Digital transformation is complex and requires new ways of approaching strategy. Starting big, spending a lot, and assuming you have all the information is likely to produce a full-on attack from corporate antibodies – everything from risk aversion and resentment of your project to simple resistance to change.
A discovery-driven approach gets leaders past the common barriers to digital transformation. By starting small, spending a little on an ongoing portfolio of experiments, and learning a lot, you can win early supporters and early adopters. By then moving quickly and demonstrating clear impact on financial performance indicators, you can build a case for and learn your way into a digital strategy. You can also use your digitalization projects to begin an organizational transformation.
As people become more comfortable with the horizontal communications and activities that digital technologies enable, they will also embrace new ways of working. Established companies have some great advantages over new competitors: paying customers, financial resources, customer and market data, and larger talent pools. Together we will have to integrate agility and innovation into the broader organization and communicate the new ways of digital thinking while minimizing disruption to your existing business.
Discovery-driven digital transformation: the incremental advantage of incumbent firms.
Companies should always have a vision of where they want to go. But just because the world around them is changing quickly, it doesn’t mean that a response has to be. To the contrary, established companies are better off taking a more incremental approach to transformation over time.
The vision guides the organization, but they should work their way toward it by continually finding opportunities to digitize problematic processes in their core operations. When you tackle those projects, you’ll learn what metrics to use, which assumptions to revise, where new business models can be introduced, and who your new competitors might be. And as you absorb those lessons, your understanding of your competitive landscape – and the long-term goals they set for yourself – will inevitable change.
There’s a process for this kind of ongoing learning approach to strategy: discovery-driven planning. At its center is a low-cost process for quickly testing assumptions about what works, obtaining new information, and minimizing risks.
Where digital startups and scale ups can easily pivot without destroying much value, incumbent organizations cannot. But although they cannot pivot easily, the good news is that they don’t have to. Established firms have the resources to explore a variety of ideas and can more easily experiment with different processes and operations. This gives larger firms a better chance of responding effectively to a digital challenge.
Because you already have deep knowledge of your customers, you know best what they are looking for. If you put a team of people who know the customers on the job, you’ll stand a better chance of making the digital investment pay off. Whatever the goal is, it should frame the technology as an opportunity for the business rather than frame the business as an opportunity for the technology. Together we make digital transformation work.
When you apply discovery-driven planning to digital transformations, the focus is on reinventing the way you sell and deliver products or services you already make as well as on identifying how to create and deliver new value through new digital capabilities.
Making digital transformation happen is closely tied to the value you want to create and who you want to create it for. It is the fuel driving your transformation. Our maturity framework has proven itself over the years, helping clients create more value.
In order to be a world-class organization, you must have a unified strategy, brought to life by top capabilities, and enabled by a strong foundational operating model.
Create more value via organizational and operational alignment.
Building robust capabilities that will enable you to execute upon the strategy.
A sturdy framework will enable flawless execution via tools and talent.