digital strategy – closing the gap between your current digital reality and what is digitally...

Digital Strategy – Closing the Gap between Your Current Digital Reality and what is Digitally Possible

A Formicio point of view

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Advances in digital technology are having a profound impact on all organisations

The world is becoming more digital

Digital technologies have changed the way we work, communicate, travel, manage our health and are entertained

Individually and collectively, they enable us to do things that were simply not possible – or economically viable – a few years ago

Advances in digital technologies will continue to challenge our thinking on how our organisations could and should operate

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“The future is already here — it's just not very

evenly distributed.”William Ford Gibson

American-Canadian writer1948 -

The question is: not if your organisation needs to become more digital, but to what extent, and at what pace?

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Digital technologies are the enabler – real value comes from bringing what’s digitally possible into your reality

Examples include 5G mobile, big data, wearable devices, HTML5, Watson, 3D printing, IOT, NFC, digital currencies, digital robotics, context-aware computing


Value comes from making sense of the digital trends and applying them in your organisation

Digital technologies create trends, eg intelligent processes, omni-channel

customers, data-centric enterprises, platform-based businesses, cyber-crime

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For most organisations the challenge is keeping pace with the possibilities that digital technology brings

The number of digitally mature organisations ranges from 38% in High Technology to as low as 7% in Pharmaceuticals Source: Capgemini

‘Pure-play’ digital organisations like Amazon, Facebook and Uber have grown up ‘being digital’ – it’s their normal way of ‘being’

In most organisations the pace of becoming digital is characterised by a passive reaction to market forces rather than strategic intent

For many organisations the challenge is knowing where to digitally automate and where to digitally disrupt


“This ‘telephone’ has too many shortcomings to be seriously considered as a

means of communication. The device is inherently of

no value to us.”Western Union internal memo,

1896

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Advances in digital technology are driving both digital automation and digital disruption

Digital Automation Digital Disruption

Strategy Focus on efficiencies Focus on new sources of value

Business model Essentially the same, but more automated

Reinvented and transformed

IT architecture Based upon existing IT platforms

Based upon radically different IT platforms

Organisational capabilities

Available, but in short supply

New, different and scarce

Delivery approach

Structured, managed projects

Agile and adaptive experiments

Leadership Provide the resources Create the context

Culture Risk averse and silo thinking

Inter and intra organisational collaboration


All organisations need to decide the degree to

which they should digitally

automate and the extent to which

they should change more

radically in the face of digital

disruption

The Digital Spectrum

For most organisations the gap between their digital reality and what’s digitally possible is widening

What’s digitally possible

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Capa

bilit

y

Time

Corporate digital strategy

Organisational digital reality

The three digital trajectories:What’s digitally possible – Advances in digital technology that have the potential to automate and/or disrupt today’s business modelsCorporate Digital Strategy – Advances in strategic thinking that deliver value through digital automation and digital disruptionOrganisational Digital Reality – Advances in an organisation’s ability to successfully operationalise their digital strategy

Being more digital involves closing the gap between: What’s digitally possible and your corporate digital strategy – by developing your

ability to develop digital strategy

Your corporate digital strategy and your organisational digital reality – by developing your ability to operationalise digital strategies

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Many organisations have yet to take action to close the gap between their digital reality and what’s digitally possible

Calling in the digital consultantsAppointing a Chief Digital Officer (CDO)

Ring-fencing funding for ‘digital’ projectsRe-labelling existing projects as digital projects

Launching a set of ‘digital’ pilotsCreating a digital cell

Partnering with external organisationsAcquiring a ‘pure play’ digital company

Attending conferencesTaking a university short course

Participating in digital technology study tours


The question is not whether these and other actions will close the gap, but whether they will do so at the pace needed

If not, your current digital reality is unlikely to change and the gap will widen …

… and your chances of competing – and in some cases surviving – in the increasingly digital future are limited

digital

Actions for

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Closing the digital gap is about taking action to change the trajectory of your organisation – to one that is more digital

All organisations are on a trajectory, a path that takes them from where they are now to a future state

This trajectory is a manifestation of strategy – a strategy that has either been intentionally and explicitly defined or has evolved over time

Organisations that want a more digital future need to make informed choices on the best actions to put them on a digital trajectory

A major factor determining an organisation’s trajectory is its organisational capabilities


“The secret of change is to focus all of your energy,

not on fighting the old, but on building the new.”

