The common ‘DNA’ found in industry leading businesses
In a recent article for D/SRUPTION entitled “four strategic themes for leading digital disruption”, I wrote about some of the new capabilities that organisations need to acquire and develop mastery around as they pursue their digital transformation initiatives.
These new capabilities are based upon findings in studying world-class organisations in my recent book, Mastering Digital Business. During my research, I found that many of these organisations shared a common ‘DNA’ with regard to how they achieved industry-leading business and financial performance.
Their DNA commonly included three or more of the following capabilities:
- Disruptive Technologies and the notion of moving from discrete technologies to the power of technology combinations to carve out innovative value propositions
- Platform Business Models and the notion of moving from linear value chains to multi-dimensional value networks to enable permissionless innovation
- Digital Services Mastery and the notion of moving from discrete techniques to digital assembly lines to accelerate digital service development and deployment
- Leading Practices in Corporate Innovation and the notion of moving from idea-centricity to exploring. ‘where to play’ and, ‘how to scale’ to maximize results
These organisations tapped into the power of technology combinations, the business model benefits of digital platforms, the agility of digital assembly lines, and the speed and scale of execution that can be achieved through leading practices in innovation.
How can other organisations learn from this and put this knowledge to work?
With most organisations now several years into their digital transformation journeys, many are looking to measure progress, gauge maturity, and benchmark against peers in their industry. The key questions are how to assess this maturity, what are the key pillars and elements of maturity, and which capabilities are new and different compared to business as usual.
Since digital transformation is a broad subject that requires competency across strategy and vision, people and culture, process and governance, and technology and capabilities, any maturity model needs to include the perennial capabilities and skills that are required for business success (e.g. investment, leadership, culture, change management and governance), as well as these new capabilities that we’ve been discussing.
Key pillars of digital transformation
By combining these elements, we can develop a new model for digital transformation maturity that incorporates both the perennial capabilities as well as the new ones. We’ll now take a quick look at these various pillars, their key elements, and the rationale for why each of these elements is important.
Key Pillars of Digital Transformation (Source: “Mastering Digital Business“, BCS, 2017)
Strategy & vision – Some of the key elements of this pillar include digital transformation strategy, digital transformation focus and investments. It takes strategy to set the agenda in terms of transformation objectives, focus to maintain the customer-centric (outside-in) perspective and align the organisation, and investment to drive transformational change.
People & culture – Some of the key elements of this pillar include leadership, culture and digital skills. It takes leadership to make digital transformation a necessity, to enforce behaviours, and to keep programmes chartered and aligned with the external perspective front of mind. It necessitates an innovative and collaborative culture to enable tolerance and receptivity to risk, to embrace and empower change, and to encourage innovation and experimentation. Finally, it takes strong digital skills embedded in all strategic areas across the organisation to do the heavy lifting with a completely new set of tools and techniques.
Process & governance – Some of the key elements of this pillar include innovation management, change management and governance. Leading practices in corporate innovation are important to identify and accelerate digital transformation initiatives from idea to execution and to provide a mechanism for continuous and collaborative innovation across internal and external constituencies. Because digital transformation initiatives typically have a broader and deeper change impact than traditional ones, change management programmes need to take a more holistic view across a wider range of stakeholders with a richer, ongoing engagement model. Effective digital governance is important to promote the right levels of coordination and sharing to minimize risk and cost and to ensure close and continual alignment with strategic priorities.
Technology & capabilities – Some of the key elements of this pillar include disruptive technologies, platform business models, and digital services mastery. When building the next wave of digital applications, disruptive technologies can be applied in powerful combinations to create unique new value propositions for customers. Platform business models can be used to convert traditional, linear value chains into multi-dimensional value networks. This converts the pipeline business model, where value creation is one-way and subject to bottlenecks throughout the supply chain, into a platform business model where value creation is two-way and continuous. Digital services mastery is another key element because it’s no longer sufficient to have an innovative set of products or services, you have to be a master of how you design, develop, deploy, manage and continually evolve your digital services as well.
Putting it all together
Digital transformation is clearly a journey, not a destination, so even once you reach maturity across all dimensions, there will be a need for continuous innovation and rapid response to change, and to challenges and opportunities as they arise. One of the benefits of moving along the maturity curve is that you can essentially incorporate next-generation skills and capabilities so that agility becomes an intrinsic part of the organisation’s operating model.
If you’re curious about your own organisation’s digital transformation maturity, UNISYS are currently conducting an online survey called, “mastering your digital transformation” in conjunction with the British Computer Society (BCS) that you can take to assess your maturity level. All responses are confidential and no individual responses with be revealed. In addition, all participants who opt-in will be provided with top-line survey results to benchmark against.