Tsunami Digital Tsunami is taking our corporate world by storm. Many fear because they are unprepared, some claim they are getting ready, and a few such as Amazon are smiling as they ride the Digital wave through their uncanny mastery. What is really happening here? It is a highly feared, yet most manageable challenge that every organization is now faced with. As days go by, stories emerging where many traditional business models are getting disrupted by the Digital Tsunami, forcing them to reassess their overall strategy.
The victims not only lose money and market share to their competitors but also become irrelevant to their customers. They die by thousand cuts; may become much smaller or disappear soon such as Sears, or forced to inject Digital competency through transplants as Walmart is experimenting with Jet.com.
Corporate boards are scrambling to have adequate Digital representation on their boards to navigate the Digital Tsunami. No industry is impervious to Digital disruption. There is a lot of souls searching within many incumbents and they wonder how they got blindsided or become less sensitive to the disruptive Digital trends. Are they really late to the party and if so, what should they do now? Do not panic – you need to be concerned but have to step on the gas pedal immediately and carefully navigate the Digital priorities in a coordinated manner.
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How do I approach Digital Journey?
The Digital journey starts with a self-assessment of where you are in the Digital spectrum relative to your competition or would be competition, including start-ups, and establish a Digital vision for the organization. This vision should not be just another corporate goal, but a determination to leapfrog on the Digital front that leads to a sustainable competitive advantage. Unlike all other efforts that your organization has executed in the past, Digital journey requires top-down commitment, visible leadership alignment, risk taking and tireless innovation-driven experiments. It is not another IT initiative.
The journey requires a clearly thought out strategy to digitally engage customers, effectively energize employees and tightly integrate business processes and systems. This implies reprogramming the organization’s DNA to digitally think and act. It requires a cultural shift towards recognizing the value of ‘Data’ at all levels of the organization. It is simply not enough to collect and share data but one should augment the data with powerful analytics – predictive and prescriptive, machine learning, etc. and other integrated capabilities such as cloud, mobile, social media, and Internet of Things (IOT).
Speed to act is the key to success. Amazon, for example, is piloting shipping products to customers even before it is ordered, which is a path-breaking approach, leveraging deep machine learning. The banking industry recognized the Digital disruption bit late and is now collaborating with Fintech startups that could inject the much needed ‘Digital Juice.’ But, in my opinion, it is simply a band-aid as Digital journey requires a total organizational realignment and reprogramming, and not a cosmetic make up in select areas.
Digital journey builds organizational capacity in the form of capabilities – such as dynamic e-commerce platform with adaptive pricing engine, integrated analytics enabled with deep machine learning, supply chain/logistics real-time monitoring and execution dashboards, etc. Often there is a symbiotic relationship between these capabilities. It is, therefore, critical to understand the relative priorities of strategic Digital capabilities and orchestrate their delivery schedules prudently. Given other necessities such as digitally-focused strategic organizational design, IT and business integration, culture management, leadership engagements, and Digital metrics, it is imperative that businesses start building adaptive roadmaps to support the Digital journeys. Without a roadmap, businesses are bound to experience chaos, jeopardizing investments.
Who should drive this?
Given the pervasive nature of Digital impact within the organization, it is very unrealistic to expect any one functional unit to lead the Digital effort. They will get mired in the internal politics and are destined to fail. However, CEOs or the COOs, who exercise enterprise-wide responsibility for the entire value chain – frontend, backend, IT, financials, human resource, etc – are the natural choice to drive such initiatives. The industry is also experimenting the idea of Chief Digital Officers and ironically they are predisposed with IT agenda given their technical background. In my opinion, these roles may prove useful in bringing focus to Digital priorities, but may seriously be ineffective over time as they typically lack authority and end-to-end business perspective. What we really need is a strong business-savvy leadership with an appreciation for the Digital value and not the other way around.
Digital transformation involves significant cultural management challenges. Particularly at the grassroots level, moving from Analog to Digital paradigm is a major mental switch for many employees. For example, abandoning a legacy standalone spreadsheet to a cloud-based integrated model is a major departure for many. It requires continuous training and reinforcement. One of the ways this can be addressed is using Digital Catalysts – i.e. digital experts, who serve as local Digital Culture enablers. Their embedment in different functional units will create a Digital culture and mindset over time to embrace a Digital thinking across the organization. These Catalysts can be certified much like Lean Six Sigma Black and Green Belts to reflect their sphere of competence and influence.
Digital Tsunami is real, yet it is not late to get on the Digital bandwagon. Before it becomes a crisis, you have to act on this right away. It is possible that you may already have some pieces of the Digital puzzle and it could be a matter of priority realignment and addressing the gaps. Remember, no one is immune. Seek help as necessary and the Digital expertise is growing across many industries. Before committing any investments, conduct due diligence, and once the Digital path is set, work feverously to achieve your goals. There is no time to waste and let us get ahead.