Digital Transformation Best Practice #2 Hail the Conquering Strategy

A key differentiator between a digital transformation strategy and a traditional one is that digital transformation requires innovative technology to implement. Too often, technology becomes an after-thought in strategic planning.

In my previous blog, I discussed the urgent need to become a digital enterprise and make sure all parts of your organization understand the pressing WHY. It’s now time to figure out exactly WHAT that something is. This is where you become “Digital by Design”. And, just as it was critical to communicate that "must do" nature of digital transformation, it’s equally important to communicate the objective, scope, and advantage to the organization that will be achieved through a well-articulated digital transformation strategy.

Start by thinking about the mission of your company. What is the company’s motivation for being in business? What is its purpose? Extend your thinking from the mission to the vision. What does your company want to be? What are companies that are born digital doing to change your industry? How should you respond?

An article by David Collis and Michael Rukstad in the Harvard Business Review notes, "It’s a dirty little secret: most executives cannot articulate the mission, vision, objective, scope, and advantage of their business. If they can’t, neither can anyone else." It is crucial to articulate a business strategy that provides guidance on the priorities and investments so that individual employees can make daily decisions quickly within the context of the broader strategy. Additionally, a well-articulated strategy leads to a scorecard to measure the planned benefits from digital transformation, such as how each element of the customer’s journey can be improved or how back-office processes can be simpler, faster and cheaper. The strategy should include:

  • The objective, which defines a quality of the organization that will drive the transformation and is specific, measurable, and time bound. For example, Lloyd’s Banking Group identified reducing their annual expense by £1 billion and becoming the best bank for customers as the key objective.
  • The scope, which is the domain in which the company will act. Schwab, for example, identified the customer as the most important dimension, focusing on a vertically integrated set of operations to cater to the mass affluent investor. Schwab  specialized their digital operations including talent leverage, marketing, operations, and customer engagement practices to deliver 80 percent of a full-service broker at 20 percent of the cost.
  • The advantage, which is the means by which one will compete. The advantage is the most important aspect of the digital strategy. It includes the value proposition that explains how digital will be used to make your company distinctive, as well as the activities that will allow the company alone to deliver the value proposition. PayPal’s value proposition is to provide an online payment platform leveraging digital technology to create the easiest and most secure experience possible, for example.

 

A key differentiator between a digital transformation strategy and a traditional one is that digital transformation requires innovative technology to implement. Too often, technology becomes an after-thought in strategic planning. It needs to be an integral part of the overall strategy, with identification of those technologies and technical methodologies that will best support the business objective, scope and advantage.

Now you are ready to communicate this strategy throughout your company. This is exactly what PayPal has done, building broad-based support for digital transformation from the president on down. In his PEGAWORLD 2014 presentation, Brad Strock, VP of Global Operations Technology, described how PayPal recognized this type of revolutionary change can be disruptive within an organization—likely to arouse fear, uncertainty and doubt (FUD). The company has worked hard to show employees how new technologies and new ways of doing business will benefit them. By making the effort to communicate that transformation can be a great career-building opportunity, PayPal has overcome FUD and organizational resistance to drive innovation with remarkable speed and agility.

 

 

Conquering the competition starts with conquering resistance in your own organization. By defining a Digital by Design strategy that supports your mission and vision and helping everyone understand how digital transformation can deliver benefits to them as well as the company, you are now well prepared to start down the road of digital transformation.
 

See how PayPal is pursuing a broad-based digital transformation.