A start of year survey by Coeus Age Consulting has revealed that 90% of Indian enterprises are aspiring to digitally transform in 2017 and beyond. In order to fulfill their aspiration successfully, they will however require a more conscious approach.
I have observed two extremes with regards to digital transformation.
First extreme is market related. The voice in favor of a dire need propounded by many IT vendors and consultants, who paint a picture requiring a whole hog business transformation. More often than not, it is a lopsided argument in favor of their technology. The sense of emergency is common. According to them every enterprise must transform urgently and using one common template from them.
Second extreme is organization related. An almost passive approach to digital transformation adopted by many business enterprises, where anything around digital is happening randomly at the periphery of the enterprise. The organization and its leadership may otherwise not be consciously preparing for a journey around digital. There may be an aspiration but that aspiration needs concrete steps to get fulfilled.
Both, a common template of urgent digital transformation and a passive approach to embracing digital, can be risky and even value destructive.
Defining Digital Strategy!
Digital strategy is a conscious, deliberate and well thought out application of digital in line with an enterprise’s business strategy. Business strategy in a holistic combination of the competitive strategy (how shall we compete?) and operational strategy (what process capabilities we need?). Many a time the definition and its associated aspects are implicit.
A digital strategy is a broad approach in response to two questions as posed in an earlier post-
1. What is their route to profitable growth?
2. How can digital enable that route from both competitive and operational perspectives?
This post highlights 5 such approached to digital strategy in response to the two questions related to the enterprise’s business strategy.
I think it’s time for every CEO of every organization to answer a basic question ‘What’s your digital strategy?’ The question subsumes another more basic question ‘is there a digital strategy?’
#1 Is there a digital strategy?
What kinds of initiatives are happening around digital in your organization? Who is driving them? Are they local and individual phenomena or some bigger force driving them? What is the digital related discourse? Are you undertaking steps like new structures and mechanisms, technology overhaul, role definitions, skill building etc. to build digital preparedness?
Answers to these questions shall help you answer the moot question ‘is there a digital strategy?’
#2 What is your digital strategy?
There cannot be one single strategy fitting every business context. Each business shall require a unique and customized digital strategy, which shall drive individual projects and initiatives.
My research has revealed two important dimensions that affect the specific digital strategy of an organization – strategic orientation (defend or disrupt) and transformation focus (evolutionary and revolutionary).
Both of them are a conscious decision by the business leadership based on their assessment of the external reality, their market position, their choices and the internal change readiness. Every organization will have their way of looking at competitive and business strategy and that shall have a bearing on their digital strategy.
In my book LEADDDING, I have used these two dimensions to identify five approaches to digital strategy – tactical adjustments, functional initiatives, strategic overhaul, value chain disruption, and balancing extremes.
The several case studies of high digital score enterprises supports the framework as there is instance of each type of approach being explored by some organization from the list, proving the point that each organization shall define its approach to digital strategy based on its strategic orientation and transformation focus. An enterprise can be a high digital score enterprise by following different approach to digital strategy.
There are two additional important points I wish to make here.
Firstly, the approach to digital strategy cannot remain static; it shall evolve based on the shifts in the underlying aspects of strategic orientation and transformation focus.
Secondly, with each approach is associated specific advantages and disadvantages, the organization must remain aware of the same. In the book LEADDDING, I have also described the five approaches in terms of their defining characteristics and associated benefits and risks.