Digital Transformation – The Star Wars Effect

“My first six years in the business were hopeless. A lot of times I’d say, ‘Why am I doing this? I’ll never make it. It’s just not going to happen. I should go out and get a real job and try to survive.” George Lucas, Creator of Star Wars

Who would have ever imagined that the drones, robots, holograms, lasers, and many other special effects from Star Wars way back in 1977 would one day become reality? Even though it's been more than 30 years since Star Wars was first shown in theaters, the film continues to have a profound impact on the film industry and on people around the world. The film broke all box office records and won seven Academy awards. In fact, Star Wars and its creator, George Lucas, changed the filmmaking industry forever. In many ways, George was the Steve Jobs of movies; he knew that his imagination would become reality. There are four things that made Star Wars and George immensely successful:

  • New Age thinking. Before Star Wars, films were boring, unambitious even, repeating the same old drama. George challenged the underlying industry principle of making films and proved that imagination can come from anywhere and anyone, even from a galaxy far, far away.
  • Innovative business model. George’s decision to keep and merchandise the rights to Star Wars established the new business model for the industry. Star Wars was one of the first films to mass merchandise film-related products. He brewed New Age thinking needs with the New Age business model.
  • Blend of technology and imagination. No one ever bridged the gap between art and technology more successfully than George. He knew that there were limitations to bringing his vision to life, as many of the technology requirements didn’t even exist at the time. He took charge of creating the technology and founded the special effects company Industrial Light and Magic (ILM). He blended old movie-making techniques with state-of-the-art effects developed exclusively for the Star Wars films.
  • Trust of the people. While it’s certainly true that George was the key force behind Star Wars, he couldn’t translate his ambition into reality without a passionate team. George himself once said that he was able to make the film only because of the trust that his people had in him.

In many ways, Star Wars and George Lucas are symbols of today’s digital transformation phenomenon, i.e. creating an image of the future through the lens of the present. The fact is that many business leaders are starting to embrace the reality of digital transformation to avoid a “Kodak”-like moment for their businesses, and many are placing brand level bets. It is critical for global decision makers who are considering digital transformation to learn from the success of Star Wars and George Lucas:

  • Challenge the underlying industry principle of your business for the future. The winners in this new digital world will be companies that challenge their conventional thinking on product innovation, customer engagement, organizational structure, strategy, and business models. Ask yourself questions like “Why does the business need to be conducted as it has been for several decades?” For instance, “Why do banks need to have a physical infrastructure in place?” What if the physical infrastructure became entirely virtual? This belief gave birth to the concept of the all-digital bank, such as Atom, which will be operational soon. Don’t wait for startups to destroy your business value or for customers to change their demands. Start challenging your industry and business fundamentals to find innovation.
  • Digital means money so take the risk. Our upcoming thought leadership paper on The Future of Digital “Gold” in Asia highlights that more than 50% of companies are highly concerned about the risk of losing their traditional revenue streams because of digital. Digital is no longer a “bonus” channel for industries, but rather the most profitable path to their future. With its significant economic benefits to companies, unleashing the potential value of digital looks quite attractive vs. the current business model.
  • Experiment with disruptive technologies to find digital innovation. I highlighted in my recent blog post on why companies must get involved in new technologies (3D printing, robotics, Internet of Things, etc.) in the early phase of their disruption so that when they go mainstream, most (if not all) businesses can successfully ride that wave.
  • Improve the digital quotient of employees to execute the new vision. Companies need to become digital internally first if they want their customers to view the company as a digital innovator. The senior leadership needs to stop asking their teams just to “fix the problem” and instead ask them to “fix their digital quotient in order to fix the road to digital transformation.” The transformation will not happen if people are not ready. Learn from companies like DBS bank in Singapore, which is taking a different route to develop future-ready digital employees.

The lessons for digital transformation were actually seeded more than 30 years ago. I believe CEOs of traditional companies need to become and act like George Lucas with the vision, courage and appetite to take the risk for a Star Wars-like moment for their companies.

Casa Apple

While we wait for the Apple Car, here’s another idea for Tim and Jonny to noodle on (you’re welcome fellas); perhaps it might help with the Watch blues

Chez Pring seems to have turned into the Falmouth Apple Store; multiple IPhones, IPads, MacBooks, iMacs, Time Capsules, Beats, Airports, etc. No Watch (hence the frowns in Cupertino), but HealthKit and HomeKit stuff imminent.

The latter got me thinking.

The success of the iPod – which really put the Apple show on the road – was in large part due to the simplification and elegance introduced into an already well-established product category. The iPod wasn’t the first MP3 player and wasn’t the best, according to audiophiles. It still isn’t … much to the chagrin of Neil Young amongst others!  But it was easy and fun to use, and most importantly, cool.

Fast forward to 2015 and the new product category forming is the Internet of Things. “Smart” products, “connected” products, “The Internet of Everything”, call it what you will, the IoT is becoming hotter and hotter by the moment, according to my 1954 Omega Seamaster (see why I don’t want an Apple Watch guys?!). 

