Excerpted from Designing the Organization for Digital.
Digital is everywhere, it seems, threatening traditional ways of operating and presenting new business opportunities for those able to seize them. With so much at stake, companies are feeling the pressure to determine how digital fits into their business model and the right way to organize to leverage the possibilities. All too often, however, discussions about digital devolve into overly simplistic debates about whether to hire a chief digital officer, recruit a digitally savvy director or create a separate digital team. In our view, many executives are debating the wrong questions, and we see three main reasons for this:
- They disagree about what “digital” is. When people from different parts of the business talk about “digital,” they are referring to a disparate set of forces — the growth of e-commerce, the influence of social media, the promise of big data, the proliferation of mobile devices, the new reality of cyber security, the potential of cloud computing and storage — each of which has different implications for the business. Lack of a shared vocabulary among the key players in an organization is often an obstacle to finding solutions and defining a strategy: If half of the senior team thinks of digital as social media, and the other half thinks of digital as mobile or big data, it will be difficult to find agreement on priorities and plans.
- They fail to consider how digital impacts their unique business challenges. Organizations often discuss digital without identifying which specific digital technologies or platforms are affecting their businesses and industries — and how. For some, the impact of digital may be focused narrowly, for example, on digital marketing. For others, the digital forces impacting the company may represent a significant business model disruption. Meanwhile, for other businesses, digital may represent a tremendous opportunity to gain efficiencies and cost savings from the automation of formerly manual processes. Most companies will face opportunities and threats from multiple digital platforms and in a variety of ways.
- They neglect the other issues that affect digital. When implementing digital plans, companies often overlook the importance of a broad range of other issues that impact the success of digital initiatives, such as the organization’s current degree of technology sophistication, cultural dynamics, the speed and transparency of decision-making and the availability of talent.
The consequence of a simplistic approach to “solving digital” is that the organizational and talent decisions made in the absence of a clear, guiding framework will influence the direction of a digital strategy, which may not align with the real threats or opportunities facing the business.
Companies that will be successful in an increasingly digital world will invest time upfront and in a regular, frequent cycle to define what digital means for them in their market and for their assets. From this analysis, a clear digital strategy and strategic priorities can be developed, which may potentially spark the need for new advisers, partners, board members, executives and organizational approaches.
Learn more about the questions savvy organizations are asking to incorporate digital into their regular operations.