Thursday — June 24, 2021

The New Age of Digital by Isabel Wu — Edition 2

This article is written by Isabel Wu from Meta Management and covers all things digital. Meta Management is a consultancy specialising in helping its clients with the organisational assets that drive effective digital transformation and create value in a hyper-connected, constantly changing world.

Demystifying Digital Transformation

Digital transformation. The term invokes a range of responses. For some it is the key to new opportunities; for others, it is old problems, new name. After the year that was 2020, few will see it in ways other than synonymous with crisis. Which doesn’t have to be bad. In what turned out to be a year of one disruption after another, many have discovered that crises really are opportunities in disguise, and digital transformation are how those disguises are peeled off. It’s no wonder the focus on digital transformation has intensified.

“By acting early and being bold and decisive, CEOs can accelerate their digital transformation and reach the next normal sooner.”

(McKinsey, April 2020)

“COVID-19 pandemic is tipped to create a fresh productivity boost for the country, thanks to the accelerated digital transformation of all industries.”

(Australian Financial Review, June 2020)

COVID-19 has sped up digital transformation for Australian business by an average of six years.

(Twilio, July 2020)

“Why is this digitalization different from digital prior to COVID-19? … [It’s] the pace of adoption. … The digital part isn’t new, but the acceleration part is crucial.”

(Gartner, September 2020)

The verdict? Moving on new business opportunities is no longer for the already successful. Speed and unpredictability of change and competitive pressures make adhering only to old ways of doing business a liability. Caution and the illusion of certainty ruled how enterprises traditionally addressed possible opportunities. After months (or years) of deliberation, many projects often launched with the bar of success set at a low, “If it doesn’t disrupt or cost too much, let’s give it a try.”

The age of digital needs an approach that treats opportunity-leveraging as business as usual, not senior management pet projects. That approach is digital transformation. Digital transformations are not be be confused with digital strategy and technology projects. The defining difference is digital transformations don’t start with technology, but with behaviours.

Human behaviour is perpetually shifting in line with new attitudes and social norms. Every shift exposes an underserved, emerging or latent need waiting to be filled. That’s why crises can be such fertile ground for new business opportunities. To take advantage of them, enterprises must wire themselves to be behaviour-seeking organisations.

Notable shifts in 2020 like regular working from home, contactless transactions, heightened concerns for health and well-being, comfort dressing and more in-home entertainment may have started in response to a pandemic, but they are here to stay.

Many enterprises however miss the opportunities that come with behavioural shifts or lack the ability to effectively address them. The most common mistake is thinking traditional business and management practices can be transferred from their industrial setting to work in a digitised society. Industrial solutions are all but limited to product and service features and existing supply channels.

Digital transformations, on the other hand, find ways to extract new value through innovative business models, such as a department store in China that turned each department into a livestream on WeChat. New ways of doing business must be supported by new ways of working. Collaborative, creative and customer-centric practices like Agile and design thinking combine with technology to capture and deliver the new form of value to ensure operational and commercial success.

The benefits of digital transformations are exponential. Organisations that have successfully completed digital transformations tend to be better at withstanding, and are faster to react to, future shocks. Workforces that have gone through a successful digital transformation emerge more skilled and more engaged.

The hardest part of digital transformations could very well be making them part of your business as usual — and then deciding which opportunities you wish to pursue.


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www.metamanagement.net

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