10. Transforming into a digital mature company
When do you reach the status of digital maturity? And how do you, the DJ and the event producer, transform your organization into a digitally mature business venture?
Estimated reading time 16 minutes
Shopping streets boarded up. New business models like Uber that were unthinkable five years ago. Fans and clients cling to their smartphones. Social media can make or break an event or a DJ. These times are tumultuous for DJs and event producers. Everyone involved in the entertainment and music business is aware of the limitless options offered by digital technology, but how to navigate the world of disruptive innovation, big data, the internet of things, cloud computing, customer journeys and an array of related concepts.
The digital transformation affects some businesses earlier and/or harder than others. DJs and music event producers – and the music business in general – were among the first to face competition originating in the digital domain. However, the digitization of the music business is still intensifying, with yet more and deeper changes on the horizon. It creates the need for DJs and event producers to assemble and integrate new roles and practices so people are better equipped to cooperate, distribute content and structure processes.
Stagnant water will rot, as we all know. Lasting success will primarily be determined by the efforts of music and entertainment companies to anticipate change in the digital domain. Innovation of products, services and business models is essential for the DJ’s and event producer’s professional continuity in an era of disruptive technology. Digital forces evolve overnight and disrupt the playing field, yet at the same time create opportunities for DJs and event producers to meet the changing demands of their fans, clients, employees and suppliers. The increase in interaction between daily reality and the virtual world of the internet creates massive change and new, digital opportunities. These are brought about by the rapid developments in social media, data analysis and mobile applications.
DJs and event producers make more and more use of the options offered by digital technology; some of them are restructuring their organization and its business practices to meet the new reality. Technology changes the way DJs and event producers relate to fans and clients; it touches upon nearly all internal business processes and it even results in a new business model (as outlined in Chapter 3) that will help to maximize the profits to be made from the new technology and the opportunities it creates. This can result in revenue growth, more efficient and effective business processes, and the development of new products and services for existing or new markets and fans and customers. When do you reach the status of digital maturity? And how do you, the DJ and the event producer, transform your organization into a digitally mature business venture?
Starbucks and digital change
For Starbucks, the ‘digitization’ of the company and brand is as essential to its continuing business success as the coffee it sell – is the official line in the CEO-room of the coffee outlet. Responsible for the implementation of Starbuck’s digital strategy is the Chief Digital Officer, Adam Brotman. Linking to clients via the Starbucks Digital Network is Starbuck’s method of building the brand. Starbucks used to develop its brand via its employees. Smiling faces and green aprons largely defined the company’s image, the brand and its mission.
These days, the baristas are still at the center of Starbuck’s in-store experience, however the company employs its arsenal of digital tools to build a more lasting relationship with its clients. With its extensive product range and 18,000 stores in over 60 countries, Starbucks applies digital to stimulate growth. It is a radical decision to appoint a Chief Digital Officer.
Starbucks is dismantling its (stand-alone) data silos in order to connect to and build its position in the internet ecosystem. It has identified the domains, networks and devices it will serve within its ecosystem. Moreover, Starbucks has identified the networks it will connect to. The company is able to collect data via its single sign-on button that enables clients to log in via the Starbucks store’s Wi-Fi connection. Starbucks has integrated this ‘single sign-on’ button in all its domains, and all existing and future Starbucks applications. The button is a standard function of future homepages, to be integrated with the various social channels. It is all a means to achieve the ultimate goal, which is linking the social identity of its fans and clients to the ‘Starbucks identity’ that fans and clients fabricate via Wi-Fi, the Starbucks domains or its apps.
Connections and information
The semantic web provides a framework and an infrastructure for linking online published information, thus facilitating the creation of new insights. Starbucks is building websites and applications specifically for its internet ecosystem, thus facilitating full access to the semantic web and its functionalities.
Starbucks offers its customers interesting digital incentives via the Starbucks Digital Network: free Wi-Fi and the in-depth knowledge of premium content. Since Starbucks does not hold back (goes all-in when it comes to its) on its digital strategy, it obtains insight into the desires and needs of the connected consumers, while the brand is and remains top of mind. Starbucks CDO, Adam Brotman says: ‘We have developed a technology-rich hub, as powerful as the retailer itself. It is impossible to predict what the digital hub of the planet’s biggest coffee retailer will produce. Various combined digital teams are deep into innovation, to extend the base via social media, among others.’ Starbucks’ vision for innovation: ‘One brand … one digital strategy’. Transforming from analog to digital, Starbucks is rapidly becoming a digital driven organization.
Digital driven organization
The journey through the digital domain has many routes, all leading to the ultimate goal. The organization must set as its aim: to become a digitally mature organization. Every DJ or event producer and his (or her) organization will travel its personal route. It is about matching your organization and its value proposition to the digital domain. After all, as a DJ or event producer you are a decentralized network in the internet ecosystem, as we have previously established. In this way, you will travel the road to a digital driven business; in other words, a digital driven organization (business).
