manage-digital-transformation

A Digital Transformation Strategy for Organizations

How To

Digital transformation is the impact of digital on organizations.

Digitization transforms organizations on three levels:

  • External – The customer experience, or the external communications of the organization.
  • Internal –The business operations, or the internal communications and decision making of the organization.
  • Holistic– The entire organization; therefore the transformation strategy must be holistic and inclusive of all business segments and functions.

In recognizing the disruption – i.e. the challenges and opportunities – of the digital marketplace, the C-suite needs to prepare their executive team, and ultimately all staff, for the step–by-step transformation of the organization. Managing digital transformation includes a total reexamination of the organization’s business model, from how it is designed to how it operates and implements.

As global search and advisory firm Forrester reports in its Six Steps to Become a Digital Business, “You must think of your company as part of a dynamic ecosystem of value that connects digital resources inside and outside the company as needed to compete. You must harness digital technologies, both to deliver a superior customer experience and to drive the agility and operational efficiency you need to stay competitive.

The first step is to set priorities.

Strategic priorities for digital transformation:

  1. Determine areas of vulnerability, high risk, and digital literacy.
  2. Gain C-suite agreement on values and definition of social return-on-investment (SROI).
  3. Adopt a digital mindset.
  4. Design a digital vision and strategy.
  5. Increase level of digital preparedness in all functional areas.
  6. Rethink business model and customer experience.
  7. Integrate values into strategy across the silos.
  8. Acquire digital integrators.
  9. Launch digital skunkworks project.
  10. Realign organizational structure (integrating values and business goals with digital strategies {internal and external} to improve the customer experience, increase communication flow, and operational efficiency).
  11. Develop a sustainable and competitive organization.

Now that the C-suite has determined its priorities, it needs to develop a strategy that has agreement from their executive team and buy-in across the organization. Digital transformation is not a linear progression; the leadership team must respond to the challenges of the competitive environment and the needs of the organization by implementing best practices.

Digital transformation action strategies:

  1. Digital audit assessment
  2. Executive buy-in/agreement
    • values clarification
    • goal prioritization
    • vision
    • areas of highest payoff
  3. Digital mindset and culture – company manual
  4. Digital transformation strategy with buy-in across the organization
  5. Digital leadership training
  6. Business model adjustments
    • Lean Canvas
    • Digital Involvement Cycle
  7. Internal and external communications audit
    • IDM Strategic Analysis
  8. Talent management – digital integrators
    • talent acquisition
    • outsource partners
    • internal training
    • reverse mentoring
  9. Launch digital skunkworks projects via Digital Innovation Unit
    • choose initial project
    • collaboration of cross-functional teams
    • multigenerational
    • evaluate
    • disseminate
    • Implement
    • IDM Strategic Model
    • CX
    • Digital Involvement Cycle
    • SCRM
  10. Organizational change
  11. Sustainability audit and benchmarks for the Digitally Integrated Organization

To design a digital transformation strategy, the C-suite can use the Path to Digital Integration to serve as the overarching framework:

  • Mindset
  • Model
  • Strategy
  • Implementation
  • Sustainability

Digital Transformation Strategy

Path to Digital Integration Strategic Priority Action Strategies
MINDSET Determine vulnerabilities/opportunities Digital audit
Agree on values and goals (C-suite) Values clarification/ goal prioritization
Adopt a digital mindset Digital mindset and culture –company manual
Design digital vision and strategy Digital transformation strategy – communicate the vision across organization
Prepare Digital Leaders Digital preparedness training
Digital Acceleration teams
MODEL Rethink business model and CX Lean canvas
Apply Digital Involvement Cycle
STRATEGY Integrate values into strategy across silos Internal and external communications audit
Apply IDM Strategic Analysis
IMPLEMENTATION Acquire digital integrators Talent Management

  • Talent acquisition
  • Outsource partners
  • Internal training
Launch digital skunkworks projects Digital Innovation Unit
Monitoring and Evaluation
IDM Strategic Model
CX/DIC/SCRM
Align organization Organizational structural change
Multigenerational collaboration
SUSTAINABILITY Develop sustainable and competitive organization, i.e. Digitally Integrated Organization SROI; Sustainability audit and benchmarks

 

Conclusion

The speed and scope of change in the digital marketplace is a daily reality. The leadership of multinationals, SMEs, and nonprofits must reflect on how they are going to address the challenges of digital transformation within their respective organizations. Though in outline form, the aforementioned digital transformation strategy provides a clear roadmap for leaders to evaluate priorities and translate them to action.

Questions

  1. Many experts argue that digital transformation easier to implement in smaller organizations, yet to date it seems like only larger organizations are doing so. Why? How can SMBs implement digital transformation strategies like those outlined above?
  2. Adopting a digital mindset is often cited as the most challenging aspect of the Path to Digital Integration, especially among the C-suite. How can organizations encourage digital natives to help to “reverse-mentor” executives?
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