Dialog from Blazing Saddles:

Gabby Johnson: I wash born here, an I wash raished here, and dad gum it, I am gonna die here, an no sidewindin’ bushwackin’, hornswagglin’ cracker croaker is gonna rouin me bishen cutter.

Olson Johnson: I’m particularly glad that these lovely children were here today to hear that speech. Not only was it authentic frontier gibberish, it expressed a courage little seen in this day and age.

And so it is that some of my colleagues and I have added the acronym “AFG” to our vocabulary, for “authentic frontier gibberish.” There are skeptics who might want to apply the AFG seal of disapproval to some of the more vague and less useful discussions about Digital and why it matters to modern businesses.

The AFG is unfortunate, because the Digital business model fits nicely into a list of about twenty we developed some years back at my old consulting company, IT Catalysts (credit where it’s due — our starting point was Michel Roberts’s excellent Strategy Pure and Simple (1993)).

At the time we called the business model in question the Technology/Competency model. The idea: Take something your business is already good at and find new, marketable uses for it. In The Cognitive Enterprise Scott Lee and I made it the third part of our Customers/Communities/Capabilities formulation, “capability” being our now-preferred term for “competency.”

And companies that adopt this business model don’t stop with taking advantage of the capabilities they’ve already mastered. They take the next step, making strategic decisions about what new capabilities to build, and for that matter which existing ones are declining in importance and should therefore be sunsetted.

Enter Digital strategy. Shorn of the AFG, adopting a Digital business strategy means using newly emerging or under-exploited technologies to build new business capabilities, which, once mastered, can be used to bring new products and services to market quickly, because so much of what’s needed to bring them to market is already in place.

Simple example: As a consultant, I’ve developed a decent bag o’ tricks for meeting facilitation. I’ve also developed a reasonably good set of techniques for taking strategic intent and turning it into a program of action.

These are, I think, two of my Capabilities, and if you disagree please don’t disabuse me of my conceit.

The point is that with these two Capabilities in hand (and some others, but the point here isn’t to extol my numerous virtues) … where was I? With these existing capabilities I’m in a position to develop consulting services for a variety of specific topics as the need arises and their potential catches my attention.

Digital, for example.

So … if Digital business strategy is a subset of the broader-based technology/capability-driven business model, which is the big deal, Digital, or capability-driven business models in general?

I’d vote for capability-driven business models, with this proviso: There aren’t many new business capabilities to develop that don’t require the use of new and interesting technologies.

But still, what matters (I think) are the capabilities more than the Digital technologies that enable them. The reason goes back to the ongoing, even accelerating trend of business temporal compression (AFG?). While it depends on what your business sells and who it sells it to, in many cases marketplaces are changing fast enough that traditional approaches to strategic planning just can’t keep pace.

As a general rule, the value of a capability will last longer than specific products, product lines, or even product categories. And so, building strategic plans around capabilities makes the most sense for many and perhaps most businesses today.

Take smart products and the Internet of Things (IoT if you want to be cool). Imagine IoT isn’t one of your capabilities, but a competitor has mastered it.

We in IT have become accustomed to products capable of detecting and reporting defects before they cause overt outages.

Imagine consumers start to expect all their major purchases to do this. This isn’t unlikely — customers might not be sophisticated about technology in all its gory detail, but they’ve become pretty savvy about what technology can do.

If you’ve mastered the IoT, you can add this feature to all your products fairly easily. If not, good luck — you’ll have missed a major marketplace shift.

Building a business that’s adept at detecting marketplace shifts early and adapting to them quickly will prove to be the path to sustainable success.

My guess is that Digital will part of the mix, because Digital technologies are what will give businesses the new capabilities they’ll need to adapt at the speed of customer expectations.

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On an entirely different subject: I gave a speech last November at PhreakNIC in Nashville, about the Embedded Technology Generation and its implications. It isn’t exactly TED talk material, but if you’re interested, you’ll find it here.