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If buzz words and tech lingo cloud your sight, you’re not alone. This article contains some navigation aid. Judging from the hype, most companies today face a burning platform of unseen magnitude. The rate of change accelerates and predicting outcomes almost impossible. And – to be clear – digital transformation is relevant for all industries, even if speed and magnitude vary.
AirBnB, Uber and other fast growing digital businesses are often touted as examples to emulate. However, in contrast to organisations born digital, established businesses have legacy assets to consider, and “thinking like a start-up” won’t automatically transform the existing core. Consequently, some “captains of industry” seem hesitant to set sails.
Our aim here is to encourage such “captains” to nonetheless embrace digital transformation as an imperative, based on a stoic assessment of what’s likely to happen in their industry.
In the following, we propose a four-step approach for transformation, which is based on the following beliefs:
- Data is the cornerstone of informed decision making. You need to invest time and resources in understanding “what’s going on”
- The winners of tomorrow are not only quick to adapt, but also decisive about what not to do
- Executing is key. Not every maneuver will be perfect, but you need to accumulate experience and build culture and skills
- Expect unpredictable weather ahead. Successful companies will master continued transformation as a way of working
Establishing common line of sight
Keep a lookout, even if you can’t decipher all observations at first
- Examine patterns of events in your industry, winners and losers. Dissect new business models: which need they serve, how they serve it and how they expect to make money
- Customers are a key source of input; they may not articulate solutions, but pay attention to changes in behavior, pain points and dissatisfaction, which is typically where an outsider would look first
- Use multiple sources to make sense of technology trends and usage to understand how an outsider might attack your industry. Monitor start-ups and “follow the money” to gauge where new entrants are most likely to appear
- Assess your collective digital competence and digital DNA. Having a strong CIO is not enough; digital transformation is a board and CEO responsibility and should not be delegated
- Name an “interpreter” on the board to lead technology discussions. If you don’t have a suitable profile, now is a good time to find one
- Establish common vocabulary to understand frequently used terms. Swapping ignorance and clichés in the board room is futile at best and often counterproductive
Crystallize options and make explicit choices
Articulate multiple scenarios for how digital disruption may impact your industry and use them as a basis for developing a digital vision
- Stress test your current strategy and business model, and consider worst case scenarios. Assess how use of technology and data may enable new solutions
- Define a portfolio of digital initiatives, and evaluate them against a common set of criteria (e.g. customer interest; time to impact, resource requirements). Simple, easily accessible solutions are often a great way to start
- Establish an explicit digital vision. Share it broadly and encourage a culture of contribution and willingness to try (even some offbeat ideas)
- Educate yourself and the organization to understand implications of technology. Incorporate a process to keep continuous lookout
- Name a digital champion to lead your effort – preferably an up and coming business executive – and establish a digital “command center”
- Avoid time consuming discussions without progress. Standing still is not an option
Get your feet wet. Don’t do it all yourself, but team up with partners with specific capabilities. Especially important in the digital age is the willingness to act on early market response, and creating “eco systems” around the organisation
- Break down your digital portfolio into projects with specific milestones and KPIs and demand “unreasonably fast” delivery
- Speed is key: a fast introduction of a “minimum viable product” is better than a slow launch with all the fanfare
- It’s all about usage: prioritize trial and active adoption
- Combat the mindset that “failure is not an option”. Rather fail fast than doggedly keeping alive initiatives customers don’t want. Include selected customers to get feedback on prototypes and get experience with co-creation
- Customer facing as well as internal digital initiatives will change how you work. Watch out for conflicting operational metrics, and the inbuilt resistance to change, resident in most organizations
- Think eco system and consider outsourcing development and tasks not requiring profound business understanding
Measure progress and adjust the course as needed
Use all experiences – good and bad – to gather institutional learning, and aim to be as fact-based as you possibly can.
- Use beta deployment as a process to gather further intelligence. Set aside resources to gather, analyze and interpret your findings
- Implement an on-going process to measure progress with metrics for customer acquisition, adoption of new services, repeat rates etc. Make sure goals and metrics are not an after-thought but an integral part of defining the various initiatives
- Leverage insight as a key decision making capability. Expect surprises and be prepared to change tack, accelerate promising initiatives or entirely terminate unsuccessful ones
- Evaluate each digital initiative and refine your digital vision and portfolio as you make progress. Inflexible long range planning is a thing of the past
- Gather learnings too on organizational options, and adjust your set-up accordingly. Some organizations swear by a separate digital unit; others insist on involving the line organization from day one
Many senior executives (perhaps you too?) feel personally challenged, because of the capability gap to a more digitally savvy up and coming generation of managers; several established management practices must be “unlearned” and new skills acquired.
However, unless you plan to hang up your sea boots, you need to make digital transformation an integrated, and not disjointed, component of your passage planning going forward.
About the authors
The two authors of this article first worked together at Conscia, a systems integrator and arguably the leading Cisco Gold partner in Denmark, supporting high end enterprise customers with business critical IT and network infrastructure.
Jens Harsaae is a non-exec chairman and board member of a number of “established” companies in the SMB-sector as well as digital advisors and start-ups. He was the managing partner of the Boston Consulting Group in Copenhagen and left the firm in 2011
Christian Hjortgaard is a tech savvy entrepreneur. He co-founded Conscia in 2003, and was the architect of several award winning digitally-based products and services. Conscia was sold in 2015 and with his passion for technology and digitalization, he is now looking for the next big thing
 http://www.infoworld.com/article/3053563/it-management/disrupt-or-die-beware-the-siren-calls-of-tech-consultants.html, http://blogs.cisco.com/innovation/disrupt-or-die-only-the-innovative-will-survive
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