Michael Wade – Part 3: From Digital Strategy to Digital Enablers
Organizations need to, in the first case, realize that digital transformation is a lot more than just technology. It needs to be added, augmented, and it needs to be implemented.
“The digital technology is the foundation of transformation, but the real transformation comes through organizational change.” Michael Wade
Our model, The Digitalization Piano, breaks down the organizational change value to ten different areas and every one of these areas needs to be transformed. Those areas are in three generic categories: Digital Strategy, Digital Engagement, and Digital Enablers.
Organizations needs to develop some sort of digital strategy, which first of all, includes the value drivers the organization is using to compete. Another element of the digital strategy organizations need to understand is the go-to-market strategy. How you are reaching the markets? Is it direct, intermediate distributions, or, for example e-commerce. The third aspect of digital strategy is the product itself. Organizations need to ask: How digitized the product itself needs to be?
Organizations need to think all of these three aspects of the digital strategy.
“Organization can’t just digitize the product and expect digital transformation to happen” Michael Wade
The second category is digital engagement and we divided also this category into three areas: engagement with your workforce, engagement with your customers, and engagement with your counter parties. Digitalization can happen more or less in any these different verticals.
And it is good to remember, that it is not enough to just have a social media strategy, where you are engaging with your customers. That’s great, but unless you combine that with something else, you are probably not going to have the effect you want.
The third category is digital enablers and these are internal things that need to be dealt with in order for the transformation to be successful.
The first element of digital enablers is the organizational structure. This is a really tricky one for legacy organizations. We have findings that the organization’s structure is often a barrier to transformation. Especially if you have very strong silos in your organization, and the digital transformation crosses and breaks down those silos. Organizational structure is something to think about.
Another element is the internal process: how much can the internal processes be digitalized? The third element is, of course, IT. Yes, digital transformation is not just about technology, but unless you have stable and adaptive IT infrastructure in the back office, it is going to be really difficult to build a truly transformed organization.
The final internal thing to think about is the culture and the mindset. The stakeholders of many companies that are going through digital transformation say, that the biggest barrier or the number one barrier, is the culture. The culture has to be changed.
Leadership best practice: Digital transformation is all about people, not technology
Transformation requires thinking differently about the organizational elements across the value chain, each of which has to be addressed for the transformation to occur.
The foundation of all that is the belief in being more agile as an organization.
I define digital business transformation as organizational change through the use of digital technologies to materially improve performance.
It is a simple definition, yet difficult to master.
Certain industries have been on the vanguard of this changes. Other lag behind.
Eventually, digital will become the ‘new normal’