As digital becomes central to achieving growth, organizations that are generally slow in uptake can still manage to realize reasonable gains if only they can adopt a fast-follower strategy; learning from the environment and  engaging in short but continuous digitization.

The advancements in digital technologies and emergence of new-age businesses have forced the traditional companies to rethink their strategies and defend their positions in order to survive in the increasingly dynamic and competitive environment. While the leaders among them have realized the need to reinvent themselves and become digital, many others have struggled to hit the right path and withered away in the market place. The reasons for the failures are many but the common ones are:

• Leadership disconnect – Inability of the top tier to comprehend the threats of competition and adequately connecting with their ecosystem to understand changes.
  
• Legacy drag – Compulsion to sustain archaic IT systems and processes that are high on maintenance and demand more management attention.
  
• Lack of champions – Dearth of brave hearts in the second line of leadership who can challenge the top tier/ Board on their outdated strategy and showcase the path to recovery.
  
• Siloed structures – Very functional and siloed organization structure that operating towards conflicting objectives thus preventing collaboration amongst the employees.
  

These negative forces weigh them down to be laggards in digital adoption and they tend to scramble to keep pace with the leaders. Instead of giving up, they can still recover and reap rewards of credible performance- if not superlative - if only they can adopt a smart follower strategy. However, this comes with a rider that they need to be FAST at that. Once they establish a momentum as a fast-follower, they can accelerate their digital quest and aspire to be among the leaders.

This article presents some actions companies can practice as a fast follower. Any business wanting to gather pace of digitization needs to strengthen one or more of the fundamental building blocks; a digital strategy that aligns with the overall direction of the company, market and customer orientation to understand and influence customer decisions, a collaborative culture among the workforce and an understanding of the applicability of digital technologies such as Cloud, Analytics, IoT etc. However, there are certain specific considerations fast followers should focus on to accelerate their digital pursuits.

Galvanize Support

The success of a fast follower strategy depends on, without doubt, the conviction of the CEO who is best placed to lead a digital transformation by setting direction and fixing responsibilities for actions. If the CEO is not on board, the battle is lost even before it has begun. He/she may, however, wish to appoint the CMO, CIO or any influencer to be the ‘chef de mission’ to take charge of execution. The first step is to build a small team –may be just 3 to 4 – of likeminded influences across functions that can together impress upon the leadership and peers to act. The team will be involved in all aspects of digital programs and involve their colleagues and subject matter experts as per need.

A blunder companies commit is to expect an individual such as a CIO or a management executive who may not have the authority within the organisation to spearhead the digitization. By appointing a small set of cross-functional influencers, the chances of furthering an idea to execution is much higher.  The team could make the right interventions and support each other to promote the ideas for organization buy-in.

Listen to the Environment 

Fast followers‘s strategy should be built on learnings from diverse sources.  Engaging with customers, connecting frequently with employees, observing competitors’ actions - not just traditional but also non-traditional, enlisting the industry experts, assessing the outcomes of digital ventures of leaders are crucial to constructing their own digital programs. These actions require one fundamental quality to be perfected – listening, a deep listening that goes beyond mere understanding but results in constructive ideas and plans.  Participating in industry events, focus groups and other platforms that bring leaders and experts together can be useful sources of inspiration.  The learnings will have to be contextualized to company’s needs and translated into actionable programs that feed into the Learning Lab.  

Institute a Learning Lab

Establishing a lab that actions on the learnings from the industry should be the next focus area for Fast Followers. The lab can develop prototypes of solutions or test third-party solutions to evaluate the fitment to the organization’s context. The lab can also be used to demonstrate to relevant stakeholders to get their feedback. It should be made to work with minimum resources to avoid high outlays. A common approach that can be considered is to run pilots using open source tools where relevant and move to enterprise specific products when proven.

Keep it Simple

Digital leaders tend to take high risks in improving existing solutions or deploying new ones in a ‘fail-fast’ mode and continuously augment their digital offerings. Followers may not have the organisation backing to take such risks. Instead they should execute short projects that are built and executed in multi stages than as a big-bang. Drawing from the labs, the team should cherry pick small bets that can leverage on the traditional strengths of the organization but brings in a digital swap.  They should showcase wins to gain more support from the management and the organisation.

