“Being Digital” – Building Capabilities Towards the Digital Organization
To compete in digital markets, companies need a digital organizational strategy
For companies today, creating new digital business models and digital products and services is no longer sustainable under old models of organizational behavior. They must embrace a new approach that breaks up and reconfigures old modes of work, combining digitally-native abilities and behaviors with new technologies and work designs.
Such change is essential. Industry studies consistently correlate superior financial performance with a company’s commitment to digital strategy and organizational transformation. Digital organizations are based on new modes of leadership, new people skills and behaviors, and new cultural norms. The more that digital is incorporated into all functions and a digital organizational culture is broadly embraced, the deeper the competitive advantage and the greater the financial returns. Yet, for many legacy organizations change is occurring selectively. Digital technologies and practices are leveraged into existing product/service design processes and into established operational structures, often in functional silos, and even when silos are broken down digital change often misses the people dimension – the new digital mindset, abilities, behaviors and work practices that drive innovation.
Said another way, companies are flying without an explicit talent strategy for realizing digital in the organization. Employees and other workers are still viewed more as an input into production than as a constituent party that has a vital role in the design and delivery of products and services. Unanswered are the hard questions of how work must change as a human-technology agency across the enterprise to succeed in the digital marketplace.
In sum, a company cannot develop and execute on a robust digital business strategy without inherently thinking and acting in a digital manner. This requires building new organizational capabilities for digital strategies while retaining the strengths of the existing organization. These capabilities likewise require a talent strategy to create, foster, and make actionable new digital abilities, mindsets, behaviors, and work practices.
Realizing digital organizational strategy
To address the practical challenges of translating digital business strategy into actionable organizational and talent goals that collectively move the enterprise, we’ve developed the concept of digital organizational strategy. It serves to inform the reshaping of human interactions by identifying and prioritizing new modes of work based on networked relationships and behaviors that are tightly integrated in digital employee experiences and enabled through new digital abilities and mindsets.
The goal of digital organizational strategy is to connect people and work practices in digital contexts. When we say digital contexts, we mean both the strategic business contexts whereby digital creates competitive advantage, such as through new business models, and the specific kinds of situations and discrete practices needed to realize strategy – many manifested in emerging digital behaviors, skills, knowledge, and technologies.
Realizing digital organizational strategy involves the following key activities:
- Understand the company’s business strategy and operations, user constituencies, technology ecosystem, and overall experience of employees
- Identify new organizational capabilities required by the digital business strategy
- Conduct work analysis and define specific new behaviors, work designs, and cultural norms that enable organizational capabilities
- Define enabling digital employee experience(s) and supporting resources that shape work practices
- Identify issues and opportunities in the business design itself that must be addressed
The resulting work product is an actionable employee experience strategy that comprises solution vision, value goals, design direction, foundational technology assumptions, and roadmap.
In project methodology, we strive to identify in as specific a way possible the desired digital work practices and underlying ideas of work design and culture that realize key organizational capabilities required for business strategy. These will inform the design of the future online employee experience.
Key Organizational Capabilities
Tying talent strategy and goals to target business capabilities is a practical way of identifying specific actionable objectives for talent programs and experiences. Examples of organizational capabilities sought by businesses today include the following:
- Customer experience management
- Product and service design
- Digital asset management
- Business model agility
- Innovative culture
- Digital-first leadership
- Knowledge identification, creation & sharing
- Digital business commerce
- Risk and business resiliency
- Sustainability management
Work itself (e.g., procedures, practices, processes) will need to be reimagined in context to digital. Also, business design often must be addressed; for example, poorly coordinated processes or related programs pursuing different goals. These factors in turn provide inputs into a new specification of the work that the online employee experience will help to realize.
Finally, the idea of roadmap is critical. Digital is never a “big bang” for established businesses – understanding how to evolve capability is a key goal of digital organizational strategy. Behind these activities, of course, are specific practices, techniques, and protocols, such as constituent demographic review, user research, journey mapping, and work analysis assessments.
This approach may strike some leaders as bold and risky. However, transformation can follow several paths depending on circumstances, preferences, and resiliency. For example, recommendations may be ambitious, seeking to shift organizational behavior broadly and quickly, such as in opening silos to general knowledge sharing across departments. Or they may be more modest by seeking to realize specific, targeted behaviors, such as particular forms of learning collaboration.