Having effective CEO level conversations requires a blend of understanding of what goes on in the mind of a CEO as well as knowing what…
HBR Analytic Survey Shows How Thought Leaders Win in the Digital EconomyLeadership Management January 23, 2019
With the advancement of technology, the world is continuously changing, including how people run businesses. Digital economy has become the new norm and it becomes increasingly important to make use the latest technology in doing what we already do – but better. Deloitte overview on Digital Economy mentioned, “Digital economy is the economic activity that results from billions of everyday online connections among people, businesses, devices, data, and processes.”
European Commission study said that digital economy is important as it is developing the world rapidly. It is also an important driver of innovation, competitiveness and growth which holds huge potential for entrepreneurs and small and medium-sized enterprises (SMEs). Unfortunately, only a few companies can adapt in this rapid digital change and many executives worry that their company is unable to follow the massive.
Recent survey by HBR sponsored by DXC Technology defines the real case about this matter and shows how digital leaders could move their organisations forward in the digital economy. First thing you should notice is how digital your organisation is. In order to survive the digital economy, your organisation should at least know how to anticipate and adapt with the change. Many of the survey respondents say their organisation must go through substantial or extensive change to become even more digital over the next five years. While they see the need for change, they acknowledge the reality of organisational inertia and resistance.
Next is that leaders should create a sense of purpose and a common understanding in order to bring back people together, because employees in this matter might be hard to adapt to what they don’t understand. Pontus Siren said in the survey, “First thing is to build a common language around what the digital strategy means for different parts of the organisation.” Thus, leaders should explain why digital is important, what different terms mean, and what the framework is to the whole organisation.
Different models for different outcomes
Different organisation will require different effort of change. Siren said, “Development deals, governance structures, and leadership roles are all quite different.” So, member of each role should be carefully selected with a mix of expertise in technology, strategy, and business development. Likewise, you should not redesign organisational structure based on preconceived notions as it does not allow for learning. Successful company is taking a test-and-learn approach to their firm structures as well as to their product design.
Customer insight and working from the outside in
More than half of survey respondents (52 percent) said their company is either somewhat or very effective at sensing and responding quickly to changes in their industry to move in a new direction. It is because of a key factor in digital economy. Meredith Whalen, senior vice president of research at IDC, mentioned that “digital companies are adapting an outside-in approach, leveraging feedback from their ecosystem of stakeholders to evolve their offerings and business models.” As a result, not only just marketing and customer groups can adapt better, but the entire organisations as well. To do the approach, firms should employ design thinking and customer journey maps and changing KPIs to include measurements that span organisation.
The impact on IT system, organisation, and partners
Legacy IT system is too rigid and slow for digital business. On the other hand, companies should modernise their IT infrastructure so they can gain flexibility, scalability, and – above all – speed. You can combine this with outside-in approach to increase cloud and API/service-based infrastructure. Jeanne W. Ross, principle research scientist at the MIT Centre for Information System Research, advised that CIOs to build not just a service platform but also a set of digital service to go along with.
Timing and payoff
HBR mentioned that IDC prediction shows there are three-quarters of organisations will have digitally transformed by 2027. However, Ross is not sure. She argued that companies are not ready to have a total digital transformation in just 10 years unless companies are doing this brilliantly. Nevertheless, digital transformation demands leadership, organisational restricting, investments, in people and IT infrastructure. Above all, it requires flexibility.
The main difference between previous and today technology is that it is quickly global and much faster moving. Winner will be early out of starting blocks but also pace themselves for long haul. One trick is to accelerate change and create a culture that can sustain that over time.
You might also like
Speaking at the Committee of Supply Debate on March 6, Minister for Communications and Information, Dr Yaacob Ibrahim, highlighted the need for Singapore to build…