Most companies are starting not with a clean slate but with some considerable advantages that could be adapted to the digital age. Integrating the existing capabilities with digital technology and shed- ding what no longer works can unlock a path to 10x growth. I have seen leaders ponder this with their teams. When the combination clicks and a clear trajectory emerges, it releases tremendous energy.
Use the rules to work through all the changes that must occur—for example, in moneymaking, retraining and reorganizing people, and building a new ecosystem. The prize is seeing the elements, or building blocks, of competitive advantage combine and accelerate the transition to being reborn as a digital company.
At the time I started researching and writing this book, traditional companies that were becoming truly digital were rare exceptions. Now more companies, many of them in the business-to-business space, have begun to move. Honeywell, for example, is integrating its domain and digital expertise, augmented by a broader ecosystem, to become a provider of platforms to the life sciences industry. It did not create that market space but will greatly expand it while accelerating its own revenue growth.
At Aptiv, the part of Delphi that was spun off to focus on technology, executive chairman Raj Gupta and CEO Kevin Clark are driving the transformation of an old, declining auto parts supplier to be an expander of the mobility space. No longer just a maker of mechanical parts like power trains, it will supply computing platforms that use data from sensors and advanced software to support and expand the realm of autonomous vehicles.
Any outsider can see the major shifts that are afoot at some of our largest, most-established companies. Walmart, for example, is an easy one to watch because of its high visibility. It’s been building its digital capability and at the same time turning what some consider a financial albatross into a competitive advantage: It is conceiving of its 3,571 “supercenters”—the large-footprint stores that include groceries as well as merchandise—as hubs for providing an expanding range of consumer experiences.
In September 2019, it opened its first-ever healthcare clinic in a Walmart store near Atlanta, Georgia. The prototype would allow the company to experiment and improve the concept. The idea is to give people a low-cost, accessible way to access preventative healthcare, including blood tests, X-rays, and eye exams.
Edited and excerpted from Rethinking Competitive Advantage: New Rules For The Digital Age with permission from Penguin Random House.