Beyond Digitalisation: Real Business Transformation

Is your business truly transforming—or just making incremental improvements? In this episode, we explore why digitalisation alone isn’t enough and how real business model transformation drives long-term success. Discover lessons from companies like Netflix, Microsoft, and Adobe, and learn how to rethink value creation, revenue models, and organisational agility. If you’re a leader aiming to stay ahead in a rapidly changing market, this is a must-listen. Tune in and start transforming today. 

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Transcript

The Illusion of Transformation: Why Digitalisation Alone Isn’t Enough

If your company is only making small improvements to existing processes, you may already be falling behind. The world’s most successful organisations don’t just optimise—they transform. Many companies believe they are transforming when they upgrade their technology, automate workflows, or move to the cloud. But digitalisation alone is not business model transformation.

This creates a false sense of security, where organisations assume digital tools will save them. When in reality, they are only making existing business models more efficient, not rethinking how they create and deliver value.

Failure to Adapt: How Companies Fall Behind

The biggest risk is not failing to digitalise—but failing to rethink your business model.

History is full of once-great companies that went digital but still failed because they didn’t evolve their value proposition.

• Kodak: They pioneered digital photography but stuck to a film-based business model. Instagram and smartphone cameras changed the industry while Kodak faded into irrelevance.
• Toys “R” Us: Instead of building its own e-commerce, Toys “R” Us outsourced online sales to Amazon, allowing Amazon to dominate the market while they fell behind.
• And Blockbuster: They had the opportunity to buy Netflix but refused. They focused on optimising physical stores instead of embracing a new entertainment model.

All three failed to adapt their business models—and paid the price.

Success Through Business Model Transformation

Some companies did more than just digitalise—they transformed.

• Netflix evolved from a DVD rental business to an on-demand streaming giant and later a content powerhouse, ensuring they stayed ahead of disruption.
• And Microsoft was struggling in the early 2010s, but under Satya Nadella’s leadership, they transformed into a cloud-first enterprise:
• They Shifted from software licensing to subscriptions with Office 365.
• They Built Azure, making it a dominant cloud computing player.
• And they Expanded into AI-driven business solutions, moving beyond software.

The result? Microsoft regained its position as one of the world’s most valuable companies—by rethinking how they create, deliver, and capture value.

Why Incremental Change Isn’t Enough

For years, businesses have relied on incremental improvements—efficiency gains, cost reductions, and process automation—to remain competitive. But in today’s market, these small adjustments are no longer enough. While digitalisation has helped optimise existing processes, it rarely leads to genuine transformation. Industries are being disrupted by companies that completely rethink how value is created and delivered.

The question is: How can you ensure your business doesn’t make the same mistake?

Rethink Your Value Proposition

Business model transformation starts with a fundamental reassessment of the value you provide to customers. This isn't about making incremental product improvements—it’s about redefining how you create, deliver, and capture value.

To challenge conventional thinking, consider these questions with your leadership team:

• Are we solving the right problem, or just improving an outdated solution?
• Can we shift from selling products to offering outcomes and experiences?
• And what customer needs or pain points remain unaddressed in our industry?

Companies that successfully transform don’t just refine their offerings; they rethink their entire customer experience.

For example, Apple didn’t just build better phones—they created an ecosystem where hardware, software, and services (like iCloud, the App Store, and Apple Pay) work seamlessly together, making it difficult for customers to leave. This integration of value creates long-term loyalty and differentiation.

Redesign Your Revenue Model

Even the most innovative businesses fail when they rely on outdated revenue models. A transformed business model must include sustainable and scalable monetisation strategies.

Consider these key questions:

•  Can we transition from a one-time purchase model to a recurring revenue stream (subscriptions, memberships)?
• Are there data-driven monetisation opportunities (licensing, AI-driven insights, marketplaces)?
• And can we create tiered pricing models that capture different levels of customer value?

One of the best examples of revenue model transformation is Adobe. 

They shifted from selling expensive, one-time software licenses to a subscription-based model with Adobe Creative Cloud. 

This allowed them to:

• Create predictable, recurring revenue.
• Lower the barrier to entry for customers.
• And continuously add value, rather than releasing a new version every few years.

This shift completely changed the way they capture value and strengthened customer retention.

Leverage AI and Emerging Technologies

Technology should be more than just an efficiency tool—it should fundamentally reshape how value is created. 

AI, automation, and digital platforms are not just cost-saving tools, they are enablers of entirely new business models.

For example:

•  AI-powered personalisation can create unique customer experiences, increasing engagement and retention.
• Predictive analytics can forecast customer demand, enabling proactive decision-making rather than reactive responses.
• And AI-driven platforms (such as recommendation engines, chatbots, and autonomous operations) allow companies to provide services at scale that were previously impossible. 

A company that has done this successfully is Amazon. They use AI for personalised recommendations, warehouse automation, and even demand forecasting, giving them an unparalleled competitive edge.

Restructure for Agility and Innovation

Traditional corporate structures are too rigid to support transformation. Companies that fail to restructure often find themselves unable to act on new opportunities.

Successful transformation requires:

• Cross-functional, project-based teams rather than rigid hierarchies.
• A culture of experimentation, where failure is treated as part of learning.
• And Real-time decision-making, rather than slow bureaucratic processes.

A great example of organisational agility is Spotify’s squad model. Instead of siloed departments, Spotify organises employees into small, autonomous teams called squads, which focus on specific initiatives. 

These squads operate within a broader network of tribes and chapters, allowing the company to innovate rapidly.

Measure Success Beyond Short-Term KPIs

Many companies track the wrong metrics, focusing too much on short-term financials instead of long-term transformation outcomes.

To assess true transformation success, companies should measure:

• Innovation velocity— how quickly ideas move from concept to execution.
• Customer impact — how well new business models solve real problems.
• And Business model adaptability — how effectively the company pivots in response to change.

For example, Tesla doesn’t just track car sales—it measures the rate of technological advancements, expansion of charging networks, and software improvements. 

This allows them to stay ahead of traditional car manufacturers who only track units sold.

Final Thoughts: The Future of Business Model Transformation

The most disruptive and successful companies are those that go beyond incremental change and completely rethink their business models.

Business model transformation is not just about efficiency—it’s about:

• Redefining value creation.
• Building resilient revenue streams.
• Leveraging AI and technology as enablers of new business models.
• And structuring organisations for agility and continuous innovation. 

Companies that fail to evolve will find themselves left behind. The question is: Will your business be one of them?