Engage with the People

The success of digital programs hinges on acceptance of the employees and their buy-in can hardly be overemphasized. The senior management should be on-board at every stage. Towards this, the team should continuously engage with the key stakeholders; the management and the employees to enhance awareness, seek ideas and suggestions and encourage participation in the on-going programs.  The team may do well to consider deploying platforms that bring the employees together for collaboration and also bring in a sense of competitiveness among the functions. They should evaluate leveraging social influence and gamification tools to drive change in attitudes and behaviours by integrating such principles into the collaborative platforms.

-----------------------------------------------

By continuously studying the digital successes of the leaders and contextualizing them for their businesses, fast followers can still achieve gains and be in a position to thwart competition reasonably well. The success lies in the perseverance of the fast-follower strategy and bringing changes that are in line with the organisation capacity.

----------------------------------------------

Change Management for a digital transformation can be more effective if it endeavours to go beyond achieving an ‘open mind’ (mindset change that emphasizes skill) to ‘open heart’ (that emphasizes will, an earnest desire to service and solve problems for the customers).

Today’s businesses are experiencing fundamental shifts around them as they encounter emergence of new businesses, changing customer preferences and surfacing of startups that threaten the established structures. Incumbents attempt to address these challenges by transforming themselves and increasing the pace of their digital investments, some succeed and some falter.

A crucial lever that determines success from failure of transformations is the way Change Management (CM) is orchestrated. However, it may be puzzling at times as to why even a regimental CM would come unstuck resulting in under-utilized investments or people reverting to old ways of working. As organizations learn from failures, it is being increasingly realized that for transformative programs like digital, companies should move away from conventional CM that is project based to a radically different approach of perpetual change.

This article attempts to illustrate further thinking on the approach to CM. True, businesses understand that in order to achieve transformation and embrace the new order, it is important to effect a mindset change among the workforce. While this intention is well placed, considering the moderate results, it may seem that this approach is inadequate.  Can they do more? Possibly yes.  Companies should strive to move from merely effecting a mindset change (the skill that opens their mind to new possibilities of business) to achieving a heartfelt change (the will that opens their hearts to servicing their customers).

Why is the need to transition from just a mindset change to heartfelt change? Traditional CM tends to largely emphasize the ‘technical side’ of the transformation that covers the business processes and technology enablement. While the relevance is understood, the question is whether they actually inspire the workforce to portray the sincere desire, the willingness and the empathy towards servicing their customers.

When customers are spoilt for choices, companies can hardly afford any gaps in overall experience across brands, functions and even geographical locations. They try to do the impossible of achieving standards of operations across these areas and hence design CM to promote the standards. Instead, if CM effort is oriented towards encouraging an ‘open heart’ culture that is people centric, employees will find ways of localizing them towards serving their customers.

Traversing from Open Mind to Open Heart

The journey from Open Mind to Open Heart is complex. How can companies guide their employees in this transition? There are atleast 4 fundamental shifts they need to accomplish. 

Shifting to Synergized Working from Siloed operations

When companies invest in transformation engagements they attempt to perfect the different functions of the organisation such as sales, customer service or logistics. In this quest, they tend to trip on the much needed co-ordination among these functions.  When the coordination fails due to lack of information or poor understanding of the problem, even the well designed customer-centric strategy would fail leading to dissatisfaction and churn. 

As customers, we may have experienced co-ordination gaps in our own interactions with our service providers.  We have may have had excellent interactions when our transactions fall into regular categories but seen it reverse when we report a problem and trying to get it solved.  We would wish that our service providers put more ‘heart’ to solve the than leaving us in frustration.

CM should encourage appreciation and learning of challenges of peer functions and more importantly inculcate willingness among the teams to move across functions or to collaborate to solve customer issues. This could sometimes require the individual functions to give up their metrics and work towards the tasks on hand.

Elevating to Empathizing from Engaging with Customers

As noted earlier, digital investments tend to over emphasize the business and technical side of the implementation and assume that the attraction of new technologies is enough to motivate the employees to change. The higher dose technicalities force employees to follow pre-defined scripts –newly developed possibly – than acquiring capabilities to deeply understand customer situations. In other words, the employees are trained to ‘engage’ with customers more efficiently than ‘empathize’ with them to understand their needs.

