The Chief Digital Officer’s Playbook for Digital Transformation
By Jim Sinur
(Aragon Research) – Aragon identifies the three most common strategies used to approach digital transformation, the pitfalls to avoid, and the steps for success.
Digital transformation is a team sport: Your culture and leadership are the two most important factors that will influence your organization’s approach to transforming digitally. Without the support of both, there will be too much friction to implement meaningful change.
We’ve outlined the three most common approaches to Digital Transformation to help you identify which one(s) may be present or lacking in your current organization, and the pitfalls and benefits of each. Use this as a guide to view the strengths and weaknesses of your current approach and to consider the best course of action for your organizational needs.
Approach 1: Wait for Proof of Digital Success
Are you overseeing—or working to transform— a change-averse culture? This approach is most likely what you’re up against. Organizations who adopt this approach are overly cautious, and are often skeptical toward digital efforts.
Benefits: Will help organizations that are focused on empirical results and who are risk-adverse in nature.
Risks: In the current market, there is too large a risk in waiting and doing nothing.
How to Navigate: Help your leadership team understand that digital journey success is enabling your competitors to distance themselves from your organization and accelerate fast. This approach is a large bet against digital transformation; even for a cautious organization, this risk alone should help to convince leadership they need to act now.
Approach 2: Develop a Holistic Digital Strategy
Are you operating under a meticulous leadership or detail-savvy culture? You might recognize this approach, which concentrates on getting the strategy as perfect and near-complete as possible up front. This requires a bold, long-term orientation that counteracts short-term financial performance.
Benefits: This approach concentrates on changing your culture and implementing change in a rapid and agile fashion, which requires an appetite for risk and great patience.
Risks: This approach is usually quite expensive and assumes that the target is more stable than it actually may be.
How to Navigate: While there are some key stable activities that make sense to target and communicate, your approach to digital transformation needs to be flexible and assume that the target very well may change.
Approach 3: Exercise Digital Dexterity Utilizing Incremental Delivery
Are you operating in a relatively flexible, open-minded culture and leadership, who adapt well to change? This approach is a great fit, as it concentrates on delivering benefits along the way to a potential changing digital destination. It leverages on-ramps in an exploitative fashion and build/morphs into an overall journey or sets of journeys.
Benefits: While some of an initial target is identified and a possible route to the target is selected, lessons learned and new inputs are constantly considered to alter the target and path to the destination can change. This means that the approach can adapt to fit the target as it changes. There’s also a big benefit to your people: As their competencies and skills evolve, they will be participating in creating a new digital culture.
Risks: The strategy will not be perfect at the start, because it is one that is intended to be moldable, which may cause friction.
How to Navigate: While this is a close-to-ideal approach for digital transformation, it may not be right for all organizations, as it requires incremental delivery. If your organization falls into this category, leverage key components from this strategy—such as taking into account new inputs learned to refine your strategy.
It’s Time to Call the Play
It is likely that your organization will have leadership members who will be drawn to each of these approaches. As the leader of digital transformation in your company, we offer these key pieces of advisory:
- It is dangerous to develop a holistic approach until there is a base of competencies, skills and experiences related to digital.
- If your digital literacy is not up to speed, work on developing your organization’s skills before deciding on a best-fit approach.
- Most importantly: It is even more dangerous to lack a consistent executive strategy for digital. All executives need to be on board and move forward as a united front, before communicating the plan to the rest of the team.