Global companies are all claiming anything and everything digital to be central to their strategic endeavours. It all sounds fantastic, until you delve deeper into it. On the implementation front, it seems digitisation is not delivering the returns desired nor expected. Is anyone even surprised?
Nicholas Van Zeebroeck, a professor of innovation and Digital Business at the Université Libre de Bruxelles, recently published an article in Harvard Business Review where he highlighted the poor returns on digital investments:
“Based on our recent worldwide survey of 2,000 incumbent companies across all major industries and countries, we estimate that the average return on incumbent digital initiatives is below 10% — barely above the cost of capital.”
These kinds of statistics haunt any executive. Pressure from shareholders for profitability, contracting customer expenditure budgets and increasing labour costs – to name a few – all make the need for technology-led innovation attractive. But then one reads of these poor returns on investment and making concrete decisions becomes difficult.
The strategy description that best resonates with me is: Strategy answers the question, “How are we going to compete and win?”. I like to delve deeper into this by expanding the question to, “How are we going to leverage technological advancements in order to compete and win?”
No matter what technology advancements come our way, some age-old business truths are still foundational, and here at Tarsus we have learnt a lot on our own digital transformation journey.
Ask, know and understand your why.
British/American author Simon Sinek has revitalised the importance of this starting point. Understanding why provides the necessary guardrails for decisioning, specifically pertaining to investment areas. A clearly defined ‘why’ will make sure you do not invest in new systems in order to keep up with the Joneses, nor get swept away in the latest fad.
Continuously communicate the why and the impact of change.
Understanding the why forms the foundation of how you communicate the need for change to stakeholders, particularly employees and customers who will be impacted by the implementation of new technology. Equally important is to communicate continuously, even beyond the successful implementation. People forget and must therefore be reminded where they have come from.
The customer has always been and will always be king.
Clayton Christensen and his partners have coined the term, “jobs to be done” as a reference to a wider investigation than simply customer needs. The argument is that all customers hire every purchased product in order to perform a job in their life. The question to ask therefore is, “What job does this customer need done?” The centrality of the customer is so important that I would argue, it must always be close to your why.
“Culture eats strategy for breakfast, operational excellence for lunch, and everything else for dinner” – Peter Drucker.
Yes, machine learning, artificial intelligence, robotics, big data and all other advancements are rapidly disrupting the status quo. However, technology implementation void of culture consideration is highly unlikely to succeed. Your people are the ones who walk your corridors and are the face of your organisation. As such, executives must carefully consider the organisation’s journey from its current state to a digital business. At the centre of culture formation are people and processes. It goes without saying therefore, that people, both leadership and employees, must be front and centre of all digitisation planning and implementation.
At Tarsus, our “Why” has always boiled down to our steadfast resolve to serve our customer well. We have implemented world-class platforms to automate and digitise our key internal processes as well as to drive operational excellence.
Ultimately though, operational excellence means we are able to better serve our customers. We have, over the last few years learnt a vast amount about the importance of continuous and transparent communication with all our stakeholders. Above all, we strive to instil an agile and collaborative culture internally as well as with our partners. This allows us to learn from them and better design solutions that best enable them to better serve their customers.
The digital journey is much like a mirage in the desert – always visible, but which one never quite reaches. The speed of advancement is ever-increasing and market expectations shadow that, which means leaders must constantly review and implement learnings, adapting and readjusting at every turn. Collaborative agility and fluidity are your best friends on this digital transformation journey.
Enjoy the adventure.
Senzo Mbhele is the Tarsus Technology Group Strategy Manager.