Thought Report: Moving from what’s possible to what’s optimal

Harnessing the power of digital is key to every successful business. It’s a word many businesses talk about — but are we all talking the same language? Let’s start on the same page by unpicking some of the common ones:

Digital. The use of digital technologies and resources to drive efficiency in every-day business operations, and unlock new revenue opportunities and enhance their market performance. Digital technologies can also provide personalised and more meaningful experiences for customers.

Digital Transformation. This is where businesses re-imagine the way they operate through the adoption of new digital processes, tools, and ways of working.

Digital Dexterity. It’s the ability and desire of an organisation to adopt new ways of working leveraging digital tools and technology to increase efficiency and effectiveness whilst driving innovation and sustainable growth. Digital dexterity is just as much about the mindset, skills and culture required to embed change as it is about the tools and processes.

No mean feat. Digital workplace spending is set to grow to £35.7 billion in 2023. To capitalise on that investment, leaders need to strike the balance between digital, digital transformation and digital dexterity.

In order for an organisation to be digitally dexterous, the tools, tech and processes need to be carefully balanced with a culture and mindset that unlocks the potential that digital has to offer.

The last part is where most digital transformations fail. It’s also a term that’s not very well-known — even though businesses and leaders will already be facing some of the issues surrounding it. That’s why we’re focusing this report on digital dexterity’, the less well-known term but the essential foundation for success in any digital strategy.

Part 1 — Digital Dexterity: Moving from what’s possible to what’s optimal.

Digital is no longer a ‘nice to have’ but a ‘must have’. Digital transformation has been driven by waves of new tech we now take for granted like the internet, mobile, and cloud computing. It has enabled businesses to streamline operations, reach new markets, and offer new services.

Step back a few years when the COVID-19 pandemic hit, you may remember the pace of digital transformation. It hit supersonic speeds as companies had to adapt quickly to adjust their ways of working and keep connected to their customers. In the first year alone companies accelerated the digitisation of their customer and supply-chain interactions and of their internal operations by three to four years. The speed in which digital accelerated during this time highlighted the need to upskill people. There were numerous challenges around the adoption of new digital tools and processes and the pace with which digital was being integrated into employees’ work. This has been attributed to the lack of understanding of how to use the tools, or appreciation of the value they could bring.

Fast forward to now and the focus continues with digital workplace investment growing to 35.7 billion in 2023. Along with the change in how we work, with over 90% of organisations moving to hybrid work, a digitally skilled workforce is critical to its success and realising that investment.

That’s digital dexterity: the foundation of all successful digital strategies. It represents the collective readiness and competency of an organisation to embrace and thrive with digital — not just those who are digitally savvy.

A term first coined by Gartner in 2018, it’s risen to the top of the boardroom agenda over the last couple of years as businesses realise that success isn’t just being digital on the surface, it’s helping their people adapt and adopt digital successfully.

Only 16% of all leaders and 9% of employees are said to have ‘high’ digital dexterity.

That’s a worrying stat. Coupled with a rocky economy, socio-political turbulence, changing consumer and employee needs along with the evolution of hybrid work — and everything feels unstable. There are some certainties: we rely heavily on digital tools every single day, the pace of change will continue to run at speed and the way we now work has changed forever.

‘You’re on mute’ became the sentence of the pandemic. Now we’d all struggle to remember a time pre-Zoom, Slack and virtual whiteboards. After a while the tools we needed to make virtual meetings a reality are now just the norm. But having the tools is only one part of the equation. The processes, rhythms and rituals embedded in the ecosystem of an organisation along with mindsets, capabilities, behaviours and attitudes of the people using them are the true metrics of success. Now is the point in time to interrogate how all of this is serving an organisation, its people and its customers.

The business case is clear. Digitally skilled workers gain on average an extra 35 minutes daily, and 76% of leaders believe that digital skills improve their bottom line.

What’s also clear. This isn’t just a CTO or Head of Digital/Transformation problem — it will only work if all business leaders pull together, understand the importance of digital dexterity and unite in the mission to harness the power of digital — for people, for customers, for the greater good.

Nike is one example of a business truly embracing digital in the boardroom as part of its digital transformation efforts. As Monique Matheson, Chief HR Officer put it: “One of the best pivots that we made to get the executive team on board was to make it clear that this investment is not for HR…this investment is for the company [and] our employees.”

In order to cultivate digital dexterity, businesses must first understand what it is, why it’s important and why it should be on everyone’s agenda.

This is the first part of our next Magnetic Thought Report, sign up to our newsletter for early access to the full report.

Natalia Walters is a Business Director at Magnetic, a design and innovation company that helps design better futures. We’ve worked with global businesses to build capabilities, products, services and transform organisations. To find out more, get in touch: natalia.walters@wearemagnetic.com.