Five Trademarks of Successful Digital Transformation
Nowadays, it would be unwise not to have business completed a digital transformation or not yet to start it, which harnesses the full power of digital technology to rethink every aspect of the company. But a number of takeaway are weighing more than others, navigating the direction of transformation.
First, company owners having the greatest chance of succeeding in pursuing digital transformation say their organizations are relentlessly focused on a handful of digital topics relevant to performance outcomes. In determining the scope of their transformation, these successful organizations have the audacity to work enterprise-wide and build new businesses. They also created an adaptive design that allows for conversion strategies and resource allocation to be adjusted over time. Additionally, they adopt agile execution practices and mindsets by encouraging risk-taking and collaboration across the organization’s various departments. Furthermore, in successful efforts, leadership and accountability are very clear about each part of the transformation.
Relentlessly focus on a see-through set of objectives
· How well do you know where change is occurring?
· Do you know which customer journeys matter?
· Are your teams collaborating across functions?
When considering a response to digital disruptions, organizations face many critical choices. For example, what will need to defund their own initiatives to free up resources for the ones that perform well or reflect higher-priority objectives?
A McKinsey’s research shows that with successful digital transformations, those respondents saying that their organizations keep efforts focused on a few digital themes, are 1.7 times more than the others — that is, the high-level objectives for the transformation, such as driving innovation, improving productivity, or reshaping an end-to-end customer journey — that are tied to business outcomes, rather than pursuing many different agendas. At successful organizations, accountability for those objectives also spans the organization. These respondents are 3.7 times more likely than others to report a shared sense of accountability for meeting their transformations’ objectives. They also stated that their organizations were already aware of the financial impact of their initiatives; for instance, they estimated the impact based on the company’s current business momentum and near- and long-term scenario models.
Bold Strategies win when setting the scope
McKinsey found a mismatch between today’s digital investments and the dimensions in which digitization is most significantly affecting revenue and profit growth. They also confirmed that winners invest more, and more broadly and boldly, than other companies do.
Despite getting left behind by digital first movers can be hazardous to company’s future, many executives may perceive responding to digital as hazardous to their own future, which aggravates the social side of strategy and breeds strategic inertia. If business owners want to make big digital moves, they must fight the fear that their top team and managers will inevitably experience. Two efficient practices will be
Honest dialogue
In workshops, executives can discuss the specific mindsets and behavioral shifts needed to gain “ownership” of digital initiatives as a group and to become role models for their organizations.
Support Networks
Over time, the role of communities grows to include skill-building activities, such as bringing in speakers with specialized capabilities and motivational messages and organizing industry pioneers go-and-sees that reinforce the importance of leading digital change. The communities can also provide peer support to help teams navigate the new landscape.
Create an adaptive design
One of the biggest factors that differentiate the top economic performers from others is how quick and adaptable they are in setting, executing, and adjusting their digital strategies — in other words, the velocity and adaptability of their operating models for digital strategy. Another research from McKinsey shows that successful respondents in digital transformation are more likely three times than others to experience monthly adjustments to their strategic plans regarding the projects progress as well as the changing environmental factors.
As the pace of digital-related changes continues to accelerate, companies are required to make larger bets and to reallocate capital and people more quickly.
Adopt agile execution approaches and mindsets
Several fundamental trademarks are involved in agile organizations. For example, mindsets shifting from capturing value from competitors, customers, suppliers and shareholders to co-creating value with abundant resources the companies possess. This is also names as North Star strategy embodied cross the organization. Another shift would be from giving and taking orders to taking care of each other within the organization and delivering exceptional results together.
Make leadership and accountability crystal clear
Getting leaders to agree upon the best way forward can be challenging, but the survey results suggest a need for consensus. Because digital is so ubiquitous and affects so many aspects of customer behavior and company operations, it can be difficult to know where to begin. To demystify the process and bring structure to it, leaders should review the new frontiers where big changes are happening, the core elements of the business affected by change, and the foundations needed to support the change. Also, leaders at these organizations are more likely to communicate their transformations’ progress regularly to the markets.
Today’s leaders need to step up by persuading their organizations that digital strategies may be tougher than other strategies but are potentially more rewarding — and well worth the bolder bets and cultural reforms required.
First, to survive and, ultimately, to thrive.
— Signing off
— Charles
