We all want a place in the digital market, we all have strategies and discussions of how to win the battle. However, as part of this dialog, we often see different levels of abstraction to words such as ‘digital’, ‘AI’, ‘transformation’… We may point to the definition of ‘digital transformation’ and ‘digitization’, however, in this article, we rather structure a few of the terms to provide a more transparent dialog to what does it mean to have a place in the digital market.
The two terms ‘digital transformation’ and ‘digitization’ strictly are very different, but they are both part of the digital agenda. Where the digital transformation at the heart is about changing form and paradigm, the other one is to optimize while keeping the paradigm. So to have better discussions about internal or external forces, of effectiveness and efficiency in the digital age, we advocate to structure the digital dialogue using:
With a decomposition of a strategy discussion we start to obtain the common vocabulary for some of the apple-to-apple discussions of what we want to achieve as part of the digital agenda. The reason be that with our definition of Games, Themes and Elements we can start to have much more meaningful conversations to what does it mean to become ‘customer centric’ or make ‘a successful disruptive customer journey’…
The purpose of this is two-fold:
- to structure the dialog so we can compare apple-to-apple in the discussions and needs of using words like disruption, digital, etc.
- and second, to be able to break down the dialog to another level, where we can support the behavioral change of the strategy execution.
To increase the chances of winning a strategy, we need the construct of Themes and Elements which can be part of a behavioral change – and be made actionable daily.
So how to make a strategy successful? Of course, the content is part of it, which might be assisted by better digital planning or Digital Twins; however, even without the bullet proof planning, the strategy still needs to leave the glossy PowerPoint and become actionable for more people!
A successful strategy cannot survive successfully with high-level statements such as “we need more levers”, “digital customer satisfaction”, “larger on business value”, etc. For two reasons, it doesn’t answer the question of how and it doesn’t make it actionable for anyone within the organization. Having said this, when we help large companies, it is very often in that field of executing the strategy by encouraging more people to do what is actionable for them; one may argue it is less about the strategy, and more about getting to the point, where people can contribute to the strategy. This is how you make sustainable change.
To make a strategy executable, we need to de-compose it into Games, Themes and Elements, and then further into the ‘daily behavior’. If things become part of daily behavior, we start collectively to move. In other words, in order to succeed with the strategy execution, we need the decomposition that relates to daily behavior.
We have identified currently two håndful of digital elements, three digital themes, and two games, that currently seem to address most of the strategy-to-execution assignments we meet.
The two games represent the Outer Game and the Inner Game of an organization. These terms are re-used from leadership schools. These two games represent two different perspectives that will supplement or compete. The Outer Games is by definition the external perspective of ‘what is possible’. The Inner Game has a focus on the existing organization and competencies, hence ‘what can we do better’.
Digital Transformation by its definition is part of the Outer Game – how to design the new business model. The digitization is by its definition much closer to the Inner Game of how to do things more efficient – without changing our fundamental customer base, culture or anything touchy…
Now, the two games are related like strategy to culture, like Yin to Yang, like innovation to operations. They cannot live without each other, but they also represent opposite purposes. The purpose of the Outer Game is to follow principles of the Porter school, how to create a future into the market. As opposed to this, the Inner Game focuses on what can we operate, what can we do better, to fit with our capacity, our skills our collective win.
Now, having the two games defined, we see at least three digital themes that need to be addressed to make a successful change. We advocate to limit the themes to not more than these three Themes:
- [inventing] New Business Models
- [Changing] Customer Experience
- [Improving] Process Excellence
Then the digital elements are groupings within the Themes that are simpler to make actionable and behavioral. And to succeed with strategy to execution, we need to decompose into elements and make planning to support the digital transformation.
There is more research on the internet, where it is stipulated that moving forward with digital transformation, the best companies combine the [inventing] New Business Models with the Outer Game, simply to combine digital activity with strong leadership to turn technology into transformation then to future revenue streams. Other companies are less market focused, typically public service sector companies, which will then prioritize the Inner Game on [Improving] Process Excellence. Unless protected by regulations, borders or legal fence, companies that are more mature will eventually outperform those that are not. So, if you want to lead the digital change, choose the Game, Theme and digital elements that meet your need.
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