Senior Executives in pretty much all industries have now elevated digital transformation to the top of their strategic agenda. And they’re right to do so. The risk of falling behind the curve is so great that senior leaders are not debating whether digital technologies will affect their competitive position, but rather how to conduct an effective digital transformation and how fast it can be done. However, an organization’s determination to get on the front foot with a bold digital strategy often falters when it comes up against the multi-dimensional complexity of the questions it faces and the risks it must manage.
Should we prioritize short-term improvements at the expense of potentially larger strategic shifts? How fast will our industry be disrupted: months, years, or even decades? What level of risk are we willing to take on innovative new business models? Can we deliver our digital strategy in house or do we need to partner? The list goes on. Senior leaders are struggling to craft digital transformations that provide a balanced approach
between strategic risk and speed of execution. Part of the problem is that many digital transformation road-maps are designed as if every digital initiative has the same impact, time horizon, or risk level. That is not the real world. Success comes from consciously managing your digital transformation as a strategic portfolio over time.
This requires addressing three areas in an analytical and consistent way:
The Why – Insight and foresight about how the competitive digital landscape is affecting your industry and your business. This is about new sources of value creation as well as threats to your current position.
The What – Designing a portfolio of initiatives that will balance the need for short-term improvements with longer term strategic and business model evolution and allow you to respond within a risk profile that you and your stakeholders are comfortable with.
The How – The ability to execute on your strategy at the right tempo, balancing risk with the need for speed, and making the right trade-offs between in-house and external capabilities.