Digitalization is driving unpredictability demanding a more rapid deployment that quickly can adapt to the changes and adjust to the new market conditions. Hence, digital strategy management takes nonlinear steps and embraces the emergent events and activities. Digital strategy making and execution are a collective effort of varying business departments to fit business purposes, leverage digital speed, and delight customers. Digital boards as the strategic advising role are also the “mastermind” behind digital transformation to oversee strategy and monitor performance. Here are a couple of digital board’s digital inquiries.
Do organizations have a digital strategy? Do existing functions and business units have a game plan for Digital transformation? Digital strategy is the process of specifying an organization's vision, goals, opportunities, and initiatives in order to maximize the business benefits of digital initiatives to the organization. Enabling technologies for digital strategy are everything from online platform to social media, knowledge base tools, mobile, etc. These can range from an enterprise focus, which considers the broader opportunities and risks that digital technologies potentially creates changes and often includes customer intelligence, collaboration, new product/market exploration, sales and service optimization, enterprise technology architectures and processes, innovation and governance; to more marketing and customer-focused efforts. Every functional unit should have their own strategies which are sub-components of the cohesive digital strategy of the company. A good strategy should identify the business challenges, make options, and take stepwise actions based on a clear roadmap to achieve the well-defined business goals and objectives.
How to make good assumptions for digital strategy making? Digital has the “VUCA” characteristics - velocity, uncertainty, complexity, and ambiguity. It implies both business opportunities and risks on the way. As far as for assumptions, sometimes it’s inevitable that you have to make them, because you will never have complete information, and if you try to only act on what you know by fact, you are more likely to go wrong or lag behind. Also, when trying to determine the macro digital environment, and how the factors there may influence your business strategic plan one way or another, it is difficult to move away entirely from assumptions. But it is still important to set digital principles to making better assumptions for strategy making. So you have to collect enough information, listen to different POVs, as everything has more than one side and you have to master them all. And sometimes it can be very worthwhile to spend extra time to solve a problem excellently. Through digesting enough information, you can perhaps discover an insight you didn't find before; or you could find a clearer way to think about the problem, which you can reuse next time. It is important to leverage systems thinking for understanding the interconnectivity of the digital ecosystem and gaining the business insight hidden underneath the surface.
Who owns Digital? Who owns which elements of digital strategy? Digital strategy should look holistically at the business and how digital technology will impact and lead transformation in all the business needs such as internal communication, supply pipeline, customer communication, etc. Senior executive teams should take co-responsibility of crafting and executing corporate digital strategy, and they could be the “owner of digital strategy.” Each functional leader owns their piece of sub-strategies, but they have to work collaboratively to ensure a cohesive strategy development and a seamless digital strategy execution. The digital strategy is not bound by one functional area (such as IT) but rather included the whole organization with a mission to increase customer experience and engagement, and hence increased market shares and revenue. A good digital business strategy answers questions like (1) Can and how digital optimize the business model or engagement model? (2) How does digital impact different business practices (sales/marketing, HR, production)? (3) How to enable digital platforms with mechanisms to ensure cross-functional communication and collaboration? 4) In terms of KPIs - Increase in sales, decrease in marketing and HR costs, optimized production, etc.
Which digital impacts have you identified? Which functions are the most impacted by Digital?
The digital makes an impact on every dimension of the business, from information management to strategy management; from products/service/business model to customer relationship management, talent and performance management. In practice, even in the simplest organizations, the industrial 'speed' is not homogenous across the enterprise. There are differences between 'front office' and 'back office'; enterprises with multiples businesses and associated business models. Different functions evolve digital with different speed. So, many organizations will have to 'mix and match' at least two different Industrial 'Speeds' with appropriate governance styles, accommodating the result in different steps of digital strategy cycles. to break down silos and ensure the business as a whole more optimal than the sum of the piece. But in all such relationships, the digital leaders need to have a very good grasp of the overall business, its strategy, marketplace, business model and competitive distinctiveness to ensure that the business solutions supplied to the enterprise deliver maximum value at acceptable cost with optimum services/solutions.
What is the talent gap when it comes to defining and executing the enterprise-level digital strategy? People are still the weakest link in digital transformation. The studies show that the majority of people are not engaged in their jobs because their talent is not being utilized, or organizations fail to put the right people with the right capability to solve the right problem at the right time. People are the most invaluable asset in businesses, at the age of digital, it is, even more, true than ever. Talent employees are treated as human capital need to be well invested to unleash the boundless potential, not just human resources counted as a cost. Organizations should both develop the updated digital practice to manage performance as well as the digital methodology to unleash potential. The top team has a significant influence on implementing Performance Management into practice in a digital way. The platinum rule - asking others how they wish to be treated. This means open communication. Asking others how they work best. What makes them tick. Treat people with courtesy, respect, and empathy. Hyperconnectivity is one of the great characteristics of digital transformation. Organizations and their people learn through their interactions with the environment. It is the responsibility of the leaders to initiate his or her team to break the silos to realize the common goals or strategy which are far more important than the personal and departmental goals.
Digital boards are like the steering wheel of their company, leading the business toward the uncharted water and blurred territories for reaching the ultimate digital destination. Although you can not predict every event happening on the journey, surely you need to proactively create a clear vision, make a dynamic strategy, and execute it via an iterative continuum, and create a business - talent synergy to accelerate the digital transformation and reap the business benefit both via both quick win and long-term benefit.