How can organizations become more proactive about defining and making timely, significant changes to compete in a digital world?
Most define their digital strategies to compete more effectively but, rather than starting with a clear vision, companies look to industry leaders, vendors or attend industry trade shows to gather ideas.
Adapting another company’s approach presents critical challenges such as how your specific industry and organizational culture compare. Are your goals the same, would your organization replicate the “digital template”, and would it automatically duplicate others’ results?
These reactive initiatives often start in isolation and are, therefore, not strategic at all.
While reactive approaches can help, proactive digital strategies are guided by analysis, prioritization, and structuring of goals and objectives to survive, compete, or grow. They are about embracing the best version of you by leveraging innovation.
Proactivity in practice
Running internal “hackathons” to innovate and find better ways of doing things can be highly effective, especially if including customers, employees, and partners involved in the organization’s work. For example, Hewlett Packard’s “HP Garage” hackathon – co-created by key customers – resulted in a change management functionality in the software product the client wanted and ultimately bought.
Equally, at Motorola Solutions, a services hackathon focused on pulling together various groups and technologies led to developing a better workflow and approach to providing operational efficiency that increases customer satisfaction with consistent service delivery.
When stakeholders are empowered to innovate and change the direction of the organization, they will change it, rethinking the way decisions are made and implemented and altering governance models to afford more trust.
Where to start with digital strategy?
How does a company embed a holistic and strategic digital approach that becomes consistent and repeatable across the organization?
The key is to start with the enterprise purpose, vision, understanding where you are and then orchestrate individual initiatives across the organization that are aligned to its objectives.
In any organization, where there are competing priorities the challenge for implementing a strategy is getting everyone on the same page. Therefore, developing the right mindset and culture is vital to work out not just what is interesting for the organization, but what is strategically important.
The ITIL® 4 Digital and IT Strategy guidance outline particular elements that a digital strategy needs to ensure alignment with business goals:
This recognizes that the organization needs to either innovate and change its business model or go out of business, e.g., Netflix moving from DVDs to online streaming services to new content creators.
Ability to tolerate disruption
This is about how tolerant the organization is when facing uncertainty and whether it can continually innovate and change while recognizing that many innovations will fail to find those that succeed. (e.g., Adobe transition to subscription).
Some innovations build on existing capabilities and require little change to the organization while others completely replace the preceding technology (e.g., newspapers or magazines going entirely digital).
Organizations must decide whether innovation – if it deviates from core objectives – will be allowed to change the fundamental strategy.
This is the ratio between innovation scope and the outcome achieved. Leverage refers to innovations that are easy to build/adapt but deliver significant benefits.
This is about understanding the organization’s typical response to risk based on risk capacity, appetite, tolerance, and threshold.
Incentive to innovate
How fast the organization allocates resources to innovation and recognizes the value of early failure.
Establishing a genuine cross-organizational digital strategy
“Innovate to thrive” should be a cultural mindset in which companies recognize the need to change. Events such as the global pandemic have only accelerated this.
Ultimately, the CEO’s vision and direction should encourage the right mindset for a digital strategy that works across the organization. And if you are a manager or director aspiring to become the CTO or CIO, ITIL 4 Digital and IT Strategy offers you the playbook.
Not only does it come from a well-established and trusted source, but the guidance will also inspire, give you the tools when it is your turn to run the show, and help individuals and organizations embrace digital transformation. I also see this guidance in MBA students' hands, enabling them to make the right connections between digital/IT and business goals.
For me, being part of the writing team on this book has changed the way I think about the relative importance of technology and culture/mindset. If the latter elements are not in place, technology will not save you.