Learn to Succeed with Digital Transformation

Source: Stijn Viaene (2020). Learn to Succeed with Digital Transformation. Cutter Business Technology Journal. Vol. 33; Iss. 1; pp. 32-33.

Digital transformations are hard or very hard, by default. Don’t expect things to go easy. Once you start, you’re in for a bumpy ride and perhaps a few twists and turns. Here are five conditions for success, distilled from my research, that stand out at the highest level:

1. Fully embrace the new realities of digital age competition:
a. Customer experience is value. 
        b. Customers are moving targets. 
        c. Ecosystem partnerships co-create new value. 
        d. Digital platforms boost value co-creation between ecosystem partners.

To make your enterprise future-proof, every strategic and organizational redesign decision must stand up to the test of these four realities.

2. Forge a digital-savvy team at the top. A strong top team is an absolute precondition for making the requisite bold transformation decisions and keeping transformation confidence against the backdrop of an always turbulent outside environment, catalysed by digital technology evolution. Strong top teams are driven by a strong common sense of purpose. They navigate by a common North Star that guides all transformation decisions and that is embodied in all transformation artifacts.

3. Focus on making your organisation win in the digital age. Resist jumping on the technology bandwagon out of fear or hope. Neither are business strategy. Strategy in turbulent digital times revolves around placing informed digital-savvy bets in an investment portfolio that aspires three things simultaneously: 
        a. Strengthen your core in view of the new digital realities. 
        b. Leverage the core for new, adjacent growth opportunities. 
        c. Consider self-disrupt options.

Moreover, growth is accelerated by making mindful decisions about sharing and exchanging digital resources and capabilities among the bets you decide to place.

4. Put your efforts and money where your focus is. Transformations become real when budgets are affected. In other words, rethinking strategy for the digital age without committing to a matching shift in resource allocation will turn out to be a futile exercise. Digital transformation calls for a fundamental review of all ongoing investments and change efforts. Those initiatives that no longer align with the digital transformation need to be stopped, and resources reallocated according to the new focus. Ask yourself this: if nothing gets stopped, are we really transforming?

5. Organise to stimulate new, agile ways of working. Once the top team is aligned, clear and ambitious goals have been set, and a commitment has been taken to back the strategy up with the necessary resource allocation, the challenge of digital transformation boils down to recreating your organisation in such a way that it can routinely explore and exploit digital opportunities faster than its rivals. As there is no readily available cookbook to achieve this — beyond some key organizing principles (e.g., the reliance on autonomous, multidisciplinary teamwork) and suggested, but largely experimental, organising models (e.g., the Spotify model1) — success in digital transformation will therefore ultimately depend on the ability of the organisation and its leadership to learn how to become organisationally agile faster than your rivals.

True digital leaders will excel at positioning their organisations to compete with digital products and services but will also be inspired by digital technologies for creating new, agile ways of working, capable of dealing with the turbulence on the outside. They will succeed by shaping their organisation’s digital transformation as an open invitation for everyone to contribute to this end. This way, the organisation can collectively learn how to do things differently and better, with the view of winning together.

1 In 2014, Henrik Kniberg, Lean-Agile coach working mostly with Lego and Spotify, explained the engineering culture at Spotify in two videos on the Spotify Labs blog (see Part 1 and Part 2).

About the author: Stijn Viaene is a Professor and Partner at Vlerick Business School, where he serves as the Director of the focus area Digital Transformation. He is also a Professor at the Research Center for Information System Engineering (LIRIS) at KU Leuven. He is the author of the book Digital Transformation Know How: Connecting Digital Transformation, Agility and Leadership (Leuven, Belgium: Acoo,2020 – ISBN 978-94-6379-813-6).

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