Let’s be honest: Digital transformation is tough

Whenever you read an IT-focused magazine, newsletter or webinar invitation – “digital” tends to be the most reliably hyped topic. Going digital is the new priority for any organization that wants to be progressive: Mobile apps for employees and customers, online customer service or social media competence aren’t just for the GM’s and Coca-Cola’s in this world anymore.

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But quite often senior executives still see it more as a ‘nice opportunity’ rather than a ‘strategic imperative’ and this kind of deflection can increase the risk of a business becoming marginalized. The perceived reluctance isn’t because executives are blind to the problem, it’s just that we don’t know of any successful approaches yet that can drive all of this fundamental change towards digital transformation.

It’s not that big Fortune 500’s aren’t trying hard, many of them afford outposts in Silicon Valley where some creative geniuses are brewing innovative, digital technology. Executives often point to these labs but fail to fully embrace the researched technology and apply it to their core business.

MIT proposes solution

A reason for this could be the short-term-ism shareholders dictate over executives. It forces them to think more “quarter to quarter” than “10-year-plan to 10-year-plan”. So the focus very much lies on smaller, incremental innovations that add a little bit to the bottom-line; whereas going fully digital would likely cause a great deal of upfront investment and disruption before its returns come to fruition.

One framework suggested by the MIT that can help reset the scene is called “Zoom out - Zoom in.” Here the focus lies on both a 10-year (or 20-year) horizon and 6-months intervals. The key question is how the organization’s demographics and key markets will work in 10 years and how the competition will look like in 10 years? What are the conclusions that can be drawn from such deliberations? What does it take to dominate the market in 10 years? And then, which steps are necessary to get from where you are today to where you picture yourself in 10 years?

That’s where the 6 months intervals come in. Twice a year executives sit down and consider the two or three key business projects that can have the most impact to bring the organization closer to it’s 10 year goal. Not to mention there should be measurements for success and a plan on how regularly to track the progress.

And of course the 10 years / 6 months interval isn’t a law, you could give or take 1 or 2 on both counts. But there needs to be a notable distinction to 1-year and 5-year plans which are otherwise very commonplace within organizations; those are going to be of less relevance for a successful digital transformation.

Broad predictions can suffice

And of course one thing’s a given: Since we can’t even forecast tomorrow’s weather accurately there is no way you could dream up a detailed view of what the world will literally look like in a decade or two. But seeing broad brushstrokes by extrapolating current development trajectories should give you a sufficiently precise idea of where your industry is headed.

Just think back to the early days of personal computing when Microsoft read the signs of the times and concluded that probably in a decade or two mainframes will make way for the desktop. Therefore you need to bet on desktops today to become a leader in that market 10 years down the line. That’s not overly precise as a forecast, but sufficed Bill Gates to make an informed decision to collaborate with IBM rather than any other prospect.

This example is a good guidance about the level of detail you want to aim for when thinking about your own 10 or 20 year plan. It is going to be hard, controversial and imperfect – however once the team internalized these constraints, there is nothing that can stop you.