CM interventions should attempt to bring a perpetual shift that is high on empathy and educate the employees to look at issues from customer perspectives and their own roles from customers’ point of view.  Empathy encourages adopting different approaches and levels of interaction for different customers. A fundamental quality that helps in empathy is listening – one of the most undervalued skills.  A good listener would know when to stick to the script and when to move out to service a need by bringing necessary resources to the table.  Organizations would do well to encourage listening together as a team to a customer complaints or requirement in order to solve them and more importantly collectively learn together.  

Empowering to Taking Decisions from Escalating Issues

When over standardization translates into capabilities, the employees would hesitate to move out of the script and simply escalate to the higher levels. The employees should be empowered to make decisions, say in customizing or providing solutions to the customers.  Moving away from standardization should be encouraged within a overarching but flexible framework. In the long run, companies would realize that local decision making will eventually be more successful than global standards.

Towards this, CM should structure teams in a way that brings them closer to the customer.  Customer proximity should be enabled by technology such as social media analytics, customer journey mapping etc.

Moving to Bottom-up from Top-Down Construct of Changes

Customer centricity would remain just a slogan if the employees were not accustomed and trained to act in a truly customer-centric way. To bring about a change, employees should be allowed to be willing participants in the planning and encouraged to devise ways of servicing the customers.  Including the employees in designing CM programs by putting them at the centre of the strategy and allowing them to own the execution can help overcome their resistance and arduous nature of change. 

Achieving these Shifts

The journey to move from ‘open mind’ to ‘open heart’ is never easy and the rallying cry must start from the top.  The leadership should be united in the effort and reiterate the purpose and engage with employees as often as it could. Companies should follow certain general principles  that include but not limited to direct involvement of leadership, an effective employee engagement, social influence and appropriate technologies need to come together towards achieving the shifts.  The employee engagement should take centre stage and the CM should include employee-wise development plans, team workshops and identify and resolve conflicts.  A weekly if not daily debriefing on the quality of customer interactions that highlights the listening aspects, dialogue and outcomes across all levels of the organization would help further nurture the desired behaviours.

--------------------------------

In order to keep pace with dynamics of the digital world, organizations need to adopt new ways of managing transformations and driving the change within. They need to enthuse and empower the employees to move closer to their customers and encourage being more empathetic to their needs.  Achieving such behaviours require altering fundamental structure and traits of the workforce and bringing new norms of working across the organizations. Skills (open mind) are no doubt critical but more than that the will (open heart) to service customers is crucial to lead in the digital era.

---------------------------------- 

Businesses may need to rethink on the suitability of Run, Grow and Transform approach to IT management in the digital era.

Run, Grow, Transform (RGT) is a classic model of managing IT in an enterprise.  This approach would align with the way businesses have been traditionally managed and guide IT investments accordingly.

Gartner offers the following definitions of the three categories:

• Run-the-business and hence Run-the-IT is about cutting costs, improving price-performance ration and lessening the risk.  IT Initiatives are aimed at essential business processes and more importantly ‘to keep the lights on’.
• Grow is about improvements in operations largely within current business models. IT initiatives are looked at in the areas of sales improvements, customer service and product development.
• Transform refers to reaching new horizons for the company that may include new markets, products and business models.  These are large bets in business terms and IT initiatives will strongly align with the strategic direction of the company and transcend multiple areas of operations.
  

Businesses attempting to move up the digital value may have to rethink the suitability of this model, more specifically the IT management and cost allocation. IT organizations’ effort and budgets are typically split across these three categories.  A classic problem of this model has been the disproportionate focus on Run as  CIOs spend more time in running the legacy systems and tend to allocate upto 60% (if not more) of the annual budget on maintenance due to business demands and other legacy reasons.   ‘Grow’ and ‘Transform’ are treated casually thus constraining the ability organisation to be ‘future-ready’ and competitive.

Digital requires businesses to constantly innovate on their business models, make real-time changes to products and processes and place bets that are risk prone. In this refresh, technology becomes the driver to bring in new capabilities into the business operations. The continuous tweaking when pursued relentlessly can result in transformative outcomes and even being disruptive.  The risk of failure is equally high and in such cases the companies would need to quickly pick themselves up, dust off the setbacks and continue the quest. 

