Excellent question! In a nutshell, a digital transformation strategy is a plan of action
Can any leader declare that they have truly become a digital leader and that their organisation has been fully transformed in the new digital world? The first problem in making such a declaration is that there is no agreement on what being a digital leader means. Even the language around digital transformation is only properly developing now.
Most digital transformation strategies are neither strategic nor transformational. Michael Porter, the famous Harvard Strategy Professor said "If we're satisfied with vague strengths and weakness lists, we're not thinking very clearly about strategy". "There's a distinction between operational effectiveness and strategic positioning". "Should we be on the cloud or have our own servers? That's an operational effectiveness question. What we understand is that operational effectiveness is not strategy".
Digital transformation starts with a change in mindset. How much time and resource should an organisation commit to making that mind shift? It’s said that “strategy is where we create our competitive advantage”. How much money, how much time and how many people are dedicated to finding new competitive advantage?
The Emperor’s New Clothes is a short tale written by Danish author Hans Christian Anderson about 2 weavers who promise an Emperor a new suit that they say is invisible to those who are unfit for position, stupid or incompetent. When the emperor parades before his subjects in his new clothes, no one dares to say that they don’t see any suit of clothes on him for fear that they will be seen as “unfit for their positions, stupid or incompetent.” Finally a child cries out “but he isn’t wearing anything at all.”
The first challenges are cutting through the noise and getting to the heart of the matter. The IT sector pretend transformation is all to do with technology (usually the box of tricks they’re selling). They frequently publish blogs and articles to convince you to “transform your business by moving to the cloud”. Most mainstream IT advice will at best create operational efficiencies but not transform the organisation.
According to Stephen Covey, the author of best selling business/self-help book - The 7 Habits of Highly Effective People, if we’re to live a fulfilled life we must ‘sharpen the saw’. His 7th habit focuses on our ability to renew ourselves through exercise and spirituality as well as education. But just how good are we at adapting to change, modifying our habits, or expanding our minds, especially as we get older? The answer is that we’re pretty good at it if we choose to be.
“If we understand what the technology is capable of, we will be in a better place to tell you how our organisation can leverage it” - says one business leader. “This is what we want the business to achieve and how we’re going to get there. Go find technology that helps make this happen” - says another.
Digital innovators have a culture of sustaining innovation. They consider innovation so important and such a fundamental part of the business that they process, resource, reward, manage, lead, measure and communicate it. In other words, they weave it through the very fabric of their organisation’s culture. These digital innovators bridge the gap between theory and action.
Creating Digital Transformation involves these 5 organisational building blocks: Digital business strategy & culture Staff and customer engagement Processes and innovation Technology Data and Analytics. Neglecting any one of these has certain consequences. If we detect any of these symptoms in our organisations we can diagnose which areas of the business still need some attention.