Strategic planning is difficult. Not only because of the pace of technological change today, but because it tends to drive incremental change instead of innovative change. A recent article in McKinsey Quarterly speaks to this challenge. Specifically, it focuses on the complexity of building a successful digital strategy.
Digital strategy development is a challenge for executives. As a newer strategic consideration, executives aren’t clear on how digital effects strategy. According to the article, “They underestimate the degree to which digital is disrupting the economic underpinnings of their businesses. They also overlook the speed with which digital ecosystems are blurring industry boundaries and shifting the competitive balance.”
Instead of settling for routine incremental change and the inertia associated with traditional practices, the article recommends fighting and winning on four fronts.
Digital fluency is not a strong suit for a majority of senior executives. Thus, the ability to think about how it can improve operations or create competitive advantages is a problem. This can create a variety of short sighted decisions that hurt the company’s ability to deploy new technology and keep pace with new entrants and first movers.
Two areas of improvement are raising your technology IQ and overcoming competitive blind spots. One example of raising your technology IQ is creating or participating in a digital academy. Addressing blind spots is even more difficult as it forces you to think about your business differently. Imagine you were starting from scratch today, how would you build your business and what would you do to disrupt incumbents that operate the way you do now.
Executives (and staff) who are asked to embrace and lead digital change are going to worry about the impact to them personally. From a loss of influence to the loss of a job, there is fear and anxiety that will create inertia. To be successful you have to be deliberate in creating a process that demands accountability and responsibility for leadership.
Honest open two-way communication is critical to building confidence and trust in digital transformation. Embrace a culture that encourages leadership to share their concerns and areas of anxiety. Create support groups that help define how leaders can build new skills to remain relevant in a shifting professional landscape.
Building a successful digital strategy is not a straightforward process. It’s ambiguous at best. And with the pace of change, the speed with which you adopt your digital strategy is important as well. Moving quickly and in many ways blindly does not sound like a recipe for success.
Build your proof points as you go, “anchor your strategy decisions to a thesis about the business outcomes that different digital investments will produce.” Additionally, you can tap into real-time insights from your data. Instead of guessing, you can see what’s working and what isn’t as you consider strategic decisions.
Building an effective strategy requires focus. With the pace of technological change, it’s easy to become distracted and windup pursuing multiple digital initiatives. A key to maintaining focus is to, “as a portfolio of initiatives at different stages of seeding, nurturing, growing, or pruning.” This will help you deploy resources accordingly.
With this knowledge, you can embrace the “big moves” you’ll need to make such that they are, “mutually reinforcing, so that developments in the core help to support new digital businesses and vice versa.”
The digital landscape is full of unknowns, volatility, and test and learn speed bumps. But it is also data rich with more information at your fingertips than ever before. The ability to course correct takes days instead of months. Yes, building a successful digital strategy is hard, but it is also more rewarding if you get it right. You can create new revenue streams, improve productivity, and reshape your offerings to better meet consumer demand.
To learn more about strategic digital leadership and the associated hiring needs, send us a note. Our executive recruiters at Sheer Velocity have established relationships with experienced digital leaders across multiple disciplines and industries.