The Digital Transformation Playbook
The Digital Transformation Playbook: Rethink your business for the digital age from David Rogers Takeaways.
Is DX about Tech?
The concept of digital transformation is way more about strategy than it is about technology only, at its core. Even while this may involve updating the architecture of your IT systems, the update that is more critical is to your strategic thinking.
In the past, digital executives like chief information officers were expected to focus on automating and improving how an existing business ran.
Today, if you want to be a leader in the digital world, you have to be able to rethink and change an existing company. What line of work do you specialize in? How do you add value to your consumers’ experience?
What do you preserve within the boundaries of your business, and what processes, assets, and value ought to be located in the connections that lie outside those borders?
How do you strike a balance between your connections with consumers and other groups in order to guarantee that your business will be profitable, sustainable, and continue to grow?
Reimagining the company
To successfully reimagine your company, you will need to question a number of its fundamental assumptions. It requires you to identify blind spots, some of which you might not even be aware you have. It challenges you to think differently about every area of your business, including your customers, your competitors, the data you collect, the innovations you make, and the value you provide.
This type of rethinking is challenging, but it’s not impossible either. Businesses that were started before the Internet was widely used can easily change their ways of working and making things to fit the needs of the digital age, just like factories that were built before electricity were able to change their ways of working and making things to fit the new technology.
The sad truth is that for every business that is able to adapt its business model to the digital age, there are more that fail.
Reasons for DX failures
Why is it so hard for so many of our institutions to change and stay relevant?
- The agility low level of the organization is one of the primary causes. It is not enough to just detect and eliminate your strategic blind spots, or even to understand how the concepts of digital transformation apply to your particular sector and company.
- You must also shift the way you think about your organization. Legacy companies need to be ready to adapt to change, and they need to be able to do it very quickly.
- The size and scope of great businesses are frequently the basis of their downfall: the amazing resources that these businesses possess can turn into a snare since future decisions are held prisoner by their previous achievements.
Your company has to concentrate its efforts on the following three areas in order to build real organizational agility:
- Distributing available resources: How do you plan to choose where to put your money? Are you able to disconnect from projects and lines of company that do not have promising prospects for the future? Is it possible to use the resources from your more established company lines to help your new ventures?
- Altering the metrics that you use: What kinds of results are the top decision makers interested in measuring? Do they just relate to the already established company procedures, or are they able to help the development of new directions? At what distinct points in the process of switching to a new business model should you focus your attention on measuring?
- Adjusting the incentives: What kinds of behaviors are enabled, encouraged, and rewarded in the organization? What behaviors are not? What exactly is it that managers are responsible for? How are they selected for new roles inside the organization? Are the required adjustments in your approach supported by remuneration and recognition, or are they hampered by them?
- Conducting a DX readiness audit to assess your company’s level of preparedness for digital transformation may prove to be useful.
One way to approach the difficulty of digital transformation…
is to think of it as needing to be good at two different types of management.
- In order for your company to be successful in any kind of transition, it needs to be able to come up with really original ideas, processes, businesses, and ways of thinking.
- However, it must also have the ability to communicate these concepts or procedures to the rest of the company. This is a very different responsibility, and one that is especially challenging for huge corporations to complete successfully.
However, an organization needs quite diverse expertise to successfully incubate and integrate new ideas.
Start-up businesses and companies that invest in venture capital typically have the greatest capacity for incubation:
- Some of the skills needed for it are the ability to take risks,
- give resources to different ideas,
- welcome outsiders whose organizational culture doesn’t fit,
- give power to entrepreneurs,
- build a strong innovation process based on discovery and testing assumptions,
- keep a customer-centered view, and
- be willing to let new ventures eat up existing ones.
On the other hand, it’s usually the larger businesses that can combine and repeat successful ideas on a larger scale. Since to do this, you need:
- to build a strong business case,
- make a clear proof of concept,
- sell new ideas to different internal groups,
- find the right executive sponsorship,
- work with budgets based on business results,
- manage accountability to multiple stakeholders, and
- be able to scale up operations.
The path to success?
- The firms that are going to be successful in this new era of digital technology are going to be the ones that combine the appropriate strategic perspective with the appropriate leadership skill set.
- They will have a firm grasp on the new strategic underpinnings of the digital era and be able to apply this knowledge to the development of novel goods, services, brands, and business models.
- No matter how big they get, they will keep the organizational flexibility needed to take advantage of new opportunities.
- They will also find a balance between the skills needed to test and learn like a start-up and the skills needed to grow and work together like an enterprise.
As these companies’ strategies and business models evolve, they will continue to keep their attention fixed on the process of continuously producing new value.
No company can prosper for an extended period of time by offering the same value proposition to clients in an environment where digital change is continual.
The necessity of creating new value is now inextricably linked to the requirement of always relearning and reinventing what exactly that value will be.
Therefore, one way to think of the goal of a business is as an ongoing process of producing new value for the end user/client.
Because of the steady stream of emerging technologies and the vast array of opportunities they present, it is difficult to forecast how big the digital future will have an impact on your company or any other sector of the economy.
However, if you apply most of the advices listed above you have the ability to choose to use each new wave of change as a chance to generate new value for your clientele, whatever they may be.