There is a lot of talk in public debates about a digital leap, which can even be frightening to company decision makers. Fortunately, there is an alternative. In this article, I will present a way to identify whether you should take a bigger digital leap or a softer digital glide.
What is a Digital Leap and a Digital Glide ?
The term ‘Digital Leap‘ is used to refer to the electrification of operations, but what does it really mean? The term becomes clearer when you think that digital transformation requires at least level four digital maturity. The key criteria for level four are a digitally enabled culture and a digital heart tailored to the core processes of the business.
A Digital Glide is a new term I have coined, which I think better describes how most organizations are actually going digital: slowly, without much of a leap. Levels 1-3 of the maturity model describe the steps that any organization can choose to take as it digitalizes, step by step.
5 good reasons to start a Digital Glide
A Digital Glide is often a less risky, more cost-effective and faster way for digital transformation, but on the other hand it offers few sustainable competitive advantages. Here are a few common reasons why organizations are starting to invest in digital.
1. Market pressure
Today, perhaps the most common reason to go digital is the pressure from competitors, customers or business partners. If all your competitors start to offer an electronic sales channel, you should be careful not to let your own business fall by the wayside. In particular, end users are increasingly demanding digital self-service channels. Even smaller self-employed businesses (hairdressers, massage therapists, etc.) are starting to feel the pressure to offer a digital booking channel.
2. More customers
For some companies, the existing customer base is enough, but for the rest, sales and marketing issues will have to be addressed at some point. Digital solutions are generally extremely cost-effective for this. For example, the search engine visibility of your website will increase your prospect base, and with an e-commerce channel you could attract a whole new customer segment.
3. Smoothing quality variations
A typical challenge for early-stage growth companies is finding time to develop and document processes from their main job. This can lead to excessive quality variation and customer churn. When quality assurance is transferred from human to machine in a controlled way, quality levels out.
A computer never tires of producing exactly the quality it is tuned to do. Of course, people have a responsibility to ensure that chatbots, booking systems, document storages and other basic systems are in a state that meets the needs of users.
4. Modernizing business culture
I have to admit that not many people will start a digital glide because of this, but I think it’s a downright injustice. I believe this is primarily because there is not yet a general awareness of the benefits. In reality, digitalization is primarily about the way people think and behave, and only secondarily about computers or software.
Let’s assume that your staff will put pressure on you to modernize your corporate culture to be self-driven. One way is to radically increase transparency. The backbone of transparency and alignment is usually provided by some digital system that is open to all, such as OKR metrics, teamwork software that enables swarm intelligence, or a common way of storing important documents.
5. Attracting employees
Until a decade ago, workers on average used the tools provided by their employer. Today, the situation is quite different. For employees, it is increasingly relevant whether their employer is in the Stone Age of digitalization or whether they are up-to-date. This can be down to very small things. Do you allow remote working or is it strictly forbidden? Can project work be marked on a mobile device or does it still require pen and paper? Can you apply for a job electronically or do you have to try to reach someone by phone?
5 good reasons to make a Digital Leap
You’ve set your growth objectives high and you can’t find a suitable finished software product directly on the shelf. Developing your own digital heart comes second in nature to you. You’ve built an annual budget for business development, and digital is one of your priorities. You encourage your colleagues to experiment boldly, foster an experimental culture and are patient about realizing value.
1. Climb ahead of the competition
When you set your sights high, you automatically compete with the best. With your own digital service, you create one concrete way to stand out from your competitors. For example, as a new player in the banking sector, you should invest in a particularly good digital experience, because customers might already take it for granted.
In contrast, digitalization is still its infancy in the home building sector, so might stand out with almost any digital service. Whatever the sector, a constantly evolving and dedicated digital heart is the gateway to a sustainable competitive advantage.
2. Launch a new service
Many dream of a situation where they can start building a business from scratch. By investing in a proper digital strategy and digital action plan, you are likely to save orders of magnitude on your overall investment in the years to come. The most expensive part of digital development is getting new digital systems into the core of your business, and this is a risk you manage through holistic planning and the use of expert partners, among other things.
3. Harness the ecosystem
A company looking for strong growth understands the power of ecosystem. Virality, network effects or simply building a traditional network of partners is a powerful way to accelerate growth. Ecosystem-based environmental modelling can surface ideas that can shift your business into a whole new gear. For example, when ramping up an international expansion, digital is likely to be one of the best tools.
4. Increase customer centricity
Whether you’re aiming for customer centricity, data-driven or product-driven growth, it pays to put your own digital heart solution at the center of your operations. A digital core solution concretizes and monetizes the interaction with your customers, providing a pathway to endless experimentation, control and improvement. Even if your chosen strategy is growth through recruitment, you will still need to manage the growing team in some way. The bigger the crowd grows, the greater the pressure for a tailored core solution will be.
5. Disruption = A Digital Leap
Tesla is an example of an industry that systematically rethought all the market-tested truths about vehicles: management software, AI-based autopilot, online ordering & assembly, and so on. Reform enough things and you could be disrupting either the local or even the global market. A Digital Leap is natural choice when pursuing a disruption.