Wednesday, January 7, 2015

Digital Master Tuning VI: The Components and Styles of Digital Strategy

Digital strategy has special elements and unique styles.

Compared to earlier days, today’s strategy making needs to be more dynamic and iterative to adapt to the changes. In the book “Digital Master, “ we introduce the seven crucial components in digital strategy and five modern styles. Digital strategy is no longer the strategy-execution linear steps, but the iterative continuum to adapt to the emerging changes.    

Strategy design is the first important step in the strategy-execution life cycle. Because it is about where the ship is heading, the destination. It is also about some routes that can be taken. This defines what type of preparations you need to make the journey. You can also have a ship with no destination, or with no routes. The majority of organizations invest more resources putting a strategy together than developing and managing a sound execution plan. At the end of the day, it boils down to logic and not a game. It has to make business sense, as with the ship. If there is no plan there is no project; nothing will happen. A new strategy implies a lot of change and hence capital investments. It is not like you can change a strategy at no cost. Therefore, one has to be very careful before coming up with the suitable strategy and commitment.Things will change here and there along the way, indeed as to the choice of routes to the destination. In rare cases, the whole destination might change because it does not make business sense anymore. The digital strategy is about the approach in broad terms and should be quite flexible and agile. Furthermore, the strategy should take care of different possible scenarios in the environment. It should allow a lot of room for maneuvering.

A digital strategy needs to have the special elements. What are the magic components in digital strategy, you can explore the Digital Master” to figure it out? Although some companies are successful even with a weak strategy, they obtain some level of short-term success (could be years) although less success than their potential. The problem is that in the long term if the strategy is misguided they may end up in a bad place from which they cannot recover. This is why there are many companies fall from the top ranks over time and some disappear completely. So, if you get the strategy right and execution isn't perfect, many companies can still self-correct when times get really difficult. That being said, the biggest contributor to execution is executive level buy-in. However, more often, the executives who are getting what they personally want from the status quo often will fight any major change from it, this is why there is a gap from the designed strategy and executed strategy. Good does get in the way of great because change includes risk and in these cases, executives don't have the courage to take the personal risk for the betterment of the corporation.

Digital styles of strategy are unique. What should be the breadth and depth of your digital strategy, how many dimensions shall it have? You can read the chapter 3 of Digital Master -Digital Strategy to get clues. Looking at development you can dive deep, wrestle with the material and the result of this is that you not only understand the strategy, you start to feel it. The result is that then during implementation you possess the right flexibility for adjusting in case you have to. On top of that is the question on how you implement the strategy. Are you doing this in a directive way or more mission oriented? Should strategy be too detailed or to keep a wide range of options for implementation? Is strategy before structure? How to ensure that all tactical (operational) plan by all departments are approved by the strategy designer to certify alignment and also ensure that results of tactical plans are fed back to the designer before periodical strategy evaluation sessions to modify as required.

Although the strategy is more important than execution, but more often, execution is more difficult than strategy. Most organizations struggle in implementation these days rather than design factor. Old days are gone, talent and information are widely available to all type of organization. Having said that implementation is crucial to the success of any strategy and so is communication which is key for former. When you implement you have to deal with change management and prioritization and other frictions and conflicts. You should not do a handover from design to implementation. You need to have a seamless responsibility to follow through - the whole way from design to implemented and with possible iterations as well when you have to adjust your original design. You need to spend time defining clear metrics and KPIs and be transparent on achievements (good and bad) - and support with investment in process and systems.

Talent Management is a significant component of the digital strategy. A business strategy centers around the aim of the company. However, the individuals inside the company may also have their personal aims, ambitions, preferences and desires. To what extent are business strategies spanning several years aligned with personal annual objectives? How solid are strategies towards the end of a year that is heading for an EBIT underperformance?Every stakeholder from senior management to ground staff has their own personal objectives (including finding new jobs, vacation, starting something on their own, promotion, etc). These added dynamics makes the whole situation, even more, messy and complex. These dynamics are beyond control (or even anticipation) of the old-fashioned strategy designs. Discover more about the "PEOPLE" element in Digital Master.

Digital strategy needs to be capability-based, systematic, holistic and multidimensional; An action plan with solutions for any changes which may occur during the time frame of execution, and execution is an incremental process that has to well align with change management to deal with frictions and emerging changes. Try the following Fun Quiz of Digital Master to learn more about the digital strategy.

There are seven components in digital strategy. The magic code (the first letter of each component) is also a leadership capability. What is the magic code?    
A: Empower B: Enforce  C: Impacts  D: Engages

The five styles of digital strategy are unique and start with “S”, what are they?  


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