Five Rules To Cultivate a Successful Digital Strategy
Most businesses are working towards digital transformation to meet changing customer preferences and mitigate the risk of being pushed out by digital disruption. According to Harvard Business Review, digital disruption risks top the list of concerns for most senior business managers around the world. Each day, new digital strategies are developed to set the path for digital transformation as businesses try to fit in the dynamic digital world. However, 70% of digital transformations do not see the light of the day, Harvard Business Review continues. Simply put, most digital strategies and transformation are bound to fail right from the onset, despite spending billions of dollars.
The 70% of failed digital transformation proves that digital transformation is not just about capital investment. Managers have to study their competitors, invest wisely, and develop informed digital strategies that create a competitive advantage to accelerate revenue and profit growth. Even as managers seek to develop successful digital transformations, they must realize that digital transformation is a continuous process and not a one-time activity.
Understanding the Relationship Between Digital Strategy and Transformation
A digital strategy is the application of digital solutions to emerging business challenges. Digital strategies are aimed at maximizing the benefits that accrue to a business when it employs digital initiatives in solving challenges. A digital strategy is an important tool for any business as it helps the business to define its digital path and outline the goals and objectives of the organization as far as digital is concerned. The digital strategy also helps to communicate the organization's digital plans to all stakeholders.
Digital transformation, on the other hand, refers to the changes brought by the implementation of a digital strategy. Digital strategy, therefore, precedes digital transformation, which means most of the rules listed below apply to developing and implementing a digital strategy to spur digital transformation. Here are five rules that will help you develop a successful digital strategy/transformation.
Assess the Impact of Digital Strategy/Transformation
Like any other strategy, a digital strategy should start with understanding the nature of the industry, competition within the industry, and how the strategy will disrupt the industry. Digital strategies have the potential of creating a digital transformation that completely alters your business's approach to operations, relationships with customers, suppliers, and even the organizational culture.
You should, therefore, examine the effect of transformation on your business and what competitors are likely to do to counter your move. It is also good to know that a digital transformation also has the potential of empowering competitors. Empowering your competitors means the digital strategy you are developing may end up working against you.
The rule of thumb here is to take a 360-degree examination of the strategy before rolling it out. Assess the growth possibilities and the risk of implementing the strategy. If the strategy does not give you a competitive advantage over your competitors, it is not worth your investment.
You, therefore, need to estimate the return on investment to assess the viability of the digital strategy. As mentioned earlier, transformation is a continuous process, and you should determine what the future holds for you if you adopt or decline the strategy. Is the transformation likely to be rendered obsolete in the near future? Do you risk being pushed out of business if you do not transform?
Become a Go-getter
To succeed in digital transformation, you need to set your ambitions higher than the average. Be over-ambitious. In digital transformation, less aggressive innovators risk being overshadowed by more aggressive first adopters.
Take IBM, for instance. IBM was the first tech company to develop a smartphone. As early as 1994, IBM had already launched the Simon Personal Communicator, a cell phone that could send and receive faxes, emails, and pages. The IBM cellular phone had a 4.5-inch LCD touch-screen display, a camera, stylus, calculator, clock, and other applications like today’s smartphone.
However, IBM was a less aggressive innovator. The company's ambitions of developing a smartphone were not high enough to sustain the digital transformation. IBM's smartphone did not take off despite the overwhelming reception by customers. Years later, a more aggressive first adopter, Steve Jobs, took the idea and developed a sustainable digital transformation that has now defined digital smartphone technology.
In digital, it is not about who invents the idea but rather who is ambitious enough to sustain the transformation. Steve Jobs supported the transformation to develop the iPhone. You should, therefore, not shy away from being over-ambitious in your digital strategies since most digital strategies fail because of low ambitions and inadequate enthusiasm.
Draw Requirement a Plan
When developing a digital strategy, you need to understand your requirements and their order of priority. You should know where to start and the steps you will follow once you have started. Control your requirements such that you do not seek to achieve too many goals with the strategy you develop.
If you have multiple items, narrow them down to two or three most essential things for digital growth. If you want to improve customer service by introducing a mobile app, concentrate on the ease of use and efficiency of the existing digital platform before going to the AI-driven pricing and promotion tools.
Concentrate on short-term wins like increased demand due to the improved efficiency of the digital strategy. The increase in demand will help you generate more revenue, which helps free up capital for the other stages of the digital strategy. After improving customer service on the mobile app, you can now move to the second item. The second item could be digital marketing strategies that seek to expand your market further and free up more capital for the third item in your plan.
Cultivate New Strengths, but Retain a Part of the Old You
Digital transformation entails a shift in most areas of the business, including the organizational culture. However, avoid discarding all your incumbency skills and talents when shifting to a new mode of operation and customer service. You are not a new entrant. You had already covered some ground before transforming into the new digital.
While the new digital technology is meant to transform the business, a complete shift would take away your incumbency advantage. The unique digital strengths should complement the existing company strengths, ensuring the old and the new work together to achieve the new objectives.
Monitor the Transformation Actively
The digital world is constantly changing, which explains why digital transformation is a never-ending process. You, therefore, need to monitor how digital technology is evolving in your industry and continuously update your digital transformation.
However, while attention and active monitoring are required, you also need to bring others on board. Remember, digital transformation affects almost every aspect of the business; leaving out key stakeholders may affect the implementation stages. Therefore, active management of digital transformation includes training other team members in the new digital culture.