When companies acquire digital capabilities pursuing a larger goal to become customer-centric and achieve revenue enhancement, no longer will they be able to clearly distinguish the changes as Run or Grow or Transform as their attempts could straddle these three areas. This has implications for business functions and IT and more specifically, CIOs need to identify themselves with such pursuits and bring appropriate changes to their working methods, team structure and more importantly not constrained by pre-determined cost allocations. Companies need to allocate their budgets that should result in acquiring or enhancing capabilities for the organization.

Analytics – With the  volume of available data growing exponentially,  organizations hitherto relying on mostly structured data coming out of their enterprise systems for decision making, can now build sophisticated analytics that can help them take more impactful and real-time decisions using technologies such as big data. To build traction, organizations have to acquire data management skills, enhance existing data marts, build prototypes and continuously look for potential data sources. These require launching and managing multiple initiatives across functions and level s and integrating them for management dashboards.

Mid-level Managers in traditional organizations need to prepare themselves to operate successfully in the digital makeover. There are atleast 5 fundamental shifts they need to consider to safeguard their positions.

Traditional organizations in their pursuit to become digital businesses oversee a significant level of automation that transforms manual tasks forming part of their long legacy operations.  Automation inevitably leads to shifts in people’s roles and responsibilities forcing companies to redraw their competency maps.  Employees across levels need to become tech savvy, assume new responsibilities and work in tandem with systems and machines that will increasingly take over some of their tasks. 

While digital implementations touch many parts of the organization, the degree and nature of impact generally vary across levels and functions - from C-suite to shop floor and from operations to sales. The functional managers, comprising the middle layer, are no exception to the onslaught of these changes. In fact, they are impacted in more unique ways than one when compared to their colleagues in rest of the organization or counterparts in new-age organizations. This article turns the spotlight on them and discusses the shifts they need to consider if they wish to travel along with their organizations’ digital journey.

A Short Profile of Mid-Level Managers

Let us look at a typical profile of mid-level managers say in a mid-sized traditional organization consisting of 1000+ employees. They are largely ‘Gen X’ population in the age group of 35 to 45 or 50. They look for stability in the workplace, consider savings crucial to building families, make long term investments like housing and value work-life balance seriously. 

 In the organization hierarchy, they are first and second line managers reporting to department heads and supervising a sizeable number of workforce. They typically hold designations such as Mangers, Deputy Managers or Supervisors.  C-suite expects them to deliver results on a daily basis as per corporate mandate and plans. Thus they are extremely execution focused with no role in shaping strategy or contributing to the plans they get to follow.  

Digital Impact and Implications

As their organizations go Digital middle-level managers need to go through a transition that is rooted in a mindset change and transcends multiple areas; newer responsibilities, working methods, technology and business skills etc. However, not all managers are primed to absorb such changes.  To successfully operate in a digital landscape, they need to consider at least 5 fundamental shifts, when practiced consistently can help them safeguard their positions, assume higher responsibilities and contribute meaningfully to the demands of their organization.

From Functional to Process Focus (or Business Model Focus)

Existing Role– Mid-level managers are highly functional oriented and perform pre-defined tasks related to their departments such as Sales, Finance or HR.  They work more closely within their operating groups and normally have an arms-length relationship with other departments.

Digital Impact – Digital leaders tend to move their businesses from rigid functional structures to dynamic and flexible structures as they reinvent their customer engagement processes and establish new business models.  The constructs are never permanent and strengthened continuously to gain the crucial competitive advantage

.

Shift – Managers need to move away from the comfort zone of their functional focus (‘head down’) to a broader process or business model focus (‘head up’). They should be more tuned to handling cross-functional responsibilities and need to learn the broader contours of other functions if not the nuances and contribute to effective execution of the end-to-end processes than parts of them.

From Controlling to Enabling

Existing Role – Mid-level managers mostly operate in the tactical and transactional levels with ‘controlling’ as a key responsibility that gains significance where manual operations are high.  As controllers, they ensure that the pre-set business processes are followed all the time and people reporting to them perform their assigned tasks in time, without errors and as per standards. Managers periodically assess deviations and recommend changes to the processes that may sometimes implement a higher level of controls.