What you should not do is to radically overhaul your current business model right away. Ask yourself as a DJ or event producer first: how do I add value for my fans and clients? And what digital tools are at my disposal to service my fans and clients even better and more efficient?
The road to a digital driven business implies investing in the transformation to the new business model, or exploring the options of new earning models that can be added to your operation in order to make the change to the new business model. You and your organization want to apply the options of the digital domain in order to add value to your fans and clients. Some organizations offer their existing products and services; by adding an extra channel they add extra value to the fan or client. Some organizations opt for deploying digital services in addition to their existing products and services. Nike is a fine example of an organization that puts effort into a new business model without radically changing its practices. In addition to the traditional Nike product, sneakers, clients can customize the shoes to their liking and taste online.
These days, most transformations within organizations have a digital dimension. The digitization of an organization is often the dominant driver of change. The daily lives of all of us are rapidly becoming more and more digital, since we interact via social media, mobile internet, smartphones and tablets more and more of the time.
Technology can have the effect of headlights on crossing wildlife: it captivates into a freeze. Most questions about digital change are about technology and systems. ‘Is it about working with computers? That’s ICT,’ is a frequent line of thought. That is a mistake; one just focuses on ‘computers’ and forgets about ‘working ‘. One forgets to ask the question: ‘What effect will digitization have on emotion and sense of purpose?’
In practice, digital change is often regarded in terms of software development and system automation. Yet most of the time it is the processes that have to change. The most important players in these processes are and always will be people, not the computers and software that are supposed to support people. The technology should fit the process, not vice versa. As we have concluded previously: technology is not the end, it is the means to this end.
DJs and event producers who came to prominence in the 20th century are struggling to make the digital driven change that is necessary in order to have an impact in the 21st century. They ‘get’ digital technology and they have good ideas, yet they run into problems executing these ideas. Moreover, they have been used to working within an hierarchical frame, focused on the preservation of what exists and restricting risk. These two characteristics hinder adapting to change and acquiring new skills.
Digitization changes the behavior of fans and clients, the business model and the DJ’s or events producer’s position in the value chain. The technical implementation of new digital technologies is important, yet not crucial to success. After all, the transformation it initiates is people-centered. The transformation to a digital driven business or organization implies a fundamental change in thinking, acting and organizing. Managing transformation means to influence in a smart and sophisticated way. This means: not from a position of control and containment, but in allowing for room and direction, and creating space for innovation.
If an organization sets out to transform to a digital driven entity, it must focus on the strategic importance of information in the digital economy. This means that two new divisions will supplement the organization: data management and digital management. Digital management is responsible for the fans or digital client, and oversees both the digital strategy and the technology to create a positive digital experience. Data management’s focus is data; it will use the exploding volume of data and analytics to test and improve decision-making, in order to create new opportunities.
Good to great
In his book, ‘Good to Great, why some companies make the leap and others don’t’, Jim Collins pointed out that success is not an accident, but a conscious decision by the leader. Collins and his team examined what is different or special about companies that have gained a significant edge on the competition.
For years, a team of American scientists, led by Collins, examined various lines of business in-depth, both in terms of quantity and quality. It resulted in a model for transforming good companies into great companies. Collins’ book describes in detail the approach that led to his model. The result of his survey can be used as an action plan for any successful company, organization or brand.
Collins’ survey followed 1,435 ‘good’ companies for forty years and examined their performances. Collins was looking for the few companies that became distinctive as ‘great’. He wanted to provide insight into successful change. What his findings boil down to is this: forget everything you have ever learned about what it takes to be successful and how to create good results. Collins wants you to be aware that (nearly) all requirements for the creation of large-scale change are myths:
- The myth of ‘urgency’: this myth poses that change only starts when a crisis is looming, a crisis that convinces ‘unmotivated’ employees of the need to accept change;
- The myth of ‘stock options’: stock options, top salaries and bonuses are incentives that lubricate the wheels of change;
- The myth of ‘fear-driven change’: the fear to lag behind, the fear to see others win, the fear of monumental failure—these will drive change;
- The fear of ‘acquisitions’: you can buy your way to growth, thus buying your way to greatness via numbers;
- The myth of ‘technology driven change’: the breakthrough you are looking for can be effected by the implementation of technology that will give you the edge over the competition;
- The myth of ´the revolution’: great changes must be extreme, heart-stopping, painful and hugely disruptive events.
