In Part 1 of this article, we examined the importance of speed, flexibility, and successful adaptation in the current business climate. Here we continue our analysis, highlighting several key decisions – both right and wrong – that companies make as they try to keep up with a changing economy.
Digital investment and transformation require a significant internal overhaul, and success is far from guaranteed. But while a ‘wait and see’ approach may be tempting in a business world that seems to continually reinvent itself, there is an inherent flaw in this approach. While you are waiting and seeing, your competitors are actively taking every opportunity to get ahead and position themselves for success in the new era.
One common refrain from businesses is that they want to enter the digital realm but aren’t sure how to structure such a major internal change. After studying both the successes and failures of companies across several industries, certain lessons become clear. These are divided into the two sections below, which summarise the common mistakes companies often make regarding change – as well as the positive strategies they should be embracing instead.
Signs of Poor Execution (How Not to Adapt to the Digital World)
- You’re waiting too long. You may have a long history of providing splendid products and services, but if these can now be acquired faster, more easily and more cheaply through your competitors, your customers will soon fade away.
- You’re in too much of a hurry. Indecision can be damaging but making the wrong decision can set your company back a long time. It pays to plan ahead by identifying the areas where there is the most room for improvement via digitisation and focusing specifically on those.
- You’re changing too much. Some companies, in the rush to adapt, abandon the things that actually made them good in the first place. With digitisation, as with all other things, it pays to keep the right perspective, and take care to avoid overbalancing.
- You’re setting the bar too high. Your strategy should not be so complex that it takes a long time to carry out. Each element of your overall strategy needs to be concise, simple and easy to roll out. A strategy should not need another strategy. Focus on execution rather than overplanning; choose to be agile rather than rigid, so that you can adjust quickly to new developments.
Elements of Effective Strategy (How to Build and Win)
- Stick to basic business principles. As you prepare to evolve, remember that the fundamentals still apply. Your digital transformation will bring the most benefit if you look for improvement in areas related to your existing strategic priorities. Determine where your pain points are, as well as the potential threats your business faces, and focus your digital efforts on addressing them.
- Make it a team effort. By seeking input only from your upper management and IT staff, you could severely limit your digital vision. Every department should have a seat at the table when discussing a digital restructuring of your business processes. Sometimes the best ideas come from where you least expect them.
- Put the right team in place. Your current team may be very good at what they do, but digital transformation requires fresh thinking and a special skill set. You’ll certainly want to have people who have been in this situation before with other companies and can anticipate challenges before they arise. Creating new positions, such as Chief Digital Officer, can open up space for new kinds of thinking, while also sending a signal to the rest of the staff that a new era is dawning for the business as a whole.
- Change the internal culture. Inertia will settle in without a clear and sustained push toward a goal that the entire company understands and buys into. When your workforce begins to believe in the new company vision and understands that it has a voice in shaping what comes next, people will begin thinking of ways to help the transformation succeed.
- Act decisively. When the plans are settled and the decisions are made, it is time to get moving. Workers look to leadership to set the tone, and a clear change of course will be necessary to steer the ship to its new destination.
Whether your company feels that its future is in AI, blockchain or RPA, know that it is important to be first, but it’s also important to be right. If you are about to embark on a project that no other company is pursuing, it may be because you thought of a great idea before they did – or it may simply be because it isn’t a great idea at all.
As your company looks forward, remember that digitisation is a tool rather than an end in itself, and that the design of a tool depends entirely on what it will be used for. As digital transformation requires a heavy investment of time, effort and finances, it is worth seeking out independent expert advice for help along the way.
The road ahead isn’t easy, but with the right planning, investment and execution, you may end up changing the business environment in your industry – forcing your competitors to try their best to adapt to you.