The secret is out; disruption needs to happen for your organisation. But, what does that really mean? The trends are all in plain sight. Entrenched businesses are challenged by new competitors (oftentimes from a different sector; hello Amazon), new markets, and new technologies.

CEO’s are waking up to their competitors opening up new offices, business verticals, and new services at dizzying speeds. The digital economy is a burning platform where the cost of not responding and remaining stagnate is more expensive and more fatal to the long-term health of your business, than change would be.

Faced with this new paradigm, the first question many business leaders are asking their team is straightforward: 'What technology upgrade do we need?' Frankly, this is wrong, especially when embarking on a digital transformation to create new markets, surpass competitors, and most importantly, enhance the customer experience.

Disruption day one, standard service day two

When it comes to technology, large-scale organisations have certainly come along way over the last few years. There was a time when focusing on web development for mobile users was considered a novelty by some companies.

Yes, it is great that Wi-Fi on airplanes is now largely standard. But, does that mean it is a key differentiator for consumers when booking a flight? Are airlines in the business of transporting passengers or are they in the business of delivering remarkable service for customers? One only needs to watch the in-flight welcome video on most flights for that answer (it is actually the service!). The notion of relevancy and culture far outweigh investments.

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Now, the majority of organisations have mobile, social and SEO as part of their everyday operations. But these are just ‘tickets to the game’. Companies that only focus on those areas are missing their customer’s new digital reality.

The power of analytics, interconnection points, and the Internet of Things are not buzzwords – they are fundamentally altering the competitive landscape and require a rethink of even the most proven business strategy.

To compete in the future, digital must be at the heart of business strategy. The notion that companies’ initial focus should be ‘technology because everyone else is doing it’ is not the right model.

Do the proposed technical solutions make sense to the organisation’s goals, customers, and talent? Just because companies can, doesn’t mean they should. Adopting lean thinking and incorporating these principles into the enterprise strategy needs to be the starting point on the road to digital transformation

The Wi-Fi on airplanes is just one example. Over the past several years, we see organisations from every industry invest significantly to create digital services with mixed results. Successful digital transformations happen by analyzing the new digital economy and having an honest conversation about the future.

To be successful digital service innovators, companies must keep the following concepts in mind:

Be digital first

In the new economy, digital first organisations are about transformation. Companies must decide the digital DNA of their culture, their customer and new markets.

In a digitised world many businesses are doing just the surface layer (digitizing their brand, their look, maybe bringing an online channel into the fold). The question to ask is: are they taking the friction out of the experience?

Commit to an environment of innovation and experimentation

Businesses that will thrive are those that understand how to serially execute, and that in order to realize the promises of innovation they can’t stop. Learn, pivot, and try again. Have closed feedback loops. Stop doing something that is no longer working for the sake of tradition or corporate pride. Ask some very basic questions:

How is the investment in technology being spent?

Are the urgent, immediate needs of the business receiving more investment and attention than the important strategic building blocks of the future?

What do customers really want? What type of experience do they expect? Do business leaders understand where the most value is derived for customers in the commerce cycle?

Commit to new talent strategies and consider new criterion for new talent

Really examine if leadership pays attention to the ‘key employees that make the company successful? Digital melds well with a sense of entrepreneurialism. Are digital natives attached to the company? Are they excited by the brand, the culture, and the business approach in the new digital economy?

Or, is the business settling for digital newbies? Of course, companies need to be balanced – but successful companies are finding unique ways to unleash innovation by harnessing the power of the new generation of digital natives entering the workforce.

The customer is the centre of the digital economy

Data and information must be at the heart of business and every single touch point must be digitized. Never before have customers been as informed about products, services, competition as they are today. Through apps, peer reviews, and social media, customers are highly engaged and informed and leadership must reflect this level of knowledge.

The concept of the ‘customer at the center’ is being played out in the evolution of customer loyalty programs. One always hears about the ‘Internet of Things’ but it is often overlooked how a connected world reduces barriers to customer switching, and radically changes the trust equation that drives loyalty.

At the end of the day, interacting with customers through digital methods is hard. Customers want to feel special as consumers, as receivers of service, as participants in the global economy – they want to have that feeling of 'special,' and 'value,' which they don’t experience through a website.

Customers know that companies are using technology to track their patterns, their preferences, and their interactions. They anticipate that businesses will leverage their data to provide a higher level of interaction.

But don’t misread the situation – customers also expect that their data is leveraged to provide information and insight that will enhance the personal experience they have with employees, sales attendants, or associates.

More than ever, we live in a service-based economy – and, at the end of the day, automation only goes so far. In a world of differentiation, personal service and the experience of a well-informed associate will drive, more than anything else, a higher degree of loyalty.

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According to the latest 2016 predictions by several analyst firms, companies are not moving fast enough but technology disruption is hollow without strategy. Digital transformation is more than a new website, mobile apps or tech offerings.

It is about creating new markets, new offerings, new ways to interact with customers, and to achieve value that was not previously possible. Tech for tech sake doesn’t work.

It’s the collaboration between innovation, strategy, digitisation, and the core technology that allows it all to happen. The future belongs to those companies that create smart, responsive software solutions that’s backed by strategy.

President and Chief Operating Officer of Thoughtworks, Craig Gorsline.http://www.thoughtworks.com/