SocratesClassical Greek philosopher

c 470 BC – 399 BC

The challenge is less about the technology and more about having the strategies and capabilities in place to realise what’s digitally possible

Transitioning to a digital trajectory requires different organisational capabilities to those of the past

Organisational capabilities: ... are formed from shared mental

models; established practices; common language; mindsets and beliefs; and shared experiences

... are embedded in the organisation and not lost when key individuals leave

... determine how the organisation operates and behaves

... are different from the skills and competencies of individuals

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Organisational capabilities are like muscles – the more they are used the stronger they

become

The stronger they become, the more they shape culture and

establish organisational habits

Ultimately, organisational capabilities define an organisation’s trajectory

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Some organisational capabilities can ‘pull’ the organisation to a digital future, while others anchor it to the present

Some organisational capabilities can shift an

organisation’s trajectory by ‘pulling’ it to a digital future

Other – more established – organisational capabilities can ‘anchor’ an organisation to its

current trajectory


Changing an organisation’s trajectory requires some organisational capabilities to be introduced, others strengthened and some weakened

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Transitioning your organisation to a digital trajectory requires strong ‘strategic’ organisational capabilities

Strategic organisational capabilities include the ability to: Confront your digital future – by

understanding where your current trajectory will take you: your default future

Develop a digital strategy – by defining the actions needed to change your current trajectory to one of digital automation and digital disruption

Operationalise your digital strategy – by creating the conditions that ‘pull’ your organisation to its digital future


“The difficulty lies not so much in developing new ideas as in

escaping old ones.”John Maynard Keynes

British economist1883 - 1946

Additional capabilities will be required depending on your chosen digital strategy, eg SOA management, data analytics, managing service platforms

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Five questions to ask if you are serious about being more digital

1. Do you understand your current digital reality; the future that your current trajectory is taking you to?

2. Do you understand the organisational capabilities you lack and those that are keeping your organisation on its current trajectory?

3. Does your digital strategy distinguish between digital automation and digital disruption, and where each should apply across the organisation?

4. Have you identified the organisational capabilities needed to change the trajectory of your organisation to one that leads to a digital future?

5. What actions are you taking to put these digital organisational capabilities in place?


“The important thing is not to stop questioning.

Curiosity has its own reason for existing.”

Albert Einstein 1879-1955

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Key points revisited


What’s digitally possible is evolving

rapidly

Your current digital reality is the

trajectory you’re currently taking

Closing the gap between your digital

reality and what’s digitally possible

means shifting your current trajectory

Changing your organisation’s trajectory

requires different organisational

capabilities

Digital organisational capabilities

are not easily copied or acquired

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This Formicio point of view was prepared by …


Dr David [email protected] is passionate about helping organisations develop the capabilities needed realise the full potential of current and emerging digital technology. His expertise is in developing and operationalising strategy.

Peter [email protected] believes that all organisations need to be innovative, and that innovation is an organisational capability that can be developed. His expertise is in developing insight through experiential learning.

Frank [email protected]’s passion is in helping senior leaders deliver major transformation change. His expertise is in building organisational capabilities for the future, especially in international and complex organisations.

Formicio was founded in 2010 by a group of highly experienced consultants and executives who want

to help organisations improve their futures.

We chose the name Formicio from two Latin

words, FORMO (to form or shape) and PROFICIO (to advance, make progress,

benefit, contribute) as we thought this aptly

describes the value that we aim to bring to our

clients.

mailto:[email protected]



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We hope you found this point of view on closing the gap between digital reality and what’s digitally possible of value


Our point of view is based upon insights and experience

that we have gained over time----------

The aim is to inform and inspire

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More points of view are available at:

www.formicio.com/Insights

Having a shared point of view is a powerful tool for achieving collective leadership as it can bring shared insight and understanding.

It can establish a context where everything makes sense, people know exactly who they are, what is needed and why they are here. Effectiveness is maximal, yet effort is minimal. Everything flows as it should.

Developing a point of view takes time and effort, but the outcome will be worth it.

The Formicio Team

16© 2016 Copyright Formicio Limited

We work with people who want to improve their organisation’s future. Specifically we can help you:

Assess your Strategy by understanding your organisation’s current trajectory and the factors driving it.

Develop your New Strategy by defining an organisational trajectory that leads to an improved future.

Operationalise your Strategy by creating the conditions that enable the organisation to pull itself to its target future.

Our approach is to help our clients find solutions that work best for them, while keeping them to their strategic intent

Tel: +44 (0)20 7917 2993

About Formicio