Three Cs to accelerate the flywheel of Digital Transformation (Part 2 of 3)

We all know that Culture and Execution eats Strategy for breakfast. This learning becomes even more important when applied to the execution of ‘Digital Strategy’. In my previous post I shared a model of creating the Digital Strategy as a platform ecosystem. While that helps us define the what, the more critical element is the ‘How’.

Sharing below my learnings on the ‘How’ of digital strategy execution. I have summarized it into three pillars – Congruence, Capability and Culture. When executed well these elements fuel each and create resonance like a flywheel.

1.??????Create Congruence - Org Structure, Incentives and Resource allocation

The starting point is to ensure that the digital strategy is integrated into the overall business strategy. There is congruence in all parts of the organization around the goals and the role each part has to play. Three aspects of managing this change and creating congruence across the organization –

• Organizational Belief – The critical success factor is to create a common belief system in the organization. This has to be a combination of top-down sponsorship to the ‘Art of Possible’. Senior most leadership belief is the most important ingredient for this engine to start. Same has to be juxtaposed with bottom-up advocacy with success stories that show 10x impact.
• Resource Allocation – One would need commitment on resources – financial, timeshare and mindshare from different parts of the organization. Not assigning resources can lead to a "Say-Do Gap," where the organization's actions do not align with its commitments. When digital initiatives become a side hustle due to lack of resources, they gradually lose momentum and become ineffective.
• Structure and Incentives – Existing structures and incentive mechanisms may need to be relooked to create an aligned network of transformers across the organization. A typical tool for structure is creating Agile Cross Functional Squads dedicated to common outcomes. For incentives once could use tools like scorecard, gamification, talent recognition and learning opportunities.

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2.??????Build Capability –

Building capability is key to successful execution of the strategy. Right capabilities will also ensure that you are creating early success, further fuelling the organizational belief on the transformation.

One could think of capabilities in the following three pillars –

Digital Talent –

• Acquire and Build Talent - The starting point is to bring together talented teams in Agile product squads. These cross functional squads have to be the right combination of Design Thinking, User Experience, Digital Tech, Data tech, Data Science and Business Translators. It could take years to hire and build the right talent. Experience in the agile squads should also become a bridge for cross functional movement of talent in the organization.
• Forge Partnerships – One cannot fathom running on their own in this world. Hence very important to create a very good network of partners. These partners should be from all parts of ecosystem -?Startups, Academia, System Integrators and the Digital giants. They all have different roles to play as part of the idea to execution playbook.

Digital Infrastructure -?

• Data Infrastructure - The ability to analyze large volumes of data and extract meaningful insights is the most critical enabler for making informed business decisions in a digital world. Algorithms are becoming more and more commoditized, but their performance depends on the quality of data one can serve to them. A good data governance program that can help Collect, Connect and Service data is very important for the Data Science engines to work effectively. ?Many large transformation programs come to a grinding halt after they realize the health of data and the effort involved to fix the same.
• Technology Architecture – Technology architecture when thought through well ahead of time can lead to distinctive advantage against those who put this as an after-thought. We all know the story of how the early investment in technology architecture by PhonePe gave it competitive advantage. The other well-known story is the API (Application Programming Interface) mandate Jeff Bezos ?gave to his team around 2002 and how that changed the future of Amazon. It is important to think of this holistically including all aspects like – Master Data that will form the glue, API economy that will fuel the ecosystem and Cloud Continuum that would provide flexibility and speed.

Security and Privacy – It is important to make Security and Privacy as part of the design from inception to ensure we have a ticket to the game. We see enough examples around us on how ignoring Security and Privacy is equivalent to multiplying your efforts by zero.

3.??????Nurture with the right Culture, Ways of Working and Governance –

One important aspect to nurture and sustain the transformation is the culture we are building around this.?Culture is the collective set of behaviours that determines how an organization operates. What we demonstrate in our ways of working sets the tone for the behaviours to expect. Right governance helps to reinforce the same. To reiterate, it is not just about calling out these behaviours and practising them everyday but also about reinforcing the same with every opportunity.

Agile methodologies continue to provide the right framework for creating and reinforcing the right culture. Agile methodologies emphasize flexibility, collaboration, and iterative development, making it easier for organizations to pivot quickly and adjust their strategies based on market feedback.

One important aspect of the culture change is true adoption of ‘Digital Operating System’ in the Ways of Working. Simple manifestation of the same could be seen in using single version of digital truth ( digital dashboards ) for all reviews and decisions and the best way to achieve the same is to remove the alternative, i.e. leaders refuse to review speadsheets and presentations. We saw a good example of this by creating online boards for Lean Daily Management in one of our manufacturing plants which also got a World Economic Forum Certification for Digital Lighthouse.

The choice of?right Governance plays a very important role in nurturing digital initiatives. Applying existing methods of decisions, tool gates and review metrics to all types of digital programs is a recipe for failure. The governance on productivity platforms has to be very different from new business model platforms. Many digital programs have a iceberg like long tail of benefits, lot of which will not be visible on Day 1. There has to be constant appetite for resource allocation changes, ability to experiment more, learn from failures and scale with speed when you start sensing success.