What are the implications of becoming an increasingly digital organisation?

 

A reality of the modern world is one of constant change.  At a technical level this means the frequent release of new digital services to users, without them noticing and a move away from long release cycles and big-bang implementation (and the associated drama).

At an organisational level the differences are profound.  Digitisation and automation shifts the demand for resource, away from operations and towards change delivery.  This means that organisations need to commit their A-team, with all the right skills to design, develop and deploy the new services.

In an increasingly uncertain world, organisations need to fail fast and adapt quickly. This requires strong leadership and support, from all levels of an organisation, to overcome.  Like the digital technology, organisational change is best delivered in short iterations, allowing engagement, commitment and support to grow over time.

Once organisations have adopted a mind-set of constant change there are three areas to consider: digital platforms (over products and services); new capabilities; and new ways of working.

In addition to embracing digital and delivering services through digital channels, there is a wider opportunity to start benefiting from the (positive) disruption that results from digital platforms (similar to those that we all use on a daily basis like Google, Amazon, Uber, AirB&B and LinkedIn).  These platforms share a number of characteristics.

• They are digital businesses whose users identify with the channel (through which they receive the service) and not the organisation providing the service;
• Ease of use means that the user experience is so intuitive that there is no training requirement, and as a result, being almost entirely self-service; and
• Disintermediating by removing unnecessary duplication and waste – for example tasks, activities, people and sometimes entire organisations – from operations.

These characteristics can become guiding principles.  They also infer a different business model and so, achieving them requires a transition from ‘organisation’ into ‘digital platform,’ a seismic shift that demands careful thinking about purpose, strategy, culture and structure.

Becoming increasingly digital requires new skills and capabilities and different ways of working.  Many are common place (for example User Research, Service Design, Agile software and UX design).  However these capabilities need to extend beyond technology and as they evolve they bring new challenges with them:

• Extending beyond scrum teams by making agile work at scale and introducing new frameworks and new capabilities;
• Securing resource in a hot digital skills market that is currently unable to keep up with demand; and
• Engaging strategic partners, who you are confident that you can work with, to supplement in-house digital skills without long and uncertain procurement processes.

These are good problems to have, because they indicate that an organisation is bridging the gap between the pre and post digital world.  However, they emphasise the need for continuous improvement as ‘becoming digital’ throws up new and different challenges.

In addition to establishing and developing new capabilities, those embracing digital need to consider the implications for employee engagement, their ways of working and ultimately their culture.  It is pointless establishing Agile teams who are empowered to deliver if policies, performance management and career development pathways all act counter to their day to day ways of working.  This requires a focus on:

• Engaging the workforce, the organisational culture needs to reflect the reality of the digital world, this is essential for recruitment and retention;
• Taking new approaches to workforce development, this becomes increasingly important in bridging digital skills (and generational) gaps; and
• Living the new behaviours, the tone for the new culture is set by the senior leaders, addressing capability (and credibility) gaps needs to start with the senior team.

It is essential that the chasm between ‘digital’ and ‘everything else’ gets smaller.  The key to success is going further than building good digital products and services, by starting to become a digital organisation.

For more information please contact us or your usual AAB contact.