What does digital mean? A brief history
“Digital” is a word a lot of us have been hearing and using lately. On its own it doesn’t mean much. Wikipedia says “digital usually refers to something using digits, particularly binary digits.” Ones and zeros.
In the late 1990’s and early 2000’s, a particular type of computing known as “digital computing” had basically achieved world domination. Digital infrastructure was mature enough that we spent time talking about the stuff we made and did with it, like producing and consuming digital media. Did you hear Star Wars: Episode II will be 100% digital? Or, I know digital doesn’t sound as good, but I can get up to 1000 songs on my iPod!
Back then it was understood that if you talked about Kodak’s digital strategy, you were referring to their efforts to somehow profit from the sale of digital imaging products and services (which at one point involved emailing photos to people’s AOL accounts after the film had been dropped off and developed at a store). Today the average person hardly thinks about buying a “digital camera,” they think about buying a camera that happens to be digital.
By the late 2000’s, digitization had flooded a sizeable swath of the media landscape and was getting deeper, faster. More and more people were going online to enjoy the digital content bonanza. MTV created a Chief Digital Officer (CDO) role in 2005 (the same year YouTube was founded) to help take advantage of the shift. Other “old media” companies like NBC Universal, Time Warner, and Clear Channel followed.
But by 2010, MTV and some others had already eliminated their CDO role. Digital was increasingly an integral part of the big picture, not a unique function. As most media companies eventually learned, simply “going digital” wasn’t any more of a sustainable competitive advantage than “going electric” was a century earlier (as Nicholas Carr famously argued). Competitive advantage ultimately comes down to serving people’s needs and desires better, faster, or cheaper than anyone else.
Meanwhile the digital deluge continued. Users were pouring online and advertising dollars followed. From the late 2000’s through the early 2010’s business was talking a lot about digital marketing. As in, SEO and advertising aren’t enough, you need quality content and engagement as part of an integrated digital marketing strategy.
While digital marketing has continued to grow and evolve, so has a deeper adoption of digital technologies to transform not just brands but services, products, and whole organizations. The UK government announced its “digital by default” strategy in 2010 and other governments followed. Since then, the web has gradually grown out of being the place to find an address and print a voter registration form; it’s becoming the place people go for the whole service.
Starbucks was another relatively early case of digital transformation. In 2009 they created a Digital Ventures unit as an IT-Marketing hybrid (run by the then-CIO) to handle things like in-store wifi, ecommerce and mobile apps (including payments), which are technology-enabled but experience-driven. And Starbucks is built on customer experience.
Now virtually every industry is building layers of digital user experience around its products and services. And digital continues to mean different things to different people.
For some consumer goods companies like L’Oreal, digital strategy tends to have a marketing focus. At the other end of the spectrum, manufacturers like GE and John Deere are building new services and revenue streams around digital data and analytics. For big public and private sector institutions, digital means helping people find and do more from anywhere at any time. For experience-driven companies like Starbucks and Virgin America, digital means all of the above plus enriching the in-person customer experience. And in every industry, digital means new tools to help people collaborate, communicate, and make better decisions.
Those are very rough generalizations, but they illustrate the range of possible strategies. Every organization should explore multiple avenues. And as with “digital computing” and “digital media,” some of this transformation will be called digital for awhile, but much of it won’t. And it doesn’t really matter.
What matters is understanding what people need – whether they’re customers, employees, citizens, or partners – and exploring what’s possible to make your products and services better, quicker, or more affordable. Digital technologies just happen to be a great way to do that.