When it comes to successful digital transformation, most businesses have a lot of growing up to do. On the quest for the competitive edge in the Digital Age, simply adding technology to your business model will not get you that edge. What you need, is a clear transformation strategy to integrate and adapt your business model to the digital world.
As it turns out, the overwhelming attempts to “just add tech” to business models doesn’t work. The most successful, industry leading businesses have found that success by first adding a clear and coherent Digital Transformation Strategy. By laying out a strategic plan, you can avoid costly mistakes of adding tech for tech sake.According to a recent study by MIT Sloan, more than 80% of leading businesses (with mature business models) have a clear and coherent digital strategy. In that same study, only 15% of established, or maturing models claim to have a clear digital strategy.
Leading businesses can leverage strategy to transform processes, engage their talent and adapt their business models to the digital age. This requires critical thinking and planning to be done with leadership from the top down, not just-in-time, as commonly practiced.
Advanced organizations develop digital strategies that are more broadly focused on transforming the business as a whole, versus a mere shift in specific operations or inclusion of a particular technology or platform. Many businesses that struggle with their Digital Transformations do the opposite. They tend to invest heavily in specific platforms and/or technologies, thus becoming dependent upon them to transform and grow their company. B2B marketers love this of course, but according to the study, it is not an effective strategy.
What distinguishes the leaders from the herd?
1. The winners lead the Digital Agenda from the top down.
It should come as no surprise that leading organizations, those that are more developed and successful, are leading their initiatives form the top of the org chart. Many businesses historically look to strategy and design and think of them as a last link in the chain, rather than as the first. A majority of developing businesses apply these critical thought processes as last minute, “lip-stick on a pig” solutions. As a result, it takes a toll on revenue and market share.
Many transformation initiatives fail internally, in terms of execution, and externally with customer acceptance. Like a total body makeover, every digital transformation affects the entire organization, including the the brand. If the image or perception of the organization is out of alignment with the experience, customers lose faith, trust, and inevitably disengage and shop merely on price alone. This can lead to a commodity classification. Your brand won’t be distinguishable from the others in your service or product space.
2. Leading businesses see the forest from the trees.
It’s a simple case of macro vs. micro focus. In this case, leading businesses are focused on understanding and stewarding the health and growth of the whole forest.The struggling or the developing models, are jumping from tree to tree with a microscope to look after their growth. Technologies and platforms rise and fall everyday. That’s why organizations benefit more from an overall adaptive and inclusive strategy to digital transformation vs. channel surfing from the innovative flavor of the month technology to another.
Organizations that seek only a short term gain, tend to be attracted to specific solutions, limited commitments to strategy, and will frequently shift directions without achieving any gains. In the Digital Age, this amounts to a form of micro-managing approach.
3. Smart businesses develop their culture and resources to simultaneously align with the digital shifts.
The successful businesses build their cultures and change mindsets in order to foster the changes that need to happen. If the attitudes and processes don’t change, the technology, tools and overall transformation goals are more likely to fail.
Part of the overall strategy is to let go of much of the centralized control for tech decisions, and distribute risk taking as a cultural norm throughout the business. The more developed and successful businesses are comfortable allowing their managers and employees to take risks when it comes to technology. In fact, their cultures are accepting of risk-taking overall.
Leading organizations are 4x more likely to invest in their people vs. the tools alone.
The Digital Age brings with it risk-filled decisions that need to be made in real time by the people on the front line. Decisions that were once made after a series of memos and meeting notes trickled up to leadership, are now ancient history upon arrival. That’s because the new digital environment is dynamic and volatile, and operates at light speed. Where other organizations struggle with paralysis by analysis, smart organizations establish a culture of risk taking and back it up by investing in skills training, and by equipping their teams with adaptive methods to make smart decisions on a regular basis. According to the study, leading organizations are 4x more likely to provide skills training than the slower, developing organizations.
To put it simply, the most successful businesses have a clear digital strategy combined with a culture and leadership poised to drive their transformations. This is the standard for success, it’s not optional. Leaders of organizations need to lead the change and hire or foster internal guides (sherpas) to help them drive the necessary shifts in culture, process, and of course, technology.