While digital strategies cannot be modified incrementally, executives cannot keep up with the pace. In this article at McKinsey, Tanguy Catlin and his co-authors discuss how some companies resolved 4 challenges around digital strategies.
Digital Strategies: 4 To-Dos
Digital strategies will work when you know the challenges. Following are the examples of companies that resolved 4 challenges around digital strategies:
Ignorance Is Not Bliss: Senior executives have scant ideas about digitization, so they invest in the wrong order or entirely skip building their foundation. So, a company created a digital academy to educate the leadership. Instead of finding out how to cut off competitors, why not create a new idea? A financial services firm started a war-gaming workshop series that featured new ideas. It divided the leadership team and made them role-play major digital natives like Amazon, Google, and startups. This allowed executives to gain new insights and create long-term digital strategies.
Fear of the New: Usually, top leadership resist supporting digital initiatives without assured value addition. The fear of resistance discourages them. A company created a program where leaders could talk about their fears. They were encouraged to think positively and inspire the workforce to follow their digital strategies. The company built a support system to share best practices and coordinate implementation. Later, executives used the same to develop skills and direct teams.
Find Tangible Results in Your Ideas: As you cannot determine how digital strategies will pan out, you should check for probable tangible results. Also, pinpointing the revenue stream and values will assure easier buy-ins. A global oil and gas company wanted to do the same. Instead of thinking theoretically, it explored the challenges and developments. Their ‘skunkworks’ initiatives prevented them from investing in the wrong areas or waste time building models. The next step is analyzing and utilizing real-time data. The company found positive results from its test cases which boosted confidence in digital strategies. They made smaller stage gates that were controlled by a new digital transformation office. The office provided funds as per project performance. The ‘fail fast’ mindset allowed everyone to learn and reduce wasted funding. Similar projects shared funds and resources to reduce costs.
Make Innovation and Capabilities Mutually Complementary: Businesses think of adapting to new technologies and supporting innovation are mutually exclusive. Why should it be? Consider your company as an innovation portfolio that undergoes seeding, nurturing, growing, and pruning stages. Then make bold moves like resource allocation, investment shift, etc.
A global IT services company investigated all the portfolios with three questions in mind. What new technologies are missing from the portfolios? What should be revamped? What should be left out? These influenced discussions regarding organizational risk capabilities. The company poured in $1.5 billion for a new initiative and launched programs to build digital capabilities like automation and support the initiative. Revenues poured in from both the digital strategies.
To view the original article, visit the following link: https://www.mckinsey.com/business-functions/digital-mckinsey/our-insights/digital-strategy-the-four-fights-you-have-to-win