Thursday, January 28, 2016

Five Aspects of Digital Strategy Management

In practice, digital strategy is a living process with iterative steps and a dynamic continuum.

The strategy is what you intend to do or accomplishes in terms of managing both resources and constraints to having the critical success factors in place and achieve the set of strategic priorities. In the strategy making process, one must also assess the environment, competitions, and other threats and opportunities and devise contingencies accordingly. With the increasing speed of changes and disruptions, digital Strategy-Execution is an ongoing continuum with iterative steps. Here are five aspects of digital strategy management.

Real-time planning: The strategy is not created in isolation, valuable and reliable real-time information about the organization must be available for the design of effective strategy. It is also crucial to make a risk assessment and constant evaluation of business environment, otherwise, you may end up having a strategic plan which is oceans apart from reality. The strategy has to suit your organization, if it is too rigid or prescriptive, it becomes a waste of time. What really matters is having a continuous dialog about the progress being made to achieve the strategic initiatives. Most executives view goal setting as an annual event, even though business is dynamic, and the business objectives can change over that 12 month period. There is nothing wrong with the annual revisiting of the goals, but goal setting should be event-driven as well whenever it is needed during the year. Thus, real-time planning is a characteristic of digital strategy. Strategy Planning becomes a "living process" with regular evaluation, scanning, listening, revisiting and potential course correction.

Multidimensional business values: Digital business is a hyper-connected and interdependent ecosystem, therefore, the business value needs to be defined via multidimensional length, including economic value, customer value, functional value, social value, etc. Too often the whole system is not considered when measuring values and success. Ask management teams to define business values in terms of outcomes they're helping the organization and customers to achieve and you will often get very tactical responses. To preserve "business value," you need to have a very clear idea of the "product" - its life cycle, the overall "value proposition," via multidimensional lenses, where it fits into the overall "product/project portfolio," the wider competitive landscape and your price/business model.

Agility: Agility is “the ability of business to adapt rapidly and cost efficiently in response to changes in the business environment.” What do you put in place or how would you then structure your business to ensure that the ability of your business to adapt rapidly. The focus is necessary to maintain or improve quality because there can be positive impacts as well as negative needs to be on capabilities for strategy management. One of the agile goals is to improve business resilience, which is also a critical business ability to fail forward and manage risks effectively. For example, some Agile organizations support and encourage the idea of highlighting "mistakes" by those who made them and actually in some ways rewarding those team members. This, in turn, reduces risks and promotes feedback, learning, and transparency. In essence, the twin goals of an Agile transformation are to increase value received and decrease risk.

Measure Leading Indicators: It’s important to keep tracking and measuring the outcome of strategy execution. There are many practical metrics and KPIs, but not every metric is created equal. The concept of leading and lagging indicators relies on an understanding of the cause-effect relationships between KPIs in the different perspectives. Leading indicators intend to measure the performance that changes ahead of the underlying strategy management cycle. For example, good process results depend upon a number of things included in the learning and growth perspective. Well trained and happy staffs are needed to make the processes work. Investment in new IT systems provides new capabilities and competencies (such as customer analytics and effective process control). Investments in leadership training affect the corporate culture and values, especially on innovation and empowerment. The learning and growth perspective are where businesses build institutional capacity and capabilities. These are longer-term investments which take multiple periods to have an effect on the financial KPIs (lagging indicators). That why they are seen as "lead indicators."

Harden the soft factors for successful strategy execution: Soft factors such as communication or culture make invisible but direct impact on seamless strategy management. More than two-thirds of strategy implementation fail to achieve the expected result, often the root causes are the soft business factors which underlining business capabilities. Most problems are systemic and require systemic solutions where people take accountability for their part in describing and solving them. Without denying the accountability of the person being asked about their performance, too often, the leader fails, explicitly or even implicitly, to acknowledge what they are accountable for in a situation or demonstrate a willingness to explore legitimate systemic issues beyond the performance, or even control of the team member that contribute to the outcome.

The purpose of strategy never changes, it’s the roadmap to achieve a vision of what organizations want to be, to achieve. But in practice, digital strategy is a living process with iterative steps and a dynamic continuum. Organizations must be proactive in keeping both short-term and long-term strategy goals in sight, and leverage the emergent digital philosophy, methodology, and tools to achieve a high-performance business result.


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