In the past, we’ve touched on the importance of reinventing the core and thinking about digital investment as a growth strategy, not just the cost of doing business in today’s global economy.
McKinsey published a guide to reinvention for CEOs. It outlined the areas company leaders should focus on during a digital transformation. Reinventing your business requires tough choices. Knowing how to prioritize your efforts can make all the difference. Here are seven questions to help guide your roadmap.
1. In which direction should the business go?
This can be the most daunting question to answer—and the toughest one to get consensus on. Go back to basics: look at the market and business. Focus on supply and demand. Be forward-thinking and make decisions based on how digital technology could lead to changes in the future.
Look at what digital innovators in your industry (and outside of it) are doing. Tap into your imagination and envision how your industry would work if it was completely digital. How might you serve customers in new ways? Note that almost every major (read: successful) digital transformation has involved improving the customer experience.
At Wizeline, we employ internal hackathons and specialized workshops to encourage teams to think strategically and creatively.
2. Who will lead the effort?
A successful reinvention is a team effort. The CEO should provide the vision and ongoing direction, but there should be a strong group of leaders to drive the day-to-day efforts. Selecting key players within the company is an important step. Who has the skill set and digital knowledge? Who has done it before? Who will work well together to bring the business closer to its goal?
Digital touches almost every aspect of a business. It will require a high level of coordination across the entire organization. Your A-team should include leaders from multiple functions.
3. How will you sell the vision to key stakeholders?
Create a comprehensive communication strategy—when to communicate and with whom. Focus on getting buy-in from influencers both inside and outside the company, then, circulate the change to their networks. Adopt a campaign mentality. Deliver clear messages, be consistent, and use all of the relevant channels.
4. Where will you position the company within the digital ecosystem?
Figure out which capabilities, skills, and technologies available in the ecosystem complement and support your company’s strategic ambitions.
Secure your company’s most valuable assets, such as data or customer relationships. Evaluate how to rely on these relationships and how to reorganize them. Germany’s leading bookstore, Thalia, evaluated its entire supply chain before launching a digital book offering. The CEO, Michael Busch, formed alliances with other book retailers and partnered with Deutsche Telekom to provide the technology and digital distribution. The company was careful not to alienate its customers—a core value.
5. How will the team make decisions during the transformation?
No matter how solid your transformation roadmap, always prepare for unforeseen circumstances. Develop a system of governance. How will you deal with escalations and inevitable roadblocks?
Make it a priority to meet with key stakeholders regularly to ensure initiatives are on track. Use a dashboard to track progress on key initiatives during the transformation. Wizeline development teams use agile methodologies and rely on tools like JIRA and Wizeline Roadmap to keep tabs on progress.
6. What steps will you take to ensure funds are allocated rapidly and effectively?
Determine an allocation process. Your team should act like venture capitalists; follow your digital progress closely, kill projects that lag expectations, and invest more in those that do well. To do this, you’ll need elastic budgeting processes. During a digital transformation, budgeting should shift from annual to quarterly or even monthly cycles.
Keep in mind that a successful transformation usually requires cutting the budget for legacy operations. Determine where you can reallocate and when. What operations can be executed digitally?
7. What will you execute first?
More than 70 percent of transformation programs fail. That’s the reality. Addressing these questions go a long way toward improving your odds, but losing momentum can undo even the best transformation efforts. To reduce that risk, carefully decide how to sequence the transformation for quick wins that yield revenue payoffs and reduce costs.
A digital transformation should be a team effort, one that examines the people, processes, and technologies of the business in order to yield long-term results. Wizeline often holds discovery workshops with our clients to ensure that all stakeholders are aligned on the needs of users or customers, as well as on the goals of the program. Need help tackling these seven questions? We’re here to help.