Why Legacy Industries Must Also Embrace Digital Culture

Technology Is Changing Us All

We are occasionally reminded of a different world that existed only yesterday.  A world with a video store on every corner.  A world where photographs were dropped off to be developed.  A world before kids had time limits on mobile phones.  In many ways, we have not changed.  We make calls.  We watch movies.  We take pictures.  We live each day feeling similar to the many days before.  But things have changed and so have we.  Technology has gradually and consistently crept into every aspect of our our lives.  It has connected us.  It has enabled us.  It has distracted us.  It has redefined definitions of value, credibility, loyalty, and most of all, convenience.

Technology removed the friction of access to one another and information.  Technology made us aware.  Technology made the world smaller and faster.  Phones have now claimed leadership as our primary umbilical cord to the digital word connecting us to products, services and well…everything.

What About Legacy Industries?

Currently, many industries have been insulated from this shift.  While newspaper classifieds felt this pain years ago and retailers struggle in this new reality every day, many asset-based businesses are running largely unchanged.  In fact, many of our largest, oldest industries have impressively withstood the onslaught of changes in society, economics, and technological advances.  From manual forms, to mainframes, to ERPs, they have traversed the evolution of IT and ensured their business processes were efficient, safe, and scalable.  The purpose of many legacy industries is not to connect, but to extract, transport, protect, repair, or create.  They have succeeded by optimizing billions of dollars worth of assets to create chemicals, manufacture equipment, or power homes.  Will digital shifts really impact these businesses, their employees, or their future performance?

We All Want Convenience

As technology has progressed, savvy businesses unlocked potential to create entirely new industries while transforming or disrupting previous industries.  They did this by focusing on one core element — the creation of customer convenience.  Convenience is a tricky thing.  Once we adjust to it in one area, we look for it in additional areas.  All business are impacted by this effect.  Customers and employees simply expect more convenience, transparency, and quality.  Even legacy industries must understand how to deliver on this expectation to remain competitive.  Understanding where to create convenience starts with understanding customers behavior, passions, desires, and aspirations.   This understanding comes from an application of data, social, and behavioral sciences.

People Work Differently

With improved flow of information, there are more opportunities to share knowledge and automate repetition.  People no longer have to subsist as links in very large chains of repetitive tasks.  They are smarter, better connected, use advanced tools, and are more in tune with market forces than ever before.  This also impacts talent acquisition.  While legacy industries may offer incredible career potential, Netflix was not worried about losing out on talent to Blockbuster.  Google never worried about losing out on talent to Encyclopedia Britannica.  Talent goes where market forces create value and opportunities.  Today’s opportunities are created in businesses that leverage new work models, cross-team collaboration, work/life harmony, and fully embrace digital and analytic capabilities.  Once the slow and steady starvation of top talent impacts performance, it will be nearly impossible to reverse.

Head Starts Really Count This Time

And last but not least, it will effect the quality of your products or services as defined by the quality and quantity of your data.  Unfortunately, this is not a race that favors a fast-follower.  Those winning in data, especially customer data, will create better products, gaining more customers, gaining even more data and further accelerating their lead.

If you are in a legacy industry, you cannot jump into this race by simply copying a few processes and tools of a silicon valley company.  You must reinvent and then make continuous reinvention the new normal.  Not because you are required to do so to survive today, but because it will become a requirement to thrive tomorrow.