When business leaders talk about digital transformation, they often pay more attention to the word digital than the word transformation. That’s an easy but serious mistake. When the subject comes up, the first question that anybody should ask is this: What kind of transformation are we really talking about, and how does it differ from the other market transformations my firm has always faced?
Lessons from Hollywood’s Digital Transformation
In 2015, one might have imagined that the major motion-picture studios would simply shrivel up and die, as new entrants such as Amazon, Netflix, and Google disrupted their industry. But they haven’t. And the reason they haven’t reveals a path forward for managers in other industries facing digital transformation. Why were studios able to respond to the threat posed by new digital technologies? Because they stopped protecting their existing business model, which involved selling access to scarce content sold in scarce channels by filling seats in theaters, selling advertisements on prime-time television, and selling shiny plastic disks for $20 a pop, and instead rediscovered their underlying business mission — which was creating great entertainment and getting it in front of the right audience. Guided by that new perspective, the studios began to embrace new technologies and new business models. If a mission-driven response to digital transformation worked in Hollywood, imagine what it could do for your firm. Here are three lessons learned from what the motion-picture industry did right.