Digital Impact – Controlling can be a major casualty in digitization. Automation brings in inherent benefits such as improved output, quality and speed and reduced data errors all enabled by technologies that cover not just processes but also extend to functioning of machines and physical movement of materials.  For example, an IoT implementation in manufacturing would considerably reduce the supervisory tasks of a maintenance manager overseeing the performance of shop-floor machines and a Robotics Process Automation in a customer service centre would reduce the supervisory tasks of a service manager.

Shift – As technology takes over the ‘controlling’ tasks, managers need to move away from a controlling mindset to a more analytical mindset.  They should learn to read different levels of analysis and align details to outcomes to assess the performance of the processes or business models. They should also actively engage with leadership to recommend improvements contribute to planning.

From Individual to Team Players

Existing Role – Traditional organizations take pains to define detailed job descriptions for each and every role so that the individuals performing the roles have clarity and operate within the scope of the role. The boundaries are clearly drawn and the managers are trained to perform their specific role and not encouraged to intervene in other areas.

Digital Impact – Digital organizations expect employees to work more in a collaborative environment and engage with each other to solve business problems and reshape business processes continuously. They value team work more than the individual contribution.  

Shift – As teams, managers need to work closely with other members of the organization across functions, provide inputs in their respective areas of expertise,  consider other inputs and work towards a process of collective decision making.  Managers also need to build professional networks outside of their operating spheres to learn from multiple sources.  

From Risk Avoidance to Risk Taking

Existing Role – Managers are mandated to avoid or minimize risks at any costs and hence asked to stick to defined processes and not engineer new methods themselves. At most, they are encouraged to submit their suggestions for improvements that go through an evaluation process and implemented if beneficial.  

Digital Impact – Digital companies follow a ‘fail-fast’ approach to bringing new practices and this can be effective only if managers are encouraged to take risks.

Shift – Managers need to learn to take risks as they will be increasingly expected to implement changes to business practices on the go and try new methods of working that can potentially yield business benefits. Towards this, they need to assess competing approaches to business actions, compute trade-offs and be decisive in their selections without the fear of failures. More importantly they need to continuously learn from the hits and misses to improve their results. 

From Change Agents to Change Makers

Existing Role – Managers are the go-between the leadership and the workers and more often called to perform the role of change agents. Towards this, they need to understand the change - be it in business plans, structure or processes, convince the people at lower levels to accept the change and manage resistance.

Digital Impact – Organization structures and positions may be redrawn continuously leading to job changes or loss at times across levels. Further, due to automation, workers such as shop-floor personnel may need to learn new tasks and work with machines that can take away their routine tasks.

Shift – Mangers need to step up to design the changes that affect their groups than merely accepting orders for changes. They need to work with their superiors to influence the change design as they are in close touch with the workers and know their reactions. They need to communicate even more with their ward, identify skilling needs and protect top performers of their teams through appropriate interventions.

----------------------

Digital forays of incumbent organizations are bound to affect the roles and responsibilities, working methods and metrics significantly.  Middle-level managers should no longer expect to work in a stable environment with a clearly defined job specs. They need consider the changes that can prepare them to become an integral part of the emerging organization and contribute to the growth. 

Digital efforts due to their profound impact on business landscapes require establishing a Board Committee with a mandate to guide the company’s strategies and govern the realization life cycle spanning opportunity identification, investment decisions and implementations.

Businesses pursuing a strong growth agenda are realizing that technology is inextricably linked to their actions on the ground.  Their business strategy and technology strategy are increasingly becoming indivisible as they attempt to harness IT solutions to effectively compete and sustain growth in the market place. A study by Gartner on CEOs’ priorities for next two years indicates the importance CEOs have placed on technology.  In the study, IT is ranked 5^th surprisingly ahead of profits and new product that are ranked 6^th and 8^th respectively.

There is no industry that has not been impacted by digital. The intensity may vary but not the intent. Companies can hardly take a ‘will not affect us’ position when they witness changes around them. Hence, it is impinging on them to be pro-active and continuously reshape their strategy fusing strong business models and impactful technologies.

As digital takes the centre stage in the strategy conversations, companies try to ascertain who should lead the digital programs; whether it is CEO, CMO or CIO or the need for a new role like Chief Digital Officer and who the principle stakeholders are. However, while this debate gets traction, one group of key stakeholders does not seem to appear frequently in the deliberations; the Board of Directors. The Board’s involvement seems to be largely limited to providing approvals for digital investments and possibly review them if they come up during Board meetings.

