A congress attendant, testing the Google Daydream Vr device, during the Mobile World Congress Day n Barcelona, Spain last month. (Joan Cros/NurPhoto via Getty Images)
At a time when everybody is talking about how business is being transformed by digital technology it is easy to assume that every company must have some sort of digital offering in order to succeed. But, according to Sanjiv Yajnik, president of financial services at the banking group Capital One, this is to miss the point. Companies should not just be seeking to offer a digital version of what they currently do. Instead, they should be using the technology to completely change how they operate and deal with customers. "The trick is to understand what the customer is looking for and redesign everything about the product so that you end up with something completely different," he said in a recent interview.
This insight is at the core of a theory that Yajnik claims to have been obsessing over and developing for several years and that he is due to share at the SXSW festival in Austin, Texas this weekend. His presentation focuses on "four misconceptions" that he believes hamper companies' ability to grow rapidly at scale. The lack of recognition that being digital means much more than offering a technological version of something that already exists falls under the heading of the "product itself". The other three are speed, boundaries and execution.
Speed is like product in that many people have been convinced that the highly competitive and fast-moving market in which businesses currently find themselves requires companies to rush out new products and services in order to obtain a "first mover advantage" over the competition. But paradoxical as it may seem this is not the case, claims Yajnik. "Speed is about position and timing rather than just being fast," he says.
By boundaries Yajnik means the restrictions that make businesses think they should concentrate on what they are good at. This approach is epitomized by the strategy theorists who talk of companies focusing on their "core competences" or "sticking to the knitting". But Yajnik argues that this thinking is less valid now that "new tools and technologies are turning everything on its head". As a result, companies are no longer constrained by sectors or markets. Just look at how Amazon is moving into areas such as healthcare and groceries, while Apple and Google are venturing into payments and driverless cars. "We have to reimagine what we do holistically and seamlessly," he says, adding that the boundaries also extend to the divides between functions within businesses, which were laid out "for a different reason and for a different time".
This need to take a wider-ranging approach also applies to his fourth misconception - execution. The hardest thing is making it all come alive, he says. "One of the failures is having a bolt-on approach," he says, adding that many companies make the mistake of bringing together a team of bright people with the aim of producing great ideas and then isolating them from the main business. "It has to happen in the heart and guts of the place where you are operating."
His phrase for the attitude needed is "you have got to make the jump". It is not about "tiptoeing" into new fields. "We have to be constantly looking around the corner and seeing where we can provide a better service. You have to be engaged on several fronts and to be constantly ready to make the jump into different arenas."
">A congress attendant, testing the Google Daydream Vr device, during the Mobile World Congress Day n Barcelona, Spain last month. (Joan Cros/NurPhoto via Getty Images)
At a time when everybody is talking about how business is being transformed by digital technology it is easy to assume that every company must have some sort of digital offering in order to succeed. But, according to Sanjiv Yajnik, president of financial services at the banking group Capital One, this is to miss the point. Companies should not just be seeking to offer a digital version of what they currently do. Instead, they should be using the technology to completely change how they operate and deal with customers. "The trick is to understand what the customer is looking for and redesign everything about the product so that you end up with something completely different," he said in a recent interview.
This insight is at the core of a theory that Yajnik claims to have been obsessing over and developing for several years and that he is due to share at the SXSW festival in Austin, Texas this weekend. His presentation focuses on "four misconceptions" that he believes hamper companies' ability to grow rapidly at scale. The lack of recognition that being digital means much more than offering a technological version of something that already exists falls under the heading of the "product itself". The other three are speed, boundaries and execution.
Speed is like product in that many people have been convinced that the highly competitive and fast-moving market in which businesses currently find themselves requires companies to rush out new products and services in order to obtain a "first mover advantage" over the competition. But paradoxical as it may seem this is not the case, claims Yajnik. "Speed is about position and timing rather than just being fast," he says.
By boundaries Yajnik means the restrictions that make businesses think they should concentrate on what they are good at. This approach is epitomized by the strategy theorists who talk of companies focusing on their "core competences" or "sticking to the knitting". But Yajnik argues that this thinking is less valid now that "new tools and technologies are turning everything on its head". As a result, companies are no longer constrained by sectors or markets. Just look at how Amazon is moving into areas such as healthcare and groceries, while Apple and Google are venturing into payments and driverless cars. "We have to reimagine what we do holistically and seamlessly," he says, adding that the boundaries also extend to the divides between functions within businesses, which were laid out "for a different reason and for a different time".
This need to take a wider-ranging approach also applies to his fourth misconception - execution. The hardest thing is making it all come alive, he says. "One of the failures is having a bolt-on approach," he says, adding that many companies make the mistake of bringing together a team of bright people with the aim of producing great ideas and then isolating them from the main business. "It has to happen in the heart and guts of the place where you are operating."
His phrase for the attitude needed is "you have got to make the jump". It is not about "tiptoeing" into new fields. "We have to be constantly looking around the corner and seeing where we can provide a better service. You have to be engaged on several fronts and to be constantly ready to make the jump into different arenas."
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