From ‘doing digital’ to ‘being digital’
Digital transformation and digital DNA
Many organizations are aware of the urgency of digital transformation. But not many know what true digital transformation is – and where to start. How do you move from ‘doing digital’ to ‘being digital’? What are the implications for your business model, people, culture, leadership, technology and legacy?
The digital era demands leaders to respond boldly
The digital era creates significant opportunities and threats for companies in all industries. Directly impacting top- and bottom-line it demands executives to rethink their business model, remodel their enterprise and remake their leadership. Every organization has the opportunity to embrace significant growth opportunities by looking beyond the traditional products and service models. At the same time, commoditization and digitalization of services has created an urgency to dramatically simplify and transform the customer engagement and the efficiency of existing operations.
Digital transformation goes way beyond digitizing the present
One of the misconceptions about digital transformation is that it simply means digitizing the present; the current way you run your business or how you interact with clients. It does not. The opportunity is much bigger. Take for instance the opportunity in customer engagement. This is not simply a matter of digitizing the existing touchpoints. It is about reimagining new levels and ways of engagement to get close to your customer. Digital transformation is about moving from a traditional organization that initiates digital projects to a digital organization with an integrated strategy that makes your company digital at the core – your company’s DNA. There are several paths, various models and many examples, since a transformation journey is different for any company, depending on its own unique DNA and context. However, we do see some general steps on this journey that we will discuss below.
It starts with going back to your purpose
Digital transformation ideally starts with going back to your purpose defining the role of your company in the digital era. Who do you want to be? What is the value of your company for your customers in the digital era? This precedes the rethinking of your strategy. It brings you back to the root question of why you exist as a company. Going back to your purpose and rethinking the role you play might change the perspective on the value space in which you can operate as a company. For instance, a car company producing cars might change its value space to mobility, investing in carpool apps and other related tasks.
Reimagining your business
This is what we call reimagining your business: exploring the digital possibilities of your purpose and redefining your business model to make it futureproof. This requires a long term vision, creating a compelling ‘North Star’ rather than a long term strategy. After all, developing and implementing a strategy will take years. Our world is changing too rapidly to follow such a long term track. Organizations that focus on a clear North Star – where they want to be within 5 or 10 years – instead of a detailed strategy are much more agile and able to react quickly to new developments and the opportunities that e.g. exponential technologies have to offer.
Choosing a transformation model
Next to redefining the business model, it is crucial to choose a transformation model. Where and how will you start to drive this transformation? For instance, you can choose to start the transformation outside of your company by building your ‘nightmare competitor’ in order to disrupt yourself before others do, and have the new venture overtime cannibalize and replace the current company. Or you could start innovation at the edge of your company, test it, scale it and bring it back into the organization. The third model is based on starting your company fully digital at the core. Currently we see most of our clients working with model 2.
Aligning for the digital era
The third step is aligning the organization for the digital future. Becoming truly digital will only work if the entire organization is attuned and aware why the transformation is necessary and is aligned with their capabilities. This involves people, organization, technology, ecosystems and legacy. What capabilities and skills do you need in the digital era? How do you build new leadership that rewards innovation, experimentation, learning, and customer-centric design thinking? How do you organize your company to make sure your talent will flourish in the digital era? How do you make your IT landscape future proof and flexible enough to swiftly respond to external changes? To embark on this step it might help to run a reference model based digital maturity assessment which will help navigate the journey, identifying where to start, what gaps exist, and where to focus effort and investment. Such an assessment will complement existing transformation plans and objectives, acting as an independent guide to drive internal alignment on where you are today and what needs to change in order to become digital by default. We designed a survey to create a benchmark on digital maturity within the Netherlands. This year's Digital DNA Survey is now open for participation.
Along with all the above steps a new culture needs to be built from the start of your transformation journey. A culture of vision, trust and freedom where failure is accepted in order to truly make a leap frog forward. Inspired by distributed leadership with a clear long term view, which offers talent the opportunity to get engaged and find out how to contribute, how to build towards the North Star and how fulfill the purpose.