If digitalization is (just) ‘smoke’, then where’s the fire?

We’re seeing new articles on digitalization published by business magazines and consultancy agencies every day. The focus of countless new books, conferences, training seminars, certification, graduate and other studies, digitalization certainly hasn’t yet had its final say. Those who understand its core fundamentals can appreciate it will never entirely disappear while others who’ve not yet grasped its full potential may not have the time to wrap their minds around it but nonetheless feel its profound effects. As modern entrepreneurs, we all stand in the same queue – some will take their turn sooner, others later. But how do we ensure that our own enterprise has the better spot in line?

Enterprises of the Digital economy

The spread of digital business sheds light on three different types of enterprises. The first are those that remain successful but often view digitalization as ‘smoke’ rising from the marketing fire of digital solution providers – a fire that’s eventually bound to be extinguished or to fizzle out. These organizations don’t perceive it as lucrative to invest in an entirely new and potentially short-lived fire when they could just as well warm themselves with the profits of their existing solutions. Enterprises of the second rank are ones that have begun to prepare “just in case” contingency plans. They collect wood and perhaps even develop innovative new business solutions to light a secondary fire for that added little bit of warmth to existing profit margins and to signal to consumers (and competitors) that they too have the capacity to generate some ‘digital smoke’. Enterprises of the third rank are well aware that existing fires will eventually fizzle out as new, more efficient sources of energy (consumer needs, digital technology) better at igniting new fires (offers) are fast emerging. These enterprises seriously plan and effectively develop entirely new chemical reactions (digital business models) that enable their own fires to last longer while the flames of their offers (products, services and solutions) provide each and every buyer with his or her own (personalized) warmth (Customer Experience) and light (Customer Value). These are the approaches customers will grow to love and these are the campfires they will choose to sit around.

Enterprises of the Digital Economy


  • Oxygen = Customer Needs.
  • Fuel = Business
  • Ignition Source = Digital Technologies.
  • Chemical Reaction = Digital Business Model (the right mix of ignition source, fuel and oxygen).
  • Fire =An offer that warms every customer with personalized products and/or services – a flame that generates warmth and light.
  • Heat & Light = Customer Experience (Cx) & Customer Value that creates a customer desire for new heat and new light (the demand for a never-ending flame).
  • Smoke = a recommendation from the customer / a good customer service experience.

Customers in a Digital Economy

Digital technology is rapidly developing alongside customer expectations, whether customers be end users (B2C) or businesses (B2B). Being alert to shifting market trends indicates that what represented real value in the past may not necessarily do so today. Continuously rising expectations are based on new offers that are in turn shaped by digital technologies and the socially connected environment consumers find themselves immersed in today. The time of individual consumerism is long gone so that companies can no longer handle selling to ‘just’ the individual. Today’s reality points to a phenomenon where individual customers function as part of a greater ‘whole’ of networks. And as these customers repeatedly engage in multiple interactions and access common information, they develop the capacity to heighten or reduce their outlook on companies as well as their bottom line. As customers become fast accustomed to the new experiences and new value delivered by new providers, a steadily rising level of competition further alters common consumer expectations. Experiencing a high level of service with one provider results in the demand and expectation for this same level of service elsewhere. And in a digital economy, it is indeed the customer who chooses the provider and not the other way around.

So, Who Has the Better Fire?

Consumers in a digital economy are organized differently, so it follows that they also think and act differently. Why, then, does there remain a multiplicity of enterprises that continue to be organized in the same way, enterprises that think and operate as they had before? Perhaps these organizations believe that their existing fires are large enough – this, despite evidence that the actual size of a fire is no longer a key success factor in a rapidly expanding digital economy. Does their particular industry still lack the characteristics of a digital economy? Do they have a sufficient number of buyers, do they feel satisfied with their current offers? But for how long does this remain plausible?

It remains true that some core business characteristics are fairly constant, undergoing little change over an extended period of time. Enterprises always need capital, form strategic elements and partnerships, exist and produce for consumers, are profit-driven, compete with like-minded competitors. But while enterprises may focus on ‘what’s worked in the past’, the external influences that affect their core business strategies have vastly changed. As an example, hidden competitors don’t necessarily require a large amount of starting capital. They can leverage affordable digital technology and innovative convergent use to reach a large numbers of consumers and address client and customer needs so that potential buyers recognize greater value. And with the aid of digital technology, today’s consumers easily and readily switch to new providers.

Chasing short term profits based on operational expense efficiency can also prove potentially dangerous but nonetheless remains one of the most pressing objectives for many enterprises. These quick burning “profit fires” can fast turn into wildfires that consume the enterprise as they serve to benefit providers only in the short-term while burning consumers that in turn inform others of their dissatisfying experience… via digital technology. These customers will turn elsewhere in search of better value and a more satisfying experience.

Who Will Win?

In the digital economy, winning enterprises are those that are effectively able to direct the warmth of their fires (offers) towards their clients and customers, and not towards themselves. These organizations are uniquely sensitive to market trend shifts that indicate changes in consumer demand. They provide a valuable product or service alongside a satisfying customer experience. It is enterprises that are able to act with agility and sensitivity that will forge great leaders and employ effective people. They have the know-how to use digital technology as a means of detecting new sources of oxygen to create a vast array of fires ahead of the competition. These enterprises are aware that good sources of fuel are of no use if they fail to satisfy customer requirements, the most crucial aspect of the ‘fire-oxygen’ relationship.

Winning enterprises understand that they cannot remain competitive in a digital economy unless they position their digital business in the forefront of their competitiveness. They know that a solid understanding of both current and future consumer needs, desires and expectations lies at the very heart of a digital business plan and their own profit margins. Winning enterprises use this knowledge to provide innovative and satisfying customer experience based on the effective utilization of modern digital technologies.

If your enterprise has yet to join these winners, pay attention to fast changing consumer market trends as a strategy to not only retain your current customer base but to provide easy and satisfying customer experience that creates better consumer value and generates greater profit. Prepare yourself, light a new fire and join the ranks of winners like Amazon, Apple, Google and Alibaba – winners that have successfully undergone this transformation and taken steps to ensure they have the capacity to continue to outperform less digitalized competitors in future.