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Do You Know Why Your Organization is Transforming Digitally?
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By Yara-Yasemin Schuetz
One in five CEOs use the word “digital” when stating their top business priorities.¹
First let me start with a question: Do you know why your organization is transforming digitally? You’ll probably muse, “because we need to,” or “because everyone is doing so.” Or possibly suppose, “because of our customers” or a similar generic response. You may feel entirely tripped up by this seemingly easy question.
I’d like to invite you to sit back and consider doing the exact opposite of the world’s current mantra, “faster, faster, faster” for the next few minutes to gain more consciousness and clarity in leading, or contributing, to your organization’s digital transformation (DX).
Some of you may have heard reference to Simon Sinek’s famous quote, “People don’t buy what you do, they buy why you do it” at least once in your professional life, maybe as part of a leadership program, in a new marketing campaign, or watching Shark Tank. Sinek introduced his “Golden Circle” concept in a TED talk in 2009² — and it has had more than 55 million views. The Golden Circle can be viewed as a simple, yet effective tool that can be applied in any context for a compelling structure and communication to trigger commitment and inspire action. First ask WHY you are doing something, then ask HOW you are doing it, and lastly get to the WHAT of the issue.
I have adopted this inside-out thinking myself, and use it regularly. To give you a recent example, just a few weeks ago, I defined different work streams during a project planning exercise, applying the WHY-HOW-WHAT thinking, thus ensuring early engagement from all stakeholders from the beginning. The “Golden Circle” concept can also be applied to any transformation workshop and has worked well in various customer engagements. The fact is, it will almost certainly help with navigating and executing your DX more successfully.
When developing a study unveiling five strategic patterns for successful digital transformation, I focused on the overall HOW these companies pursue their digital transformation, naturally involving their WHY and WHAT in the conversations and analysis. For the study I interviewed DX stakeholders, responsible for and involved in building comprehensive in-depth case studies from seven traditional, non-digitally native companies. Let me share my conclusions with you.
Is it sufficient to say, because you’re making (or saving) money? – The WHY to your DX
Many companies jump right into the WHAT phase, initiating various digital initiatives like chatbots, cloud first, or digital twins. When asking WHY they are developing digital twins or fostering a DevOps culture, the main answer will probably be to reduce costs or save time. Without a doubt, no company is transforming digitally just for the sake of it. Cost and time are valid reasons to do so, but is a reason centered around financial drivers provide inspirational value creation?
Does it trigger commitment and action from your teams? Speaking to those responsible for DX in traditional businesses, the common ground around the “WHY” crystallizes around an end-to-end focus on their customers, and, increasingly, a shift to business-to-business-to-customer (B2B2C) thinking. They emphasize the purpose of adding value to their external and internal customers responding and anticipating the continuously increasing digitalization in society and businesses.
From business-IT alignment to business defined by IT – The HOW to your DX
Part of how HPE Digital Advisors engage with executive DX stakeholders requires a good deal of research on the specifics of the organization’s publicly available strategy. While industry segmentation has its place, a one-size-fits-all approach to DX does not work. The pervasive impacts of digital innovation and disruption require a strategic response: a DX strategy. Some customers have a distinct digital strategy with initiatives on a corporate level, while others embed DX directly in their corporate strategy as one of multiple strategic initiatives. Transversely, many have multiple digital strategies in their individual business units; for example sales has their own, and R&D likewise. A few traditional enterprises are navigating their transformation even without any digital strategy, initiating individual lighthouse projects, proof of concepts, or digital innovation projects either out of the lines of business or the IT department.
However, this is precisely the issue: in discussing the complex journey of digital transformation with our customers, we’re recognizing that the organization’s mindset must evolve from conventional business-IT alignment toward a business defined by traditional IT. Most IT strategies are too narrowly focused on single digital technologies instead of true digital strategies orientated at business outcomes, technology capabilities, and the people who form the backbone of the organization.
Today, lines of business progressively acknowledge IT’s evolving role from a pure function to a business enabler, to a digital partner in their transformation. Indeed, in the digital age, there is no distinction between other business or IT strategies – digital is omnipresent to sustain business.
Successful companies are stimulating symbiotic relationships, balancing autonomy and alignment to allow for certain freedom in choice and creativity in approaches, while not losing sight of the overarching digital aspirations. They design a shared responsibility within the organization, with the CDO and business in the driving seat and the CIO and IT teams as co-drivers and partners. In midst of the Covid pandemic, many have opportunistically seized the momentum for a CIO or head of IT to intensify the relationship with CDOs, and lines of business, by being the organization’s “motor for DX” as one head of IT described in my study. In a former article, I refer to the “digital honeymoon.”
Score a digital home run with the right initiatives – The WHAT to your DX
“Social, Mobile, Analytics, Cloud, Internet of Things…” These current articulations of digital initiatives predominantly consist of SMACIT technologies – the acronym for existing and emerging digital technologies. Often, they are put in the context of specific use cases, for specific business areas, or personas. For example, “Use VR/AR to onboard and train employees” or, “Develop mobile app to engage digitally with customers.” Nonetheless, some initiatives are coined from a conceptual, an organizational, or a cultural dimension. For example, developing a corporate-wide data structure concept, modernizing sales and marketing, or increasing the organizational sensitization for security topics are all real examples from conversations with customers. DX describes an organization’s journey focusing wholeheartedly on creating value across all levels of business, operations, and infrastructure-driven digital technologies. Nevertheless, it becomes essential again to remind oneself that DX is as much of a technology-enabled topic as it is a human-driven one, transforming digitally stands and falls with the people at its core—and a digital operating model.
Although the emergence and versatile application of digital technologies present endless game-changing opportunities, three common patterns in digital initiatives have emerged. First, data-based or data-driven initiatives present central elements in every digital strategy, forming both a prerequisite as well as an aspired outcome for enterprises. Gartner’s recent survey¹ reflects this finding with 72% of data and analytics leaders leading or being heavily involved in DX initiatives. Second, five out of the seven companies interviewed strive for more service-orientation and as-a-service models, i.e., self-service options for their stakeholders and subscription models for their products, services, and even capabilities such as data analytics. Third, successful DX always means advancing two focus areas: externally focused digital offerings and a digital customer journey, and an evolving operating model with digital value chains and a digital culture that is internally directed.
Applying the “Golden Circle” concept to your organization’s digital transformation might inspire you to communicate your digital ambition more successfully, trigger commitment and actions across your organization, and better overcome common barriers in your organization’s transformation. Start with your organization’s WHY to DX, create shared responsibility between CDO and CIO, foster a symbiotic relationship between business and IT, and converge both teams’ aspirations and capabilities in an effective digital strategy—all before deciding what initiatives your organization strives to realize. Almost every company knows what they do, and to a great extent knows how they do it. Few companies know WHY they do it – be different.
Yara-Yasemin Schuetz is a Digital Advisor at HPE. She supports organizations in their digital transformation journey, from strategizing to realizing the full value of leveraging digital technologies, in order to advance the way people live and work. Fluent in four languages, she uses those linguistic skills to good use to create a shared language between business outcomes and IT requirements. Her consulting approach to empowering organizations to unlock their full digital ambition embodies having participants step out of their comfort zone for greater collaboration. She holds an MSc in Digital Business Management from the University of Reutlingen, recently led an empirical study on digital strategy patterns.