It’s interesting to see how themes in leadership and business ebb and flow like ocean tides.
For the last five or so years, the overriding theme has been digital transformation. But as leaders came to grips with what digital transformation meant for their organizations, the focus shifted from digital transformation to business transformation, because digital, in whatever form it arrived, was an accelerant designed to help leaders change the businesses for which they were responsible. It helped them focus on what mattered, which was not technology. It allowed them to understand, for example, that adoption of cloud services was a business decision, not a technology decision. It allowed them to come to grips with the idea that having cloud-based capabilities, like application hosting and managed services, is strategically important. Owning and managing the infrastructure was not. This was an important realization, because it focused leadership attention on business outcomes rather than on technological superiority as a false business differentiator.
This is not to say that technology is unimportant — far from it. But the playing field is shifting yet again, this time toward the vague concept of digital maturity. Organizations across the globe and across industries are in search of companies they deem to be digitally mature so they can observe them, emulate them and hopefully benefit from their journey from digital adolescence to digital maturity. But here’s the flaw: There are no digitally mature companies. They don’t exist. There are companies that are digitally maturing, but no company has yet crossed the finish line.
What Makes a Digitally Mature Organization?
Given that there is a continuum of digital maturation and that it is worth emulating, let’s take a look at the characteristics of organizations that are on the more mature end of the development scale.
First, they implement deliberate, systemic changes around structure, workforce development, organizational innovation, and the care and feeding of digital-centric cultures and customer experiences. Second, they routinely innovate, but start on a small scale. They go for small wins that have a measurable impact on the business, what Tom Peters called 'skunk works' in his seminal book, "In Search of Excellence." If — and when — these efforts succeed, they can more easily be scaled enterprise-wide.
Finally, these organizations put great effort into developing leadership that has a vision of technology as a central tenet of their success formula. As a consequence, they tend to attract great talent.
Related Article: On the Path to Becoming Digital, Don't Forget the Humans
The 3 Roles of Technology in Digitally Mature Organizations
The truth is that digital transformation is alive and well in digitally maturing organizations, because leadership sees technology as central to their strategy. And when we break down the success formula, we find that technology actually wears three hats. The first is Digitization, which manifests first as the deliberate move from an analog construct to a digital one, and the realization on the part of the organization that the data they control has enormous value.
The second is Digitalization. Digitalization, as opposed to Digitization, is all about using digital technology to evolve the existing business model to generate new revenue streams and improve customer engagement scores through a richer, more nuanced, more contextually-relevant customer experience. More often than not, this happens because of cloud-based services provided by the company that allow the customer to have the same experience, regardless of where they are or what device they’re using.
Finally, the last leg of the stool is digital transformation. This manifests as the manner in which leadership uses technology-based tools as a competitive weapon and as a transformation agent to reshape the organizational business model and to transform the culture to meet the demands of the constantly changing marketplace.
What Sets Digitally Maturing Organizations Apart
In the final analysis, then, what do digitally maturing organizations do that sets them apart from all the others? Five things:
They prioritize customer business outcomes over everything else. They ‘reverse-engineer the future of the business.’ They engage in skunk works activities to test and implement small successes. As they say at Google, ‘If we don’t give our people permission to fail, then we don’t give our people permission to try.’ Sage advice.
Finally, digitally maturing organizations carefully manage and balance the roles of technology, data, and evolving business practices, and then prioritize the results of each for greatest impact.
The question, then, is this: Thinking about the things that digitally maturing companies do, where are you on the continuum, and what are the few things you would change to move in the right direction of organizational maturity?