What is a Digital Strategy?
A strategy is a coherent plan of action to achieve a goal.
The Third Industrial Revolution —the Digital one— has been going on since the 1960s, and only since the last 10 years we've been able to perceive its exponential nature. The reason why it is one of the 3 major humans Revolutions is that it brought the Information Age, which is creating a global knowledge-based society that spans over all industries. As the organisational principles of knowledge-based societies are different from traditional hierarchies and mental schemes, and because the transition is happening fast and at different speeds throughout the world, generations and cultures appear to have a more difficult time getting along.
Many companies managed to digitalise their products, services, or processes, and are now reaping the profits of exponential growth. Many other companies are still struggling. Especially those whose core business is not digital. The need for change from analog, mechanical, and electronic technology to digital technology appears largely unsubstantiated for many manufacturing companies. The hidden challenge of digitalisation is the transformation into knowledge-based organisations. Organisations in which information passes more freely, is abundant, and arguably more relevant. The relevance, correctness, and timeliness of the information trump its origin, leading to more efficiency, sales, and customer satisfaction. And ultimately, the difference between leadership and survival.
Digitalisation enables Adaptability
Recognising that a properly connected digital company operates better than a traditional organisation is easy, as examples are abundant and very visible. Admitting, however, that an organisational structure that has worked so well for many decades has become a strategic problem takes a lot of courage. For 2 reasons: first, because the consequences are not imminent, and therefore it remains a probability. Second, because it would be an implicit admission of failure. The combination of the two is a bombshell in a traditional, carreer-oriented society. We all like to have a certain visibility over the future, and often we draw straight lines from what has happened in the past, especially if everything's going well. But acting like no one saw it coming is a recipe for disaster. When the problem becomes apparent, it needs to be fixed under enormous pressure, which most often leads to bad decisions and failure. Only few very talented, cohesive, and lucky teams manage to save the day.
Relying on luck is hardly a good strategy, especially in transitional times, in which fluctuations and change happen on a daily basis. While a traditional organisation would face challenges and crisis at every change, knowledge-based companies comprise mechanisms for adaptation (e.g., real-time feedback loops) that allow them to exploit the change.
Recognising the need for change is a good first step, as it provides the goal for a transformation strategy. What is needed next for a full Digital Strategy is a coherent plan of action to transform the company into a knowledge-based organisation.
How to Successfully Achieve Digital Transformation
Operatively, there are 3 main steps to achieve Digital Transformation:
The first step is going paperless;
The second is connecting the data pipes;
The third step is automatically processing the information at speed, and exploiting the results, which includes measuring key metrics, and iteratively improve the processes upon them.
With the help of modern tools, these 3 steps are technically straightforward.
Great, where do we start?
It depends. Although there is Subject Matter Expertise, there is no standard process. The reason why Digital Transformations are difficult is because they operate on existing environments, and therefore the steps need to be prioritised, planned, and carried out possibly without service interruption. Without mentioning the need for changing mentality, and the unavoidable shifts in power.
A solid Digital Strategy solves these issues, partially through feedback mechanisms embedded in itself. Its plan contains a clear prioritisation of the key issues and the required actions to overcome them, is adapted to each situation, and maintains long-term coherence by adjusting course when needed. Because it is a deep organisational transformation, the only way it can work is through supportive leadership, and a dedicated task force.
One of the most effective tactics is to use a modified version of Shadow IT, specifically focused on developing the Digital Strategy. This tactic foresees a digitalisation task force that is composed of internal-external members, and is divided into multiple small teams (2–5 members). Each team tackles a different key issue, and has the goal of outperforming existing metrics through the high-level process of Diagnose–Prescribe–Execute:
- The Diagnosis aims to understand the critical issues using contemporary analysis approaches such as Machine Learning on Big Data.
- The Prescription synthesises the results into a guiding policy to tackle and reshape workflows.
- The Execution implements the approach using agile methodologies.
Integration of the resulting systems is naturally discouraged, and access to information and tools is guaranteed by the leadership.
The mixture of competition and direct personal collaboration is the friction point where the most important changes occur. The teams coordinate with each other through open meetings and newly-established shared knowledge bases to maintain the over-arching strategy coherent. The combined results of the teams are integrated into the specific Digital Strategy, which will already partially underway, allowing to maximize long-term value.