Digital Playbook 2017

Executive summary

To stay competitive organisations need to move beyond skin-deep digital initiatives and adopt deeper pervasive transformation. This is about more than technology, it’s about embedding innovation at the core of the organisation’s culture and practices.

Organisations who focus initiatives across the 6 layers of the Digital Playbook achieve the best results. The first step is top-level commitment, then developing strong digital leadership to guide the organisation through the rest of the journey.

The prize

Only 16% of organisations are digital winners. Digital winners are 38% more likely to report strong revenue and profit growth.

“High-performing companies in digital leadership are 1.5x more likely to use technology to knock out competition”—Oxford Economics Research.

Digital benefits are there to be realised around:

  • Back-of-house process efficiencies through optimisation and automation
  • Customer experience improvements leading to increased retention of customers
  • Increased and business intelligence to guide future innovation
  • Better opportunities for customer engagement and acquisition

Challenges in 2017

For most companies, digital transformation is a pipe-dream, with superficial initiatives completed at best. These organisations are not seeing the benefits of digital, and are at risk of being disrupted in the near future by existing competitors or new entrants to the marketplace.

Simultaneously, global and industry trends are making it more difficult for organisations to keep up with the expectations of customers, staff and stakeholders:

  • Customer expectations for digital technology have increased and continue to expand, adding pressure on organisations to keep up—see Digital Immersion trend.
  • Many technology options exist now from cloud service providers, exacerbating the expectations and complexity of stakeholder requirements. Most are not viable enterprise solutions in terms of scale or integration, however they still increase pressure on IT departments to deliver the impossible.
  • Staff are more likely to be seeking self-actualisation through their work, they are now best motivated by workplaces that support their development and when they can clearly see their contribution to something greater than themselves—refer Great Expectations trend.
  • Less resources both natural and fiscal are available making it challenging for organisations to invest in the transformation they need—refer More From Less trend.

As a result, most technology transformation projects fail or significantly under-deliver.

Gaps

Key gaps identified through meta-analysis of the research exist around:

Digital leadership, executives do not have enough depth of understanding around digital and technology to make effective decisions.

Stakeholder and change management, solutions are delivered but not accepted or adopted by stakeholders.

Requirements management, overly ambitious and complex solutions are sought, setting initiatives up for failure.

A lack of understanding and commitment from the highest levels of the organisation.

Digital Playbook

“Digital transformation is really more of a leadership, culture, strategy, and talent issue than a technology issue”—Mike Myatt, Forbes

Digital winners stay ahead of digital disruption and address these gaps by embracing change at key layers across the organisation:

  • Top-level commitment
  • Innovation culture
  • Digital strategy
  • Digital leadership
  • Digital capability
  • Technology platforms

Top-level commitment

“Real digital transformation occurs when business models and methods are reimagined by courageous leaders willing to manage opportunity more than risk, focus on next practices more than best practices and who are committed to beating their competition to the future.” —Mike Myatt, Forbes

Many successful transformations have taken place in organisations by stealth, in spite of resistance from areas of the organisation. But there is no substitute for real vision and commitment from the highest levels of the organisation.

Top-level commitment should not be relied upon frequently to intervene, but when resistance and disagreement can’t be resolved within the organisation, this escalation option needs to be available to restore focus and align agendas.

If top-level commitment isn’t there, this can be a difficult issue to address from within the organisation. Either the leaders at the top have digital vision or they aren’t there yet. Continuing exposure and education is the best play.

Innovation culture

Large organisations are like organic systems that respond to stimulus in ways that to an outsider can be difficult to comprehend, yet to an insider seem all too predictable.

For example, many large organisations will respond to commands from the top by saying ‘yes, yes, yes’, but over time it’s discovered that no meaningful action was taken. The message got lost somewhere along the lines of command, diluted or avoided due to risk aversion, subtly resisted due to loss-aversion or edged-out by other priorities.

This organisational inertia can kill change initiatives and suppress innovation.

This natural inertia needs to be actively compensated for by strong and clear organisational values that champion:

  • Innovation, curiosity, and/or experimentation
  • Customer-centricity
  • Courage and realistic risk management
  • Delegation of decisions and empowering others
  • Diversity and inclusion

To be effective, these values need to be more than just words in a strategic document. They must be actively and continually championed by the leadership team. And most importantly, they must be understood and translated into relevant behaviours for every member of staff (best if this step is done by the staff themselves).

