Blog: The making of a modern digital business

Life @ Work

The making of a modern digital business

Decoding what it means to be a digital business, leader, and team in today’s disruptive world.
The making of a modern digital business

As a 21st-century working professional, you must have heard the term ‘digital transformation’ many times. However, despite the expansive thought leadership and opinions from pundits and ‘transformation-gurus,’ we still see 70 percent of businesses faltering on their path to digital transformation. For the scope of this article, I am putting together a ready reckoner of critical habits that will help organizations successfully execute their digital transformations.

Leadership: Four habits that will help you become a courageous leader

Today’s marketplace demands adaptive and brave leaders who can steer the organization towards an outcome-driven (results) mindset versus an output (project completion) mindset. As part of one of our reports, we had the opportunity to speak to John Marcante, Chief Information Officer at The Vanguard Group. The Vanguard Group is an American investment management firm that started in 1975. Today, they manage more than $5.6 trillion worth of assets. John Marcante had this to say about how they have evolved to stay innovative:

“I think about it like Maslow’s Hierarchy of Needs: having a flexible, service-oriented infrastructure is food and shelter. Being able to create quickly, test, iterate and automate products and microservices is the next level. As you go up the pyramid, the rewards get bigger, but it’s more difficult. You’re challenging the culture: people, processes, budget systems, legal, compliance, and security. The pinnacle is being a truly lean and innovative organization.”

Habits of a courageous leader:

  • Prioritize initiatives based on business value and cost of delay, over the effort involved
  • Don’t play it safe but proactively seek to create change
  • Nurture an open and lean structure and a governance model that fosters innovation and creativity
  • Empower the teams to function with autonomy

Culture: Five habits that will help develop an appetite for risk

Few businesses have been able to derive value out of experiments and uncertainties and unsurprisingly, they’re the ones who are disrupting industries. There is an enormous need for organizational culture to embrace the indefinite nature of digital transformation itself because risk aversion costs businesses high-growth opportunities. 

Let’s look at Philips as a case study. Philips began as the world’s biggest supplier of radios in the 1930s, and then in 2013, Philips sold its audio and video business to Japan’s Funai Electric. Three years later, the business had another new beginning. “We have transformed Philips into a focused leader in health technology, delivering innovation to help people manage their health,” Van Houten, then-CEO said in the annual report of the company in 2016, alluding to the lighting business being hived off. By 2017, almost 60 percent of Philips' R&D staff was focused on the software where the Philips Innovation Campus or PIC played a significant role. After refocusing its strategy, the company is winning big in the healthcare space by leveraging its expertise in artificial intelligence, machine learning, and deep learning. About 15 percent of the company’s total workforce at PIC works in the three segments.

Habits of a risk-taking culture:

  • Takes more effort to understand emerging technologies and ensures a more experimental approach
  • Is comfortable with ambiguity
  • Is open to learning along the digital transformation journey
  • Strikes a balance between taking risks and creating safety nets
  • Challenges complacency, especially when the business growth hits a plateau

Self-managed teams: Five habits that build a value delivery capability

Experimentation, innovation, speed, and sustainability demand that teams carry within themselves, the knowledge and experience to plan and implement initiatives. Traditional teams that worked in siloes and relied on external capabilities, support, and monitoring fall short during an organization’s digital transformation. 

Spotify, the popular music streaming platform, is a great example of scaling teams with agility. They owe their success to their deeply rooted agile methodologies and the utilization of the agile scaling in their way. This method is called the Spotify Tribe. A tribe may consist of 40–150 people. The foundation of the Spotify Tribe is autonomy and trust. Where there is trust, there is ownership and accountability of the work done. 

Habits of a self-managed team:

  • Be self-reliant and self-sufficient
  • Be collaborative
  • Experiment more but define a threshold for when to pivot, based on the value created
  • Be ready for increased accountability
  • Be trustworthy and trusting of team members

Technology is an equal-opportunity disruptor. For every slow-moving enterprise struggling to stay relevant, there’s a lean startup about to change the landscape overnight. For every legacy brand that deepens customer loyalty through a digital transformation, there’s a tech brand stumbling to recover from scathing reviews and scandalous headlines. Take note; modern digital businesses are erasing lines between business and technology. They are radically rethinking business models, and what customer value looks like.

 

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Topics: Life @ Work, Technology, #GuestArticle

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