There is no hiding from digital disruption, and the pandemic definitely accelerated the process for many organizations. But while companies know they need to transform, they are really struggling with how to do it. This gap between knowing and doing started before the pandemic but it has been amplified with the rapid transformation brought on by COVID.Â
IMD’s 2021 Digital Vortex Report reveals that companies are looking for answers and not getting them, and the problem is actually getting worse. Even with widespread digital adoption, organizations are not learning as you would expect. Instead, more and more say they are responding to digital transformation and are investing heavily in digital tools and technologies, but they aren’t getting results.Â
Although 90% of executives say they are concerned about digital disruption, 39% also stated that their organizations were not responding appropriately. Furthermore, the percentage of respondents who reported having a fragmented digital strategy actually rose from 53% in 2019 to 61% in 2021. At the highest levels, companies across all sectors are formulating strategies to adapt and utilize the advantages of digital tools, however it is evident that things quickly break down after that. Effectively executing a cohesive digital strategy appears to be a pervasive problem facing organizations now, but there are things they can do to help.
Stop and do a critical analysis first
One of the observations that we have made at the Global Center for Digital Transformation is some companies jump right to execution mode without first examining why they need to undertake transformation and what their goals are for digital technology. It is important before enlisting any new strategy, whether it is digital-centered or not, to first analyze what you have in terms of resources, talent and what you aim to achieve when adopting the new plan. Instead of just asking how to do it, remember to examine why you are doing it.
Make sure your goals are realistic
We have all heard stories of the unicorns that have had spectacular results when they moved to a digital format, but it is important to understand that digital tools are not magic wands. Spectacular results are often the result of a combination of careful planning and strategy, strong execution, learning from failure and of course a little bit of luck. You can’t expect that simply investing in digital will miraculously turn your company around. There are digital tools that can enhance performance, but they need to work together with the rest of your organization.
Our research has indicated 87% of digital transformation programs fail to meet objectives. There are varied reasons behind this, but it is critical before getting started to ensure that objectives are precise, measurable, and that technology isn’t being substituted for organizational changes that need to be made. Everyone in the company must be included within the plan so there aren’t several different initiatives working separately. Companies often start in a haphazard manner and then have to go back and regroup. This can be avoided with better planning and communication early on in the process.Â