Digital strategy

Every organisation has a business strategy right? Most have a technology strategy, and many now even have digital strategies.

However you architect the strategy document or documents for your organisation, the challenge organisations face is getting the different aspects of strategy to align and getting them to adequately anticipate the future needs of customers and the business.

Many technology strategies and roadmaps will map out a 5 year plan to addres today’s bushfires without preempting the challenges likely to impact the business in the future. Or without appropriately anticipating the capacity needed by the organisation.

Ultimately, we’re squarely in the digital age, digital is our BAU and change is constant. We need a new type of business strategy which:

  • is underpinned by technology rather than focussing on it
  • makes evidence-based predictions about the future and
  • explicitly allows for flexibility, review and change.

Strategic foresight

Step 1 is to leverage techniques from the field of strategic foresight to make reliable predictions about the future and actively choose the version of the future the organisation will work towards making a reality.

Digital leadership

There is a digital skills gap that means good digital staff are getting more and more difficult to find and even harder to retain.

Digital capability can be outsourced and off-shored to help fill in the gaps, but even more challenging is finding strong leaders in this space, with not only digital skills, but people and change management skills.

You need strong tech leaders in-house, who can connect the technology with the business and with the people.

Therefore, the critical first step in your organisation’s Digital Playbook: Building tomorrow’s digital leaders today. There’s no time to lose.

Once in place, strong tech leaders can lead the implementation and enhancement of all the other layers of the playbook.

Technical leaders are generally good thinkers and great problem-solvers (strong IQ), but tend to struggle with the soft skills. We’re talking about emotional intelligence (EQ).

Typically, EQ isn’t taught in most formal education. Luckily EQ and influence can be taught and we can show rapid gains even as adults. Even as tech professionals!

Ultimately you need strong technical leaders who can communicate clearly, influence and collaborate with stakeholders to deliver successful technology transformations and bring the organisation on the journey.

Digital capability

Technical skills are getting harder to source. Digital underpins every organisation, there just aren’t enough skilled workers to go around.

“People join a good organisation. People leave a bad boss”

On top of this, many organisations aren’t retaining their top performers or getting the most out of them. This again comes back to being an issue of leadership.

Tactics in this space are:

  • Recruiting the best digital talent available locally
  • Off-shoring (distributed team members)
  • Outsourcing digital capability

Ultimately, a hybrid-approach will work best for most organisations. Outsourcing is useful for distinct components of the architecture. Then use some in-house and some remote staff for projects and operations. It’s always good to have some skills in-house, but remote staff can be a good solution to skills gaps in your base cities or countries. But don’t isolate them, blend the teams. Each team should be a mix of some local and some remote staff. This increases the flow of communication, inclusion and diversity of the conversations.

Before on-boarding staff, you need to consider how they will be managed. Gone are the days that a traditional ITIL-based or Prince2 governance and management model will work across all aspect of the business. This ‘mode 1’ approach is still required for large mission-critical systems but will suppress innovation and change, especially in its early stages of development.

Look to a ‘trimodal’ structure and integrate lean and agile methods into mode 2 and mode 3 teams.

Technology platforms

Technology options and products have come a long way in the past decade. Many are now OTS Cloud solutions that customers can opt-into at a moment’s notice to meet most imaginable needs.

Customer and stakeholder expectations have exploded over as a result.

This has caused a major problem for IT departments within large organisations as most of this cloud solutions are not built to meet enterprise requirements in terms of:

  • Scale
  • Compliance
  • Integration (interoperability)

And the ones that are represent major investment of money as well as time to implement.

Two approaches are providing the best resolution to these growing pains.

  1. Allow the less-robust and isolated solutions for proof-of-concept implementations or solutions that don’t need integration to return benefits.
  2. Invest in ‘platforms’ where enterprise solutions are needed.

These platforms become building-blocks and capability that departments can tap into, combine with other building blocks and their own workflows and interfaces to meet their specific requirements while keeping the majority of the underlying infrastructure consistent and stable.

This approach provides benefits in:

  • Reduced cost, complexity and risk
  • Increased compliance, scalability and interoperability

Conclusion

The 6 layer model allows organisations to evolve the way they operate, activating enough points of leverage to trigger systemic change and embed innovation as part of BAU.

The first step is to enrich the digital leadership in your organisation:

Next steps: Book your strategy session

Book a strategy session to explore the readiness of your organisation for change and a personalised plan as to where to start.

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