Having a digital strategy is a prerequisite for a successful digital journey – as long as the strategy is ambitious, well-founded, and has clear KPIs. The strategy and its performance metrics should also be clear to all layers of the organization.
This may be true, but what if top management and Line of Business (LoB) do not share the same view of the strategy and how ambitious it is? According to NNIT's Expectation Barometer, which in 2019 focuses on Digital at Scale, there is a discrepancy between the way management and LoB evaluate their digital strategy. Whereas top executives believe they have set a fairly ambitious strategy – an average of 6.5 on a scale of 1 - 10, their employees are generally less impressed by the level of ambition and score 5.9 on the same scale.
– This may indicate that many organizations can afford to be even more courageous when formulating their goals. On the other hand, the difference between organizational layers may also reflect the fact that it is typically top management that draws up the strategy and sets the level of ambition, explains Brian Troelsen, Business Development Director at NNIT.
From the very outset, management should make a number of fundamental decisions about which concrete improvements the organization wants, what the success criteria are, and when they should be fulfilled. The organizations, however, must also accept that they will not necessarily achieve their goals by setting a more ambitious strategy – aiming high should be an integral part of the innovative mindset.
– Just go ahead and set ambitious digital goals - even if you are not sure you can achieve them. If you don't reach for the stars; others will, emphasizes Brian Troelsen.
When working on strategy, it is crucial for the long term digital success of the business that strategy relates to both the development and financing of new initiatives.
The Expectation Barometer results clearly show that many organizations are working hard to create better customer experiences. A total of 81% say that CX - customer experience - is one of the primary purposes of their digital strategy. At the same time, 63% reply that their purpose is to improve processes efficiency, 53% to minimize cost, while 44% believe that the strategy's purpose is to reduce complexity.
- It is positive that there is a relatively high level of support for both innovation and more bottom-line oriented goals. At NNIT, we strongly support the use of technology to develop innovation projects and, for example, strengthen the CX work; the clear top scorer in the Barometer. But these kinds of projects also need financing, and it gives me cause for optimism that companies generally seem to create broad-based digital strategies that relate to both efficiency and innovation in their organizations, explains Brian Troelsen.
A digital strategy is, however, not just a matter of objectives and choice of technology, but also involves embedding the digital mindset deeply into the organization.
An average of 61% of the Barometer respondents report that their approach to digital scaling also involves working with smaller pilot projects in selected LoB. However, this average is widely spread between management and employees. For while as many as 70% of the managers say that they are working on pilot projects, this only applies to 54% of the employees - a difference of 16%. This might indicate that employees are not entirely familiar with the pilot projects their organization has initiated.
The advantage of testing new technologies and digital initiatives in pilot projects is that they give the organizations the perfect chance to pressure-test opportunities and potentials. On its own, though, a successful pilot test is no guarantee of a successful roll-out or later embedding in the organization:
– It is important that management keeps in mind the big difference between testing something among a handful of selected employees and rolling out the project in an organization with, for example, 5,000 employees. A number of cultural [JS1] barriers may exist, and it can also be technically difficult to scale a project to such a high number of individuals, who may even be spread over many locations and countries, explains Brian Troelsen.
For this reason, it is absolutely essential that top management does not underestimate the challenge of embedding pilot projects in the parent company after the test period. They must dare to think long term, and at the same time prioritize the ongoing internal communication of the project's importance.
In the final analysis, it is the employees who have to take the strategy on board and bring it to life in day-to-day operations. This is why management should be aware of making the strategy LoB-specific - what do new initiatives, goals and priorities mean for the individual department? How does it affect the way they do things? What does it mean for the way performance is measured?
The Barometer analysis clearly shows that employees and the management have very different perceptions of how far their organizations have come with digital development - and also about the potential obstacles.
Here, Brian Troelsen points to the fact that 45% of the respondents at employee level believe that their organization is challenged by a lack of digital vision, while the same only applies to 24% at management level.
The Barometer analysis also indicates that employees have a distinctly different perception of the strategy's purpose than management. While 57% of employees interpret the digital efforts as a pure cost exercise aimed at streamlining processes and creating savings, only 30% of top executives say that cost is the primary purpose.
- It is easy for senior management to go out into the organization and declare that "we now have a digital strategy", but if you sit in LoB and do not know or understand the purpose and priorities of the strategy, it will be difficult to help it succeed. The results of the barometer analysis can therefore be seen as a very clear call to top management that they should in no way underestimate the communication efforts associated with strategy, says Brian Troelsen.
This year's Expectation Barometer delves into the opportunities awaiting Danish and international companies, and their readiness to scale their digital initiatives. What differences are there? And where? And what does it require - strategically, technologically and organizationally - to scale such digital
initiatives? We call this Digital at Scale.
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