When we try to investigate the extent of Board’s involvement, a quick scan of the constitution of the Board of a few randomly picked companies, would tell us that most of them, including a few leaders, do not have a Board committee for technology. While it is common to find committees for Audit, CSR or Shareholder Relations there is not one for technology and /or innovation. There could be reasons that are legacy related but as the businesses are increasingly driven by technology, one wonders whether the Board should play a more active role than be a passive participant. Consider the following:

• Technology is no longer seen as a mere enabler of business process but a strategy that can shape and employ new business models
  
• Nimble and new age competitors that have technology as the core of their businesses have the potential to disrupt the incumbents to the extent of even marginilising them in the market place
  
• Relationships with customers and vendors are increasingly determined by technology savviness than purely based on traditional strengths like brand or products.  A study by McKinsey suggests that about half of M&A successes depend on IT, which emphasises the strategy play of IT.
  

Given the high stakes, the rationale for the existing committees could well be applied to justify the need for a technology committee or better, a broad based digital committee. It can be modeled along the constitution of other committees with an aim to provide guidance and conduct periodic reviews of the digital programs.  The charter of a Board committee normally covers the mission, membership, meeting frequency and duties and responsibilities. Let us see how these apply to a digital Committee.

The Mandate

The mandate of the digital Committee would be to assist the Board and guide the company in the digitization efforts.  The committee can support the executives to strategise transformative digital programs to be an early mover in the market or quickly respond to competitors’ actions that may threaten the company’s position. The role of the Board committee becomes more prominent for small and mid-sized companies that may lack credible leadership across levels and resources to pursue successful digital programs.

Membership and Meetings

The committee should ideally be chaired by an independent director in the Board and can consist of fellow directors with need based support from executives. They can enlist experts and consultants to guide them where required. The committee can work with a structured plan that can act as a baseline and meet as frequently as possible with agreed minimum number of meetings.

The Responsibilities

The digital Committee needs to focus inter alia on 4 areas:

1. Digital Strategy

2. Portfolio Management

3. Leadership and Resource Management

4. Program Management

Digital Strategy - Asses Strategic Importance of Technology

A starting point for the committee could be to measure the effectiveness of existing technologies in their capability and flexibility to address the current business issues, respond to changing market conditions and scale up for future possibilities. The committee should guide formulating a digital strategy that can propel the company into the desired growth trajectory. The committee should also help move the strategy exercise beyond the CIO’s office by encouraging organization-wide participation and enlisting customers, business partners and industry experts where required.

The committee should continuously challenge their CxOs to ably leverage technology to further gains in areas such as business performance, employee comfort and customer satisfaction.  Their readiness should be measured against the new-age or technology savvy competitors’ efforts that may have the potential to threaten the position of the company in the immediate or near terms.  Armed with such reviews, the committee should periodically monitor the progress of technology strategy execution and ensure alignment and refinement to the changing business contexts.

In short, the committee should direct digital strategy in the following ways:

• Establish a ‘Digital Maturity’ scale that can reflect company’s position and market actions and that can measure the effectiveness of the current usage of technology and plans for the future.
  
• Collaborate with the leadership team, customers and business partners  to jointly formulate or refine technology strategy
  
• Periodically review the technology strategy execution and jointly address implementation issues.
  

Portfolio Management- Construct a right portfolio of digital programs

IT Portfolio management would typically mean optimizing the IT assets of the company by refreshing the portfolio through introducing or dropping IT assets due to technical reasons such as obsolescence, scalability etc. Such decisions normally fall in the domain of CIO. However, companies need to take portfolio management to a more strategic level where the decisions are based on business imperatives and future demands. This is where the Board committee can step in and guide the executives.

In most organizations, a substantial portion of the IT budget, even to the extent of 70% go to maintenance of existing IT assets and the rest on fresh investments. This undermines the company’s ability to explore and invest in future-ready technologies. The Board should guide the company to swap the ratio in gradual manner.

