The New Rules of the Business World: The Digital Matrix

Over 50% of the 2006 Forbes companies no longer exist. Why is that? What is happening to the corporate environment? In short, it’s digital transformation. But what exactly is digital transformation? After researching the topic extensively, I define digital transformation as the changing landscape of companies through digital change. And with this idea of digital transformation, there are many different facets and ideas that contribute to companies making a successful change in the current digital era.

The book that i’ll be summarizing is focused on the Digital Matrix, in fact it’s titled “The Digital Matrix” and was written by Venkat Venkatraman. This book is focused on explaining the new rules for business transformation through technology. The new rules of the business world was put into a easily understandable graphic which is known as the digital matrix. The digital matrix was broken down into 3 different sections and in each of those, 3 different divisions.

The first facet of the rules of the business world are the players, and in today’s society the players can be broken down into 3 different players. The first is the most traditional, these companies were the powerhouses of the industrial age and found a way to prosper through thick and thin, they are known as Industry Incumbents. An industry incumbent is just a company that is built on old ideas and methods, to survive the era of digital transformation a major cultural change is needed. The next player in today’s current landscape is the Digital Giants. These are companies that were born on the cusp of the internet era and understand what it takes to survive but is difficult because of their great size. The final player in the current digital era is one that has popped up recently and understands the ins and out of digitalization and are great at adapting and staying on top of current trends, which is one of the most important skills a company needs to succeed in the corporate world today. These companies are classified as Tech Entrepreneurs.

The next facet of the rules of today defines where ideas come from and where companies should focus their resources to develop new products and ideas. They are known as the three phases of transformation. The order of these phases is important and each different player has different strengths accompanied with each phase. The first phase is called Experimentation at the Edge, during this phase experiments with digitization happen and evolve. The book states “As one digital idea matures, another experiment emerges, such that digital business experiments are happening all the time.” And basically it’s saying that from even the lowest tiers of your company should be coming up with ideas and the leaders of the company should be trying them and experimenting with them. The second phase of transformation focuses the magnifying glass even further in, it is titled Collision at the Core. This takes the ideas from the first phase and parallels them with the established ways in the company. This creates a “genuine tension” between the two and allows for innovations to be made. The third and final phase is known as “Reinvention at the Root”, where digital solutions are delivered in ecosystems across multiple industry boundaries. In the book root reinvention is defined as “It is really about finding solutions to the pain points and fundamental thorny problems facing consumers, either individuals or businesses.”

These two facets make up the digital matrix and as you move through the stages you can see where the collaboration between the three players in all three phases is working towards a solution that benefits every company and every consumer, and that collaboration is one of the biggest parts of the digital age.

By following the digital matrix, successes are easily found, the three most prevalent and important successes are known as the three winning moves and that is the final facet of the digital matrix. The first winning move is orchestrate & participate. With the ability to orchestrate and participate you  Earn your right from partners to orchestrate those ecosystems in ways that drive new business value. The second most important outcome of using the digital matrix is the co-creation of capabilities, and by understanding the capabilities it allows your company to manage different patterns of relationships between incumbents and digital giants, between incumbents and tech entrepreneurs, and between digital giants and entrepreneurs. The final winning move is known as “amplify talent with powerful machines”. With the success that was found working through the phases it allows you to focus on mainstreaming your idea and putting it into production with the help of powerful machines.

Overall, this book was a really good introduction to the new rules of the business world and I would highly recommend it for any person that wants to stay on top of the changing digital world. If you want more information about leadership in the digital age check out our website Listen4Insight.com Thanks for watching