As the global economy becomes increasingly digital, the underpinning technologies are dramatically altering the power balance between companies and their customers. While the customer benefits from the access to information and choice between offerings, digital technologies will also significantly improve the performance of well managed organisations.
Every business, large or small, local or global, must work on turning itself into a digital business. This means leveraging digital capabilities and tapping into the ecosystem to continually improve customer outcomes and, in parallel, increase operational agility. The C-suite must work on reinventing the organisation with digital at the core of the business model – anything else will lead to customer defection and, ultimately, distinction.
Succeeding in a digital world means a lot more than just developing a digital strategy. Instead, it means digitising the business strategy by placing technology at the core of how the business acquires, serves and retains customers while working relentlessly to attract the best global talent with digital skills. As Sam Walton, Founder of Walmart said:
There is only one boss. The customer. He can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.
Today’s successful digital businesses such as Alibaba, Tencent, Baidu, and Google, use digital technologies to bring actionable insight into almost every decision they make to create competitive advantages across the customer lifecycle and business value chain. If we look to some of these leaders for clues as to what is required to win with digital, it is clear that business leaders must improve their organisational maturity across the following five dimensions:
- Business strategy: Business leaders must focus on opportunities that drive valuable customer outcomes. Digitising the business strategy can start with using digital technologies to improve the customer experience across touchpoints. Following that, technologies such as public cloud, next-gen BI, AI, APIs, IoT and blockchain should be used to unlock new types of customer value. Additionally, further benefits can be created by tapping into digital ecosystems to, e.g. work with partners or customers on co-creating new products or services.
- Skills and talent: Attracting and retaining innovative talent with digital skills is of paramount importance. Digital leaders should work with their peers in HR to determine which critical digital skills are required to transform the business and focus on bringing on board or contracting with the best ones the business can afford. Work on empowering all employees’ speed and agility with digital productivity and collaboration tools such as Slack, Microsoft Teams or Microsoft Surface Hub 2.
- Organisational culture: For any transformation to succeed, CEOs need to address cultural gaps to ensure that everyone is on the same page as to where the organisation is going, and why. With that in place, focus on fostering a culture of innovation and continued refinement through insight-driven decision-making from top to bottom. With the right organisational culture, almost anything can be achieved.
- Technology: Do what must be done to drive business growth using digital technologies. In the short term, you need to invest in technologies that help delight your customers and keep them engaged. Businesses need to build out a flexible cloud-based technology platform that allows it to scale and grow the business while adopting emerging technologies to differentiate and disrupt with new products and services.
- Structure: Establish and organise as you see fit to show some initial success with your digital transformation, but be aware that, as your capabilities mature, you need to break down departmental silos by using cross-functional teams to organise around the customer. Once digital technologies have become core to how you run your business, you need to look to next-generation purpose-driven organisational structures that foster three essential characteristics of highly motivated employees - purpose, autonomy, and mastery.
In my second part of this blog, I will discuss the four guiding principles that you should adhere to as you execute on your digitised business strategy. Stay tuned!