The future-ready can be looked at in two categories – the near future state and future state; the near future state is those technologies that have been proven but not yet part of the mainstream usage. An ideal company would have tested and accepted prototypes or already using these technologies in a small way. SMAC stack can be a good example for this category. The future state is the technologies that are in early stages of development, not yet proven but the company can start building prototypes. A good example could be IoT or Cognitive solutions. The Board would need to ensure appropriate investments in the future technologies while optimizing the spend on operational systems.

To summarise,  the Board’s involvement in this area could cover the following:

• Ensure the company bets on immediate and future technologies
  
• Budgeting that  commensurate with the bets
  
• Align performance measures and reviews to the investments
  

Leadership and Resourcing- Enlist right owners and adequate resources empowering them for success

Some companies still see digital as a technology foray and any attempts on digitization land at the door of CIO.  A seasoned CIO could be qualified to lead digital programs, however it may not always be effective as digital is often and should be deeply welded into the differentiators be it customer service, marketing or operations.  Hence, in order to realize the intended benefits and to fix end-to-end ownership, the efforts may need to be led by the most appropriate head. It could be function heads such as the CMO or Chief of Operations by a CDO.

The Board Committee is best placed to formulate guidelines on ownership and governance for digital programs that can cut out layers of decision making and minimize ‘baton-passing’ risks. The framework thus developed could empower and encourage the right owners to lead and navigate through the complexities of business models, technology and people alignment. A number of digital programs may need to be executed rapidly to either grab an opportunity or solve a pressing problem. Such fast paced moves bound to have their share of missteps, hence it is important that the framework encourages owners to take risks without the fear of failures.  The Board may choose to intervene to sufficiently resource the programs to ensure there the programs do not face any hurdles.

Hence, the Board can assist in the area of leadership and resourcing in the following ways:

• Formulate guidelines and mechanisms to plan and execute digital programs
  
• Bring in the right leadership to own the programs and ensure adequate resources to support the programs
  
• Evaluate business case and approve investments
  
• Help bring an high performing culture and encourage the teams to take risks and not intimidated by failures
  

Program Management – Provide for execution oversight and course corrections to ensure benefit realization

Execution is where the rubber meets the road and comes with inherent risks due to complexities involved. Many technology projects fail due to increased costs, inordinate delays and poor outcomes. According to an Oliver Wyman analysis, the world’s largest 500 com­panies lose more than $14 billion every year because of failed IT projects. 

The Board has to take active role in reviewing the progress of the digital initiatives periodically and ensuring the value is realized on the investment.  Where possible, one of the members of Board digital Committee can be drafted into the Steering Committee of implementation projects to monitor the progress and intervene when required.

Digitization is generally an enterprise-wide effort and depending on the areas could also focus on extended enterprise involving business partners and customers. The transition could be quick and may disturb the existing structures and positions.  Hence, driving change is crucial to achieve desired results.  The committee needs to strategise change management programs, communicate frequently with stakeholders to demonstrate that they are fully behind the initiative and ensure participation across groups. 

Most companies miss out on learning and gaining knowledge. What one arm of the organization does is not known to other arm. It is critical to bring in a learning culture in the company to know what works and what doesn’t and use the learning to improve in the execution of digital programs.  The Board committee should address this common flaw and force executives to share experiences across functions and group companies.

In short, the Board can involve in execution in the following ways:

• Measure value of incumbent IT projects and ensure they are in right track, adjust project mandates on the fly to suit business conditions
  
• Drive change, connect with stakeholders more frequently to know their feedback and ensure course corrections
  
• Encourage organizational learning that cuts across past and on-going programs
  

--------------------------

The responsibilities outlined may indicate a higher involvement of Board in areas that normally fall in the executive domain. So do we expect the Boards to be more ‘hands-on’?  To what extent can they question and challenge the plans and proposed decisions of the executives?  The answer lies in recognizing what digital can bring in. It can both be an opportunity and a threat; when pursued incisively by the company it has the power to shape the business for the future, on the other hand competitors can potentially destroy the position of the company by their calculated moves.  The companies thus face opportunities beckoning growth on side and threat of even closure due to early start competitors on the other side.  Because such changes are rapid, Board’s direct involvement will ensure that the company’s sails are set in the right direction to navigate through a rough and highly competitive business environment.   

