In today’s digital landscape, it can be challenging for organisations to develop the strategies necessary to advance beyond their competitors. Executing strategies adds yet another layer of complexity to the process of achieving success in the digital marketplace.
Most organisations today do have a plan to become digital, yet many still lack the confidence needed to properly execute their strategy. According to research from Accenture Strategy, while 98 per cent of business leaders in Australia (compared with 78 per cent globally) expect their organisations to be digital within the next three years, only 42 per cent (compared with 30 per cent of leaders globally) feel they are adequately equipped to make the necessary changes to leadership and management practices to adapt to the digital ecosystem.
In today’s dynamic digital marketplace, while it is critical for organisations to have a solid digital strategy in place, strategy alone is not sufficient to ensure success.
Furthermore, organisations need to be aware that the transition from strategy to execution is not as simple as the flick of a switch.
The process of execution is longer than strategy; it involves more people, and requires the integration of a wide variety of activities. However, there are complexities to both components. On the one hand, strategy requires constant monitoring and adaption. While on the other hand, organisations face the challenge of managers perceiving execution as less conceptual and exciting than strategy, and often beneath their usual call of duty.
In order to ensure their successful development and execution, digital strategies need to be underpinned with operating models and capabilities that will enable them to execute at scale and speed. Through the implementation of the right digital operating models, organisations can ensure that digital capabilities can permeate all relevant parts of the organisation, and strategic theory can become part of an organisation’s digital practice. For instance, many organisations find the Centre of Excellence (CoE) model to be the most relevant to achieve their digital goals. This model supports the execution of each individual business unit’s digital strategy, by providing expertise, guidelines, and skills as central functions. The CoE model establishes common governance of digital investments and development and maximises the synergies between business units, meaning digital projects can achieve scale more efficiently than if they are left to the responsibility of individual business units within a decentralised model.
While the CoE model is perceived favourably among digital leaders, it is not the only solution, nor should it be considered the most relevant for organisations across the board. In order to maximise success, organisations need to first examine their current position and context before targeting a specific digital operating model. In doing so, organisations often find certain models to be more relevant than others, depending on the overall style of corporate governance in place.
Beyond this, the most effective operating model needs to be supported by the right capabilities. To ensure organisations have the right digital mindset and attitude necessary to embrace change and execution, the following six key capabilities should be considered:
- Understanding digital disruption — to maximise the potential to identify new trends, organisations need to look beyond their own industry.
- Building a ‘Digital IQ’ among employees — to predict and act upon digital services, each person within the organisation needs to operate with a ‘digital first’ mentality.
- Having a constant pipeline of ideas and experimentation — it is through constant experimentation that organisations will discover the most effective new products and services.
- Making the most of all the data — in order to realise the full potential of data, organisations need to implement sophisticated analytics.
- Creating pervasive digital trust — trust should extend across all interactions with customers, employees, and other stakeholders.
- Participating in digital ecosystems — in today’s ecosystem driven world, it is crucial to work with others to execute non-core activities and share and exchange new sources and inspiration for innovation.
Many organisations have already taken the first step to develop a clear strategy that acknowledges the central role digital plays in the future success of the organisation. To continue to build on this momentum, organisations now need to look to develop optimal digital operating models, underpinned by the key capabilities that will enable the successful execution of their strategy.