Leading brands are continuing to pursue
digital innovation and are disrupting established industries in the process.
Amazon, for instance, started in e-commerce but is now entering the retail
grocery business with a fully digital checkout process. Moves like this have
led companies of all sizes to focus on digital transformation
the acceleration of activities, processes, and competencies to fully take
advantage of digital technologies.
Companies are investing a lot of money and resources into digital transformation strategy, but to
win, they’ll need a strategic approach. Digital transformation, after all, is
not a sprint, it’s a marathon. To get the most out of their digital strategy,
companies need to get a pulse on the changing market and adjust their approach
accordingly.
We identified four ways innovative
companies are shaping their digital transformation strategy. Following these
examples will help business leaders create a thoughtful approach that drives
change in the entire organization.
1.
Look past your competitors
The impetus behind many digital
transformation initiatives is fear, fear that a competitor will beat you to the
punch, or that a disruptor will leave you behind. There is a good reason to
fear. The average lifespan of S&P 500 companies has declined from 61 years
in 1958 to about 20 years now, indicating that disruption rather than longevity
is the new norm.
Disruption can come from anywhere, so
companies can’t afford to just analyze what their closest competitors are up
to. They need to look upstream to the changes in other industries that will
inevitably permeate their own as well.
General Electric (GE) was able to
successfully make a digital leap, in part because it looked outside of its
industry for inspiration and insight. Instead of just watching its direct
competitors, the company studied innovative companies in industries like tech.
It hired people from outside the industry, including Bill Ruh, who had
experience developing advanced solutions from Cisco. GE also teamed up with
various incubation labs to gain experience working with start-ups.
By expanding its point of view, GE was able
to launch the Predix platform, an Internet of Things platform that allows
industrial machines to be monitored and optimized digitally. Analyzing trends in
other industries put GE ahead of its competitors today, pulling off an
impressive initiative that’s already landed them the business of companies like
Pitney Bowes.
2.
Ask your customers
Without understanding your target audience,
your digital strategy will only ever be an educated guess. Saudi Telecom
Company (STC), a $12 billion telecom company, sensed something had shifted in
its target audience and understood that it needs to launch new digital
initiatives. Instead of crafting a generic digital strategy, STC hired a team
of researchers to study the habits and lifestyles of millennials in the
country. Specifically, the company was interested in understanding the pain
points of young consumers.
According to CEO Subhra Das, “We then had
to rely on creativity, great design and cutting-edge tech to address the pain
points and their needs using the power of digital.” The result was a business
unit called Jawwy that is successfully reaching Saudi’s digital natives. Among
other things, Jawwy offers new ways of managing mobile plans and support
functions such as billing and charging—activities that millennial customers are
looking for.
Jawwy had a simple mandate: understand the
pain points of the company’s target customers, and work backward to design a
digital solution. For Jawwy, customer insight was not an afterthought; it was
the fundamental cornerstone of the digital strategy.
3.
Use executive influence
Some executive teams in large organizations
are launching innovation hubs to do digital thinking for them. This strategy
can be effective when there’s a specific plan to test digital initiatives. In
2015, for instance, Scotiabank launched Digital Factory, a tech accelerator
unit that helps identify areas for improvement in the company’s processes. Tech
experts in this hub examine the customer experience and aim to offer solutions
to the most pressing pain points.
A typical problem with these digital hubs,
however, is that they lack appropriate executive leadership. As a recent
Harvard Business Review article pointed out, “Only the CEO has the power to
provide this kind of [digital] direction across the entire enterprise.” For a
thorough digital transformation to take place, nothing less than an executive’s
direction will do.
Consider the example from Alan Mulally,
former CEO of Ford, who led the company through a digital transformation after
the 2008 recession. He created a business plan and shared it with his executive
team in a weekly meeting. That meeting was mirrored at every level of the
organization, all the way down to front-line employees. Managers then closed
the feedback loop by sharing employee insight with the executive team.
Ultimately, Mulally set the high-level
agenda while also considering feedback from the entire organization. Your
digital strategy could fail to get off the ground without executive support,
but it may also have large organizational gaps without input from the right
stakeholders. Finding the right balance is key to a successful digital
transformation.
4.
Align your company culture
Peter Drucker, the renowned management
expert, famously said, “Culture eats strategy for breakfast.” Even the most
informed digital strategy with executive support will lack staying power
without the right culture to sustain it. For example, when Adobe decided to
make the transition from physical software to a cloud-based model, it knew it
needed to shift its employees’ focus towards the needs of the customer. To
achieve this, it created a staff Experience-a-thon, where employees could test
and provide feedback on Adobe products, not from their viewpoint as employees,
but as users.
Employee engagement was a key strategy during Adobe’s shift to
becoming a cloud company.
While each company faces unique challenges,
a digital initiative has to be accompanied by a meaningful cultural change that
will sustain the transformation into the future. Start with the customer
experience. A deep understanding of your customers’ motivations and intentions
is a critical starting point for any digital transformation initiative.
In this new technological age making smart
use of digital transformation technologies in your business can pave the way to
success for your firm.
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