Six keys to scaling digital

You are an executive or investor who understands digital and why it is vital to the future of your organization. You have succeeded, after considerable effort, in delivering your first digital investments and proving their value. Now you face a new challenge: scaling for competitive advantage, operational efficiency and customer experience. This is a distinct phase with its own dynamics.

I have laid out six pragmatic keys, drawn from first-hand experience, to help you take digital wide and deep.

 #1 – Get leadership to lead

Any transformation, including digital, requires full and committed leadership from the top. But digital also needs the support of a broad alliance of senior stakeholders, because it will touch almost every aspect of your business. Destabilization will inevitably follow, bringing with it a variety of reactions, including defensiveness and political dysfunction. Senior sponsorship needs to overcome this resistance. It is not possible to work around an unsupportive CEO but the CEO doesn’t need to be the expert.

Along with CEO support, the board also needs to buy in. A digitally savvy board member can help galvanize the whole senior team.

Do not embark on major digital investment unless you are confident that you have secured senior leadership’s full backing. Your efforts will ultimately unravel if you do.

#2 – Develop a digital business strategy, technical architecture, plan and budget

Leaders usually make sure they have the basic building blocks of a change initiative in place before embarking on any investment—except, too often, digital investments. Something about the culture of digital often makes leaders forget the fundamentals. If you have not carefully considered the business and technical aspects of what you are doing up front, then you are almost certain to sub-optimize or even fail.

Digital, with its low barriers to execution, is actually riskier than most traditional investments. This is because multiple groups in an organization can initiate digital activity and move rapidly before finding that their ventures are incompatible with one another or don’t generate any business value. So before embarking on an investment program, ensure you vet each proposed project rigorously against an overall set of business and technical objectives and principles, just like you do for everything else.

#3 – See digital as a human and cultural shift

The human element has repeatedly proved the highest hurdle for digital transformations to clear. New capabilities in an old culture will actually take you backwards rather than forwards because digital assets simply cannot be created and managed in traditional ways. Make sure you know how you are going to embed empowerment, dynamic decision-making, “one company” thinking and adaptive behaviors throughout the organization. What do leaders need to model? How do structures and incentives need to change?

Your HR organization is critical to the transformation, but it likely won’t have all the experience required. That’s why you need to start looking early for good change management practitioners—who are incredibly difficult to find. And be sure to pick people you like as well as respect, because they will need to connect widely in your organization.

If, at the end of one year, your organization doesn’t “feel” different—positively different—then something is wrong.

#4 – Join up digital and legacy

There is often a period of up to two years when companies can build out digital front ends independent of legacy platforms (and the CIO). At some point, though, the front end needs to interact meaningfully with the back end to deliver a true end-to-end customer experience. It is rarely necessary to replace your legacy systems, at least in the medium term, but those systems do need to connect to your digital platforms and share data with them.

The work of linking legacy is unglamorous but critical, as much a part of digital transformation as all the cutting-edge tasks. Amid the embracing of new things, make sure the people doing this job are not made to feel second-class or obsolete.

#5 – Stay away from ideology and ocean boils

Too many decisions in digital are made based on ideology, a fundamentalist approach that expresses itself in absolutes such as “all” and “must”, (as in, “All our products must be fully digitized”). When this mindset prevails, leaders risk approving investments justified by dogma rather than returns.

Keep this in mind when advisors and vendors advocate target states that look too neat and tidy on paper. The real world is messy, and it calls for pragmatism and rigorous prioritization. Consider opportunity cost on an equal footing with financial cost. Organizations, even those with substantial resources, can do only so many things at once. Make sure you focus on the most valuable portfolio of projects that you genuinely have the capacity to deliver.

#6 – Build the right ecosystem

Partnering is the only delivery approach that seems to be working in digital. It is usually not realistic to build all the capabilities you need in-house, and it is risky to outsource everything from strategy to support to a single partner. Instead, place a key orchestration capability at the center of your initiative. Surround it with a mix of technology vendors, agile developers, front-end designers, cloud platform engineers and support services. A well-curated ecosystem will not only provide capability and capacity but also an infusion of digital culture.

Even with all these keys in place, a digital transformation at scale will face unexpected complexities and experience some failures, many course corrections and several difficult dilemmas. Don’t be deterred. The prize at the end of the journey is nothing less than a renewed organization with dynamic capabilities that enable it to compete and win. Even with all the challenges, in today’s rapidly-changing business environment, a substantive digital transformation journey might well be more of a necessity than a choice.

What do you believe is the key to scaling digital for competitive advantage, operational efficiency and customer experience? Let’s open the discussion—leave your comments below, and share with your colleagues.