We can discern all of the myths mentioned by Collins in the practice of ‘digital change’, as well as the changes a DJ or event producer faces concerning his participation in the micro and macro internet ecosystem. However, forget about these myths. The internet ecosystem has its own rules of digital change, which change as they play out. Contrary to the ‘technology driven change’ myth and the ‘revolution’ myth, the internet obviously is a technological change that is revolutionary in nature. The context of Collins’ myths is this: the DJ or event producers have to closely follow the changes that are the result of the implementation of technology; and institute disrupting processes step by step, with fans and clients, and the organization itself.
It is important to execute the transformation to a digital mature company by moving in small steps in the right direction as opposed to getting stuck in large-scale, complex and difficult to manage implementation processes. The fundamental idea behind the implementation of desired change must be the reduction of complexity. The new simplicity is what you are aiming for.
The changes of our times are driven by technology, yet people make the difference. The digitization of the DJ or event producer requires a transformation of the organization, its processes and systems, yet above all it asks for a personal transformation, your mindset and overcoming fear.
Our mindset is a collection of principles and convictions, both conscious and subconscious. These principles and convictions determine what we do and what we don’t. We have acquired them in the course of our lives by way of upbringing, education, peer groups, personal experiences, etc. Principles and convictions, our mindset, immensely affect learning and development, Carol Dweck writes in her book entitled Mindset. She distinguishes between the static mindset and the growing mindset. You will be amazed by how static our mindset can be and to what extent it stems our personal growth.
A digital growing mindset is the convictions that you, the DJ of event producer, are part of a digital economy, operating on a daily basis in a digital domain that connects you to fans and clients. This digital growing mindset has distanced itself from the static mindset.
It is scary to say goodbye to the analog mindset of old. It is the fear to lose what you know and what you have, and not knowing what you will get. Management is an important success factor when you decide to engage the organization in the process of digital transformation. It is vital to provide room (for consultation, for instance) and direction. It is preferable to link the transformation to the primary process of interacting with fans, clients, providers, partners and competitors. The motto is: make the organization responsible for the transformation and reduce complexity; it will make change easier and more natural.
Assumptions must be founded on facts, not speculation. It implies that the organization must be open to discussion, which helps to scrutinize the situation at hand: the data, and how to contextualize and interpret these data. It works as a reality check. Do the plan and the envisaged approach match with the facts? Check the market situation and the information the market supplies, and monitor the development of the internet and the tools for web analysis. In this day and age, the challenge to overcome for DJs and event producers is the lack of insights. Without uncorrupted, reliable information an organization is ill equipped to make proper decisions. This vital information is mandatory in order to survive, let alone thrive, on the rapidly evolving playing field of the digital domain and its competitive nature.
Data are in inexhaustible source and an excellent opportunity to drill for (critical) insights. This is the time to tap into, cultivate and refine the powerful opportunities of this essential and priceless source—the digital equivalent of oil. Data will help to map out blind spots in the strategic plan. You and your organization have to develop an attitude that welcomes facts-based discussion. This attitude is fitting for an digital driven business in the internet ecosystem.
Collins gives a couple of pointers which are translated for taking part in the internet ecosystem:
- Lead the organization by asking questions, not by giving answers. It works for employees, as well as fans and clients, and the available data.
- Use the ensuing discussion (with employees; fans and clients; data) to attain an adequate answer to the question, not to create a support base.
- Analyze problems and mistakes made by employees, fans and clients, and data, to learn from them, not for finding the culprit.
- Organize and set up ‘red flags’, linked to indicators that help to timely notice mistakes or bad decisions, in order to act upon them. Use data for guiding!
It is a subtle balance between assumption and reality. Collins’ analysis shows the trick is to keep faith in the ultimate success of the venture while being open to the harsh realities of business and life.
The organization of a DJ or event producer must meet the challenge to develop the skills – digital skills and information skills – that make it possible to fully exploit the opportunities of the digital domain. This role is suited for a new generation of managers who use information to support the new business model. They are primarily involved in the development of facilities concerning the digital infrastructure, taking advantage of the chances the digital domain offers. This generation of new managers will principally be ‘millennials’ or ‘digital natives’: youngsters who grow up in our rapidly digitizing world for whom matters like internet access, globally available information sources, options to communicate with every possible device at any time of the day of night, from any location, are a given. These youngsters have a digital mindset.
In his book, ‘Grow and think digital’, Joris Merks-Benjaminsen maintains that millennials show up at work with fresh ideas and ideals, possessing a flexible, non-hierarchical way of thinking. Once on the job, they become aware that many aspects of the shop floor are outdated; that hierarchy is still relevant; that seniority often prevails over merit; that you have to build an in-house network in order to navigate the company politics. They see a shop floor where plans come about via formal processes, structures and meetings.
This mismatch between the shop floor and the mindset of millennials harms both parties. Frequently, digital natives will have a hard time adjusting to the traditional office culture; the company runs into the problem of attracting young talent and keeping them happy. As a result, the organization is less diverse – in terms of human resources – than it could and should be.
