important point as I talk about of really assessing your gaps and your strengths and where you are in regards to the marketplace, competition, customer needs and so forth and figuring out what are your biggest priorities. You don't necessarily need to change everything at once. It's important to take a broad view and then really understand, look, what's the opportunity we're going to go after? We're not going to go after every opportunity. We're an existing business, we have certain assets, we have certain skills, things we're good at, things we're not as good at. Figure out which of the opportunities you're going to focus on first and get moving on those quickly. Don't wait for perfection. Big organizations are used to the five-year plan. They're used to the big launch, well we can't go into a market unless it's huge and there's a giant investment. You need to learn to think much more experimentally, run very quick tests, develop ideas on a much shorter time cycle. In order that, obviously not everything you try is going to work perfectly, but you need and waiting until you've sort of put together a master plan, you need to start generating and enabling people in your organization to generate ideas for where your digital strategy could be leading you and then very quickly start to get out there and start testing them and figure out which of those opportunities are going to pan out. Some of them will and some of them won't, but if you wait to somehow think you're going to figure it out in a meeting room with enough PowerPoint slides and discussions in a boardroom, it's not going to happen there. You've got to start getting out there and really getting in front of the customer and seeing where the opportunity really lies for you. Yeah, managing innovation, sort of early stage venture style innovation, which really trying to experiment and trying new business models, new products that haven't been tested yet, is a challenge for large organizations. They are not structured typically around that kind of innovation. And that can be further compounded if there is a cannibalizing effect. So if you see a potential opportunity for a new product or service, maybe a new go-to market strategy, even a new business model, which if it succeeds is going to inevitably cannibalize at least somewhat from your existing business, then that just adds a further organizational tension. You know, this is why some companies like Barnes & Noble, when they first saw the internet taking off, people buying books online, they said, well, we're going to create an online division as well as our traditional brick and mortar stores, but they actually ran it for a while as a separate company because they were concerned that if they kept it in house in the same building that just naturally the organizational forces of the mothership would just crush and sort of get in the way and slow down this new innovation. There's always a tension. There's not a perfect balance, a perfect solution, but there's always a tension between taking your innovation outside, keeping it more insulated from those kind of forces. But then if you insulate it too much and separate it too much, the challenge is how do you integrate it back in? When you actually have an idea or a product or service that's working, how do you actually bring that inside the organization so that you can scale it up? Versus, on the other hand, if you run it all from the inside or you try to change the whole organizational culture of everybody at once, you may get mired down and simply feel you're not getting the momentum and the speed you need. So there are different models on sort of a spectrum. The one extreme would be basically the corporate venture fund where you aren't even hiring the people. So then maybe you have the corporate lab, the innovation lab, where it's your own employees, but they're sort of very insulated and separated. Other cases, you have a boot camp approach where you're trying to, in short sprints, take certain aspects or certain people within the organization and lead them into and train them and enable them in a new innovation methodology. And then other cases, you try to really catalyze change throughout the organization. Intuit Google have tried that. I think there's different balances depending on your organization. So I don't think there's one model for everyone, but it's one of the key questions you have to figure out as the existing, particularly larger business, trying to drive transformation in your company.