Digital Strategy: Precursor to Transformation

Aug 24, 2020 11:56:55 AM

Digital TransformationIn the 1975 movie Monty Python and the Holy Grail, King Arthur and his knights concoct a brilliant plan for penetrating a heavily fortified castle: Drawing on the Trojan Horse story, they build a wooden bunny (why not?) and position it outside the castle gates as a gift.

The guards dutifully pull the bunny inside. Only then do Arthur and the knights realize the critical flaw in their ruse: They were supposed to climb inside the bunny first.

Great plan; poor execution. There was gap between the strategy and the execution.

Some businesses are like that. They hear about some new thing other companies—their competitors, perhaps—are doing. They want to join in, for fear of falling behind or appearing less than forward-thinking. The fear of missing out is real. These companies spend a lot of money on initiatives in pursuit of ambiguous goals. They may declare victory, but in the end very little has changed and an opportunity to gain real competitive advantage is lost.

There are a myriad of reasons for these failures. They generally boil down to one crucial shortcoming: some companies try to implement changes without having a real strategy to guide the execution.

Digital Transformation Requires A Digital Strategy THAT IS ACTIONABLE AND MEASURABLE

Many businesses say they are pursuing “digital transformation” with a spectrum of results. Some may succeed, but more often companies are claiming success without transforming anything. What is worse is when companies let transformation initiatives become spectacular failures --  the real failure is not turning the experience into learnings to fuel a fresh approach. 

The difference in these companies is the ones that truly succeed are guided by digital strategies that are actionable and measurable. The others either have no digital strategy or there is gap between strategy and execution. Without a clear digital strategy, a path to execution and a way to measure progress, a company reduces the term “digital transformation” to buzzword status. 

What exactly is “digital transformation” and what does a good “digital strategy” look like?

Digital Transformation: A Review

AndPlus defines the term “digital transformation” as the process of organizational change brought about by the use of digital technologies and business models to improve performance. Under this definition, digital transformation must have these key characteristics:

  • Business objective; typically, a desire to improve some key performance metric
  • Foundation of one or more digital technologies
  • Organizational change; including some combination of processes, people, and strategy

Most businesses have ideas about what they’d like to improve; operating margin, customer satisfaction, or technical support calls. And the world is not suffering from a lack of digital technologies. But "organizational change" is tricky. Getting an organization to overcome its own inertia, to rethink its process from a customer-centric digital perspective, and to organize a reasonable strategy around this vision…This is where many companies struggle with the execution of digital transformation.

Formulating a Digital Strategy

An organization’s digital strategy is its roadmap for achieving digital transformation. It's as much about what the company decides to do as what it choose not to do. The strategy breaks the overall digital transformation initiative into a series of smaller projects and the roadmap sequences the order in which those projects are executed.

The first step in formulating a digital strategy is identifying which digital transformation projects to include. In large part this is a brainstorming exercise to record ideas. Any ideas that become part of the strategy should have the key characteristics: a measurable parameter to improve, a digital technology to get you there, and an organizational change to support it.

The ideas that pass muster are then organized into a sequence. Each business will have its own set of criteria to consider and performing this step, but most will include:

  • Dependencies – Some projects can’t be started before others finish due to technical reasons or resource availability.
  • Difficulty – If, like most businesses, you are new to digital transformation, don’t start with the most complex project. Get a couple of simpler ones and complete them with lessons learned before tackling something bigger.
  • Other business initiatives – Digital transformation should fit the company’s overall business strategy, including mergers, acquisitions, spinoffs, new product introductions, and more.
  • Priority – Some projects are more important than others or have greater urgency.
  • Resource availability – The same people shouldn’t work on too many projects at the same time.
  • Scope – Some projects may involve a single department or business process. Others touch multiple business processes and cross-functional teams.

Maintaining Your Digital Strategy

Once a digital strategy is defined, it shouldn’t be kept a secret—everyone in the company should know about it, why it is important, and what their role in it is. Other stakeholders, such as customers, vendors, and shareholders should know about it as well as it makes clear the priorities and aspirations of the company.

Moreover, a digital strategy shouldn’t be put away, never to be seen again. Every major decision should be made with reference to the digital strategy. Does a given action support, distract or impede the digital strategy?

A company should be open to updating and iterating on the digital strategy at least 1-2 times a year or when a major market/industry/event occurs (e.g. COVID-19 pandemic). Do elements of the strategy still make sense? Do you need to reprioritize or re-sequence work? Do projects need to be added or eliminated? What are you learning from real-world execution and results? Where are you gaining momentum? Where are you stuck?

At AndPlus, we understand the importance and value of an actionable and measurable digital strategy. Contact us today to see how we can help with yours. Without an appropriate strategy, digital transformation initiatives can end up like King Arthur’s wooden bunny: empty and ineffective.LET'S TALK

Angela Spencer

Written by Angela Spencer

Angela leads our Digital Transformation consulting practice helping clients close the gap between strategy and execution. Her extensive background and leadership in leading transformations spans strategy, operating models, governance, data and analytics, product management, agile methodologies, and managing change across organizations.

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