----------------------------

Organizations need to shift to Digital Strategy from IT Strategy to create greater impact on their businesses through technology. The shift involves changes in traditional methods of IT investment planning.

There were a number of implicit assumptions that went into the such an exercise; that the business environment would be more or less stable, technology advancements would be predictable and organizations would benefit from a longer term investment plan. Cut to today’s times – businesses operate in an increasingly volatile and complex environment; the role of technology is changing and in certain cases driving the business models.

In such a situation, how should organizations approach their technology strategy? Can we hold on to these assumptions of stability? Can we still follow a hardcoded 2-3 year approach when the pace of change outside is drastic?  

Digital disruptions we see suggest that organizations need to follow a radically different approach to formulating their technology strategy. Disruptive technologies have brought in new business models with the likes of Uber or Airbnb.  Convergence of devices, connectivity and information availability have greatly enhanced the way we see and use technology. These developments have far reaching impact on the role of IT in the organization and thus the approach to IT Strategy.

To navigate through the complex and dynamic environment, businesses would gain by shifting from developing an IT strategy to promoting a Digital Strategy. An important aspect of this shift is the recognition of the potential of technology in determining business direction, a radical change from viewing IT as a mere function of the organization. 

Key Considerations for Moving from IT Strategy to Digital Strategy

Not business strategy driving IT but IT driving business strategy

In the traditional sense, IT was always considered as a business enabler which implicitly meant it would require business clarity that comes from business strategy. In other words, IT would trail business specifications. Well-defined processes and associated business rules were considered as pre-requisites for large IT investments such as ERP and CRM. A time delay in bringing appropriate IT was inevitable had its share of issues.

Digital strategy premise is that the boundaries between business and IT strategies have blurred.  They go in tandem and think of Uber or Airbnb,  technology may define the business strategy. Business specifications are not mandatory to select IT. Organizations may choose to follow processes defined by a business application or depend on a cloud service provider who provides business services built on strong technology.

Not long term hard coded but short cycle and dynamic

IT strategy would typically cover a 2-3 year plan providing a roadmap for IT investments with a provision to review on a frequent basis and re-word the strategy where required. It was easier for the CIOs to follow the plan, make suitable budget provisions and go through a justification and approval process. To a large extent, the plan remained static and execution would have the plan as the basis.

In the changing circumstances, a long term plan that is hard coded will have no meaning to organizations. While the planning will still have a multi-year visibility, CIOs need to be pro-active or react with agility to unforeseen business situations. Towards this, they may need to plan and execute for the short term and ensure that such plans all tie-up to provide long-term benefits.  Such situations would correspond more to market actions – either providing an additional service to customers or quelling a competitor’s actions and may span tactical and transaction levels. For instance, a bank may completely overhaul customer on-boarding process not envisaged initially,  taking care that such unplanned programs tie-up to the overall customer engagement process. 

Not comprehensive bulky but focused lean

Traditional IT strategy would cover all aspects of IT – applications, hardware, other infrastructure like networks and IT teams – that would be required to enable all areas of businesses, tied up vertically and horizontally to present a comprehensive plan. The dependencies would be laid out and hence investment decisions would cover all the dependencies.

Digital strategy is aimed at focused aspects of business such as customer services or backend logistics or regulatory compliance. These business areas can be seen as independent components and decisions taken as per the demands of these business components.

Not CIO centric but business centric

The custodian of an IT strategy would be the CIO in most organizations. He would own the plan and initiate changes when required. The requirements from the business would queue up in the CIO’s office and prioritized as per the plan document.

The digital strategy need to follow a more inclusive approach where the plans would be drawn up in close coordination with business and even customers or vendors. In progressive organizations, the involvement of business would also extend to execution where they may be allowed to take investment decisions (operating under an overall governance structure)  that may span selection  of applications, infrastructure and service providers. We see this change already in effect. In a survey conducted by McKinsey on IT strategy, more than 83% of IT executives indicated that their company’s IT strategy was developed collaboratively between IT and business.

Conclusion

A shift from older methods of IT strategy to a radically different approach of Digital is vital to the organizations operating in the ever changing markets to take full advantage of the advancements in IT. The change impacts all areas of organizations and need to be initiated at the top. CIOs need to work towards getting the buy-in of the businesses through their close involvement and ownership in key IT decisions.