By Stijn Viaene
Professor Stijn Viaene sheds light on the essential role of strategy in the digital age. The article further elaborates on what really constitutes a successful digital transformation. Is it simply launching yourself to the plethora of digital disruptions around you? Or does doing so might bring you to your own “death”?
The technology hype cycle has a new flavour of digital every year. There is a constant temptation to jump onto the technology bandwagon out of hope, or fear of being left behind. Hope and fear are strong drivers but make for bad advisors. If your so-called digital transformation1 only focuses on the exciting, new digital technologies, and not on the whole business ecology, you will quickly find you have spent yourself to death. Launching a bunch of digital initiatives that go in all sorts of directions does not constitute transformation.
Thus, digital leaders reimagine their business strategies for the new digital realities. Strategy, not technology per se, drives successful digital transformations. Without high intention at the outset, even the most sincere efforts won’t make your transformation work. The ability to make bold, though wise strategic choices of many alternatives, against the backdrop of a volatile, uncertain, complex and ambiguous (VUCA) world catalysed by digitisation, separates the winners from the losers.
The Case for Radical Action
Balancing the need to stay ahead of the changes and adapt rapidly, with the need to deliver results can be overwhelming and can lead businesses to rash decisions. To move into the digital economy with confidence, executive teams need to see and feel the inadequacy of their current enterprises competing in the way they have done before.
Recognising that there is a set of new realities driving competition should be the starting point for any digital transformation impetus:2
• Customer experience is value. Customers want to take control over their lives’ journeys – and digital allows them to do so. Winners use digital to design great customer experiences connecting the physical and the digital worlds seamlessly.
• Customers are moving targets. With digital, customers switching between competing value propositions is the rule rather than the exception. Winners use digital to successfully staple themselves to the customer’s digital self to stay relevant and appealing.
• Business ecosystems co-create value. No single organisation owns all of the data, digital skills and capabilities to compete for today’s demanding and dynamic digital customer. Winners bring partners to the table to grow the pie by competing together.
• Digital platforms boost value co-creation. Your digital innovation capability depends on how effective you are at combining your digital assets with those of others. Today’s most valuable business ecosystems are enabled by digital platforms – carefully managed architectures of reusable digital assets.
Take your time to understand the true nature of value creation in the digital space, the critical capabilities that need to be built, both technological and business, and the new skills that need to be developed in view of these four realities. Go out on discovery missions, let others inspire you with their scouting assignments, listen to the markets, experience the new normal. Invite external challengers, consultants, entrepreneurs and experts to act as drivers and disrupt traditional thinking. Celebrate when you find confrontational data that challenges constraints and the status quo.
As an executive, don’t just accept what others oracle or preach. Do your own critical environment analysis, get involved, be a scout, and then, as an executive team, make your own synthesis. Use this case for action to set high ambitions and ramp up the heat for business transformation.