A nice article from Forbes covering off the barriers to digital transformation and providing a methodology to address.
Most non-network, non-platform companies are now reacting to the digital world, but in very small steps. Many seem to believe that a firm can ‘digitally transform’ with a few well-scoped projects in their Marketing, HR, Service and IT departments, managed by CMOs, CDOs, CIOs, and so on. But, they are dead wrong.
Our research shows that what really makes a difference in a company’s performance and value is a digital business model, not just a few digital projects—and business model decisions are up to the board and CEO. Why, you ask? Because business model transformation requires significant capital reallocation—not just within business and functional units, but across them. [my emphasis]
Given the pressures and complexities of leadership, plus the fact that digital is not a strength of many executives, it’s no wonder that many leaders would prefer to pass this responsibility down the chain… but this simply sets up the CDO, CMO, or CIO for failure
The PIVOT methodology
We use a five-step process which we call PIVOT.
1. Pinpoint: Your beliefs about value and technology, and where you are on the digital journey;
2. Inventory: All your tangible and intangible assets (including all your relationships such as those with customers, employees, alumni, and partners);
3. Visualize: Your new platform and network business model and the path you must travel to put digital at the center of the firm;
4. Operate: Your existing product and service center business model while you nurture and grow your new platform and network business; and
5. Track: Your progress and performance towards your digital future by implementing new metrics for the digital age.
What most people try
Many work to enable others in their organizations, but this often results disjointed, independent, tactical initiatives, which are costly and go nowhere, creating bad blood inside and outside the organization.
Forrester’s Nigel Fenwick asserts that by 2020 all companies will be either digital predator or digital prey.
I have also heard companies characterised and digital attackers and defenders. Which would you rather be?
Source: The Top Reason Digital Transformations Fail | Forbes | Barry Libert and Megan Beck, Oct 2016
Great related article on the PIVOT methodology for digital transformation
There’s no question why legacy organizations are tackling digital transformation now. Digital native upstarts are gutting traditional industries one at a time, leveraging scalable technology and participative networks [I like this point]. But shifting a firm’s asset portfolio is a lengthy process and is fraught with uncertainty for leaders comfortable with older asset types.
Inventory your assets lots of opportunities especially in the intangible area
In my experience intangible assets are a lot less well understood and tracked, but especially important for any business strategy. Great to see the PIVOT model mentioning them.
less-well-known intangible assets such as the talents and skills of your workforce, the IP that exists within your organization, and networks of people and organizations that exist outside the traditional boundaries of your firm. These assets are typically overlooked, undervalued, and under-managed. In particular, look at your networks with care to determine their size and affinity. Partnering with a valued and interested network is the best way to dive in.