But just as with MP3 players in 2000 - the year before the iPod was released - current IoT products are complex, difficult, typically not very attractive (the Nest is the least ugly), not that easy or fun to use, leave quite a bit to be desired in functionality, and have – based on my anecdotal observations amongst folks who have deployed them – pretty high abandonment rates once the initial charm has worn off. And outside of nerd circles nothing about the “smart home” is yet cool.

In short, the home related IoT category is primed for an Apple-esque moment.

So, here’s the idea; joint venture with a high-end, volume house builder(s), and build Apple houses. The house would come pre-loaded with a HomeKit operating system, every available smart device pre-integrated – for doors, lighting, heating, cooling, security, A/V entertainment, garden maintenance, etc.  - the windows and walls would be Gorilla Glass to allow them to be giant screens (or see through); customers could choose how much pre-configured interior design they wanted – the full Apple look (wood textures, finishes, colors from an Apple Store or the new HQ etc.) or just touches of the Jonny Ive, Angela Ahrendts, Marc Newson, Norman Foster vibe.

The house could be designed so that Toll Brothers – or whoever the builder is – could create an “evergreen” approach, i.e. screens and devices could be swapped out easily when technology upgrades are released. A smart home would go from the being the preserve of the very geeky or very rich (but massively insecure) show-off to the mass-affluent keeping-ahead-of-the-Jones mass market. Ker-ching! 1st Trillion Dollar Revenue Club Member… boom!

Apple could open up the “Home Store” to other technology providers; solar panel producers could build for the HomeKit operating system to make deployment easy. Ambient HVAC providers could provide pre-configured solutions.

Apple could begin to analyze data coming from houses (where owners chose to opt-in) to make recommendations on financial optimization; “by lowering the temperature 2 degrees in these three rooms (which are only used 13% of the time) you could save $750 in the next year” Siri might tell you. Micro-localized recommendations could be made; “we’re not watering the lawn at Number 35 tonight because of the forecast storm – shall we do the same for you?”

Aggregated data from more and more homes will begin to generate new insights which could be monetized in a number of ways; the local refuse department could be very well interested in the fact that neighborhood X re-cycles 15% more than neighborhood Y – optimizing collection routes might be one simple outcome of data like this.    

As Apple Homes move beyond their initial luxury price point the “Code Halos” around larger and larger volumes of houses might begin to uncover all sorts of patterns that could be useful to multiple stake holders and thus monetized in many, many different ways. Maybe Apple will simply sell this data; maybe they’ll move into adjacent, associated markets … Apple House Insurance as one example.

In case you’re thinking this is a completely nutty idea, don’t forget that big (non-house building) corporations have been in the home building business before. Joseph Rowntree  (of UK chocolate fame), the American in London George Peabody, Edward Guinness, Henry Ford (Greenfield Village), and many others, have built houses, typically for their employees to live in. Here at Cognizant’s Center for the Future of Work we’ve speculated on a new approach to big corporations building large scale housing for their 21st century employees before.

An Apple House would be an incremental step to build homes not simply for employees but for customers. Given the deep rooted love so many people have for Apple products and services and the whole Apple sensibility (hence Casa Apple, after Casa Armani ) I would hazard a guess that there’s a very deep and broad seem of new opportunity for Apple to mine here.

So, Jonny, Tim, if your social listening folks forward this onto you please do let me know if you’d like to chat about this more; and if you need a volunteer to slum it for a while in v1.0, keep me posted. 

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Are Tablets Becoming The New Office PC?

With flexibility and mobility becoming key trends in the workplace of the future, a new report suggests that rather than laptops replacing traditional office PCs, we could actually see the new work tool of choice jumping straight to tablets.

As recently reported, the latest research conducted by the International Data Corporation (IDC) found that tablets are beginning to surpass laptops and PCs in some workplaces. But, the article questions, are they capable of performing all the tasks required by a modern office?

According to the study, throughout some countries in Europe - including the UK, France and Germany - tablets have become the standalone business device for 40% of users; and while most still use another device for business purposes, the proportion relying solely on their tablets is rising.

Of course, the ability to use only a tablet for work depends on the person's work responsibilities and what tasks need to be carried out. Employees who work on the field or in customer-facing roles may only need a tablet, while editing work ideally needs to be conducted on a laptop or PC.

However, to resolve this changing work pattern a new solution could be emerging to fill the gap: hybrid devices. Hybrid tablets - those that can be used as a tablet or connected to a keyboard - mean that workers can stay constantly connected and equipped to perform tasks as well as with a laptop.

It's likely that as workers demand even more convenience, mobility and flexibility, tech companies and device manufacturers will come up with innovative new ways to help tablets meet the needs of both office workers and those who are on the go. We can also expect to see more companies ditching the PCs in favour of portable devices.