Getting Started With Digital…ehh…New Organizational Strategy (Part 1)
CHAPTER 1: New Definition of Digital
I have been fortunate to work with senior executives of prominent and large financial and retail services firms here in North America over almost the last two decades. These courageous leaders know that their industry will be reshaped in the next 10 years by forces of change and broader global trends that are connected, complex, chaotic, and faster than ever before.
The combinatorial effect of exponential forces will foster greater demand for transparency and alignment from customers (and regulators), reconfigure the prevalent business processes and operations through automation, and ignite mass adoption of digital mindset by investors and customers of all generations across genders and the wealth-spectrum.
Though aware of the transformative nature of these shapeshifting forces, these leaders, like many others in incumbent businesses feel under equipped to weather the storm and steer their organizations toward sustainable growth and profitability. The existing theory of value creation for any of these incumbent companies is insufficient and majorly responsible for widening the trust gap with their customers.
These executives are looking for a new toolkit, a new, enabling playbook to emerge. Something that will get them started on their digital journey and help create responsive organizations that can thrive in the face of uncertainty. Anything that will help nurture a lean workforce displaying a bias for action, tolerance for calculated risks and desire to learn continuously.
Most senior executives I have spoken with or worked with repeat these set of questions in one way or another.
“OK! Understand that everything is changing. And nothing is permanent! So where do we start? How do we move forward?
- Do we invest in new growth initiatives, or do we focus our spend on reducing the cost and pain to comply?
- How do we find new product ideas we are uniquely suited to serve?
- Do we double-down on our existing, highly profitable channels, or do we put pressure on those channels by introducing, new, highly automated ones?
- Will we abandon profitable revenue streams that create conflicts of interests with our customers, or will we just work harder to hide them?
- How do we offer customers a unified experience while running a host of non-cooperative internal silos?
How do we get started?”
The good news is that there are uncanny patterns of similarity in the organizational challenges faced by large, traditionally successful companies in highly regulated domains; the bad news is that the unique culture, history and context of each and every enterprise make a true single response to such questions impossible.
Let me reiterate: there is no silver bullet to address complex, deep rooted concerns and transform an entire organization, industry landscape, or public perception.
There are few time tested principles and approaches I have seen work at multiple organizations — large and start-ups alike. I have heard first hand from my colleagues and professional friends that when these principles are implemented well with rigor and commitment, organizations as large as GE, Starbucks and Microsoft, or new upstarts as Betterment, Oculus and Orchard Platform have been able to the tap the energy of their employees, suppliers, distributors, and partners during this moment of great change.
Understanding these principles and weaving them into your organizational strategy demands a solid foundation in appreciating what digital is today.
Understand Today’s Digital Context
Back in 2010, having a separate digital department working on some cool “apps” allowing customers to login with their social network id was a good thing to have. Now that is dated and table stakes.
Complexity in the marketplace has exponentially increased and there is greater demand to reduce time-to-market on existing and new initiatives.
New technology platforms have become the infrastructure of prosperity in the same way roads, electricity, and telephony enabled humankind to progress in the 20th century. The workforce that implements new infrastructure demands a new way of being — empowered to make decentralized decisions. Well intentioned and structured multi-year roadmaps looks like crap in a month or two.
Digital is now omni-pervasive — it is a means-to-an-end for everything a business potentially is involved in. The deepening of digital also means lines are becoming increasingly blurred and boundaries semi-porous — both inside and outside the enterprise — as multiple networks of stakeholders bring value to each other by exploiting and exploring platform dynamics.
Despite this tumultuous array of symptoms, across most business domains, established consultants and experts are still parlaying digital as a technology shift. Most companies misunderstand that digital is a mindset shift.
Digital is a way of being that exists at the confluence of customer obsession and organizational agility at scale, enabled by cross functional, autonomous teams with technology excellence at the core.
Though a simple Venn diagram (each element representing a key principle) can explain this model rather easily (bounced this of at least 12 strategists and technologists I know), implementing all aspects of this diagram is rather challenging (covered in some detail here, here and here).
The board, the investors, and the employees blame the leadership for not being able to make this shift. The leaders blame the macroeconomic conditions and the employees for being lackadaisical, and the regulators shame the businesses by pushing new rules. The blame-shame continues while marketshare and mindshare tumble.
Looking at the above diagram, most leaders and consultants gasp and realize how digital transformation incorrectly has been labeled as a large, one-time investment or a separate initiative run by one department. The light bulb glows suddenly — to “digitally transform” means putting organizational, operational, and technological foundations in place that foster iterative understanding of the customer through cross-functional collaboration, enabling organizations to explore and exploit evidence based business models with agility.
Once you are able to implement this, there are tremendous benefits to be reaped at the intersections to become a responsive enterprise.
Do you like what you read? Ready for next chapters?
Chapter 2: Principle 1 — Customer Obsession
Chapter 3: Principle 2— Cross Functional, Autonomous Teams with Technology at the core
Chapter 4: Principle 3 — Organizational Agility at Scale
Chapter 5: Getting Started: Transformation using Enterprise AI
Feel free to reach back with comments and suggestions.