Moreover, Merks-Benjaminsen maintains that CEOs and entrepreneurs are aware that digital natives are crucial to the health of their company. The new generation can help companies keep up with the ever-increasing tempo of digital change. This means that the last thing young professionals should do is assimilate into the existing work culture and methods, rather they can help to bring these up to date. This requires a delicate balance. Too little adjustment results in inefficiency and conflict; too much adjustment dilutes the ‘updating’ role of the digital native. Striking that balance is the key to tapping into, and profiting from, the mindset of the millennial.
Collins explains the success of ‘great’ companies by their passionate pursuit of the company’s essence. This pursuit breaks down into two aspects: applying focus in its activities, and the simplification of the business model, the strategy and the organization. Focus and keep it simple. Organizations capable of determining their essence create a solid mental frame of reference – an identity – that enables employees to quickly make the right choices. It is not always easy to find the essence, it demands mulling in a disciplined manner over the question: ‘Why does the organization exist’? What is its purpose?’ Subsequently, the essence must be translated into a clear and easy to memorize account that is part of an action plan and a roadmap for the application in the company’s ecosystem.
The goal is a digital mature organization that practices a communal digital strategy. It is about improving or re-designing company processes; most companies are challenged by any digital initiative. For example, the decision to deploy an extra channel for the sale of a product or service does not take into account if the additional process matches with the back office (the fan base or the data harvesting platform) or any other process that services fans and clients. Transforming into a digital mature organization breaks down into five steps or phases:
- Ad Hoc – The phase in which the organization is (re)acting without focus or aim, nor any budget or dedicated employees, realizing one has to ‘do something’ with the internet and social media.
- Engaged – The phase in which the organization has made its first tentative steps into the digital domain, mobilizing social media, apps and its website on a regular basis.
- Structured – The phase in which the organization organizes and structures its ecosystem with a modicum of money (budget); a limited number of actions have been triggered.
- Managed – The phase in which the organization operates seriously and consistently by means of an action plan that includes clear aims and objectives.
- Optimized – The phase in which the organization optimizes its aims and objectives, and redefines budget, roadmap and organization in the context of the transformation to digital maturity.
Looking at the DJs who make up the Top 100 lists over 2013 and 2014, it is apparent that the vast majority of the most popular DJs on the planet is ‘engaged’ in regard to the transformation to digital maturity. This can be demonstrated by analyzing their websites and their presence on social media channels like Facebook, Twitter, Instagram, YouTube and Google+. The data collected by Rankingz and the EDM Monitor make clear that most DJs have just set out on the road to digital maturity and still have a long way to go. The EB Live Festival Monitor 2015 shows that this also applies to festivals and events.
Transformation is about change, whether it is a new manner of servicing your fans and clients, a new way of operating, or getting your digital mission up and running (because various parties, departments and partners have to cooperate intensively). Processes do change and people are at the center of processes. The transformation to a digital mature company hinges on the management of change, and the understanding that this is the biggest challenge. Remember that change is rarely welcome, unless it brings evident benefits.
Until recently, information was primarily a means to an end. This is exemplified by the position of ICT departments within organizations; it facilitates. Information should service an organization’s processes and objectives. Since information has become the end, it determines – more so than other factors – the primary economic or public value of a DJ or event producer. If you are able to wrap your proposition in information, in a way that outdoes the competition, your market share will grow. On the other hand, if your competitor succeeds in enriching his proposition with information, he might nibble on your market share.
The misguided application of technology can bring down an entire organization. Technology in itself does not generate success; using technology the right way does. Only use new technology when it is clear how its implementation will add value to your organization’s essence. Nowadays organizations can and have to innovate successfully, in a way that will contribute to their reason of existence. In his study, Collins emphasizes the catalyzing effect of technology; if successfully applied, it can enable the organization to grow considerably. Be convinced about the internet ecosystem as an application, and the fan’s or client’s central position in it.
The goal is a digital mature organization that practices a communal digital strategy. It is about improving or re-designing company processes; most companies are challenged by any digital initiative. Transforming into a digital mature organization breaks down into five steps or phases (see illustration on page 108). These five steps will lead to a univocal digital strategy and digital maturity.
It takes time to transform ‘good companies’ into ‘great companies’. Being present in the internet ecosystem is a process in itself. Part of this process is improving the organization step by step. Change looks more spectacular seen from the outside. When the flywheel catches on, all of a sudden success is manifested in an accelerated fashion. The sudden appearance of a ‘great company’ is therefore often viewed as a ‘big bang’. It signals that you, the DJ or event producer, have found your spot in the internet ecosystem; the transformation from analog to digital is a fact. You have become a digital mature company.
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