Jay Walker, founder of Priceline and chairman of Walker Innovation, once said “there is no such thing as a “digital strategy.” He was speaking at the CEO2CEO Digital Transformation Summit last year when he made this claim. His justification? “Digital is a big part of what the world is—a big part and growing bigger. But there’s no separate digital strategy. How absurd. That’d be like me asking you, ‘What’s your phone strategy?’”
Jay is right. Digital needs to be an embedded element of our operating models, as inextricably interconnected as DNA. However, I strongly believe that a digital strategy is a very powerful thing, and that it is absolutely critical for beating the odds of digital transformation failure (which are mind bogglingly steep, with as many as 84 percent of companies failing at digital transformation). The data supports me here: Companies with digital transformation strategies benefit from double the revenue growth compared to those that don’t.
The fourth industry revolution is upon us. The Ubers, airbnbs, and Amazons of the world – organizations with digital strategies embedded at the very core of their operating model – are at the spearhead of this revolution. Since 2014, 149 start-ups have earned $1billion+ valuations at launch, and drawn in equity funding of more than $90 billion. These unicorns, backed by a digital core and investments on a massive scale, are positioned to thrive in the brave new data and tech-led world. The rest of us need to find ways to meet or match these digital natives in order to survive.
In response, digital transformation is everywhere. We’re all pursuing it because we know it will create new opportunities and position us to compete. And we’re doing it in an attempt to stay in front of the digital disruptors lurking behind every corner of business today.
We believe that all organizations deserve a fair shot in doing just that in this brave new world. So we’ve outlined the four critical components of a bulletproof digital strategy. These are the double helix must-haves for any organization seeking to succeed in digital transformation and embed digital in its DNA for success.
Your Technology: No matter your industry or product, IT and digital development is now your most important core competency. Building that core competency will propel and enable transformation; failing to do so will stunt it. Your CIO may be at the helm, but she can’t do it alone. Your entire board and C-suite must be engaged and invested in making IT and digital development one of your organization’s deepest skillsets. Achieving excellence in IT fosters an agile environment and a continuous flow between ideas and operations. Without that, your transformation strategy – and your profits – will fall flat.
Your Customer: Because of its very direct link to increased revenue and margins, digital customer engagement in this omnichannel, customer experience (CX)-obsessed market is likely already on your radar. But what we’re seeing is that digital customer engagement is often executed through one-off projects run through shadow IT with little accountability to the broader digital strategy. Sustainable customer strategies must be created as part of the overarching digital strategy, and with direct involvement by the CMO and CSO. This isn’t an area you commit to for the short term, and it will consume everything you throw at it. Without the architecture of the larger digital strategy to support it, you’ll never achieve true differentiation.
Your Employees: If you aren’t empowering your workforce to operate in a digital way, you are constraining innovation, automation, agility and retention. Employees must be encouraged to continually evolve how they work, enabled by the types of cutting-edge tools that inspire and increase productivity. This isn’t the responsibility of IT alone. In fact, allowing IT to work in a silo, issuing mandates from above without input from individuals in every business unit, will kill true digital workplace transformation.
Your Supply Chain and Partners: This area requires an agile strategy: It is too big to tackle through one work stream, there are numerous unforeseen roadblocks, and getting the whole ecosystem to dance to your time is nearly impossible. The reward is in achieving the type of automation that knocks zeros off costs and fundamentally improves the service you provide. An approach that allows you to pick the low-hanging fruit and quickly switch to other areas when needed works best. Get the COO and the CFO on board with the plan here, as they will be key stakeholders and, hopefully, delighted beneficiaries if their expectations are well managed.
This is the tip of the digital transformation iceberg, a peak into what is truly a revolution in-progress. Look for more in-depth dialogue from me and my team in the coming months as we roll out content that is inspirational and actionable, no matter where you are in your own digital transformation journey.