ideas are worthless; execution is priceless
Regardless of the context, these expressions point to how organisations are designed to translate strategy into action, with culture also playing a role as a lubricant of coordination and speed.
When analysing a particular design, sound design principles have been applied; alignment to corporate strategy and digital maturity of an organisation most typically cited. We also hear non-strategic reasons such as ‘hardened business practices’ that can’t be broken, organisation and empire building by influential leaders, or quite simply, internal politics.
Reflecting on our observations, we have been able to classify digital organisation design into four distinct categories, each having its pros and cons
1. Digital isolationism
The digital team is structured as its own organisation with a leader that reports into the head of a corporate function or to a senior member of an executive. The team is charged with driving digitalisation across the business and developing an organisation-wide strategy, it has a budget for investment in ideation and proof of concepts, but not to develop and launch commercial offerings. Execution of the digital strategy is dependent on gaining genuine support of business units and gaining ‘permission’ to collaborate beyond symbolic activities.
Success is also dependent on the relationships the head of the corporate function has with peers, enabling paths to be smoothed and doors opened for the digital team (or not)
This structure is usually seen in organisations that believe digital may form part of their future, but it needs to prove itself before gaining a seat at the senior executive table.
Due to this isolated position, the team feels pressured to deliver something and tend not to be hampered by business unit constraints, thereby being free to generate breakthrough concepts and propositions having potential to generate value, but lacking the required support.
Under this design, digital teams are embedded within business units and operate autonomously from one another. The digital team's remit is to execute the strategies of their business unit, which may or may not be in harmony with other business units. This structure allows a business unit to move at its own pace and more digitally progressive leaders empower their teams to drive innovation, transformation and speed to market.
Whilst there are strong internal advantages, challenges comes when an outside-in view is taken of an enterprise, which may be confusing for customers to interpret and lead to lumpy experiences across a range channels, products and services.
Digital centralism is usually a reaction to the activism model where key customer and efficiency metrics are impacted, as well as digital occupying an elevated priority in an enterprise strategy. As the term suggests, the digital team, strategy and budget are centralised under the control of a senior leader who has the authority to design and push initiatives into business units, holding them responsible for execution and performance.
This design results in a coordinated and unified strategy that provides senior leadership with visibility of enterprise-wide developments
This represents the most digitally mature organisation design where activities have progressed beyond conversations and conflict, to digital becoming a way of life, pervading thinking and actions and acknowledged as an integral component of an organisation’s future.
Digital DNA is characterised by a senior team of specialised strategists and designers who are skilled at creating standardised digital products, services and processes and commercialising these at scale. They also possess soft skills such as negotiation, managing strong personalities, bringing people together for a greater good, and advocating on behalf of the customer. They work closely with digital specialists in business units who excel at managing operational offerings and understand how to maximise value and optimise the customer experience.
The journey to achieve a digital DNA is long and bumpy and requires early endorsement by the CEO and the executive team, which is handed off to ‘the digital team’ to embed as desired behaviours.
When discussing organisation design with clients, we often hear a desire to jump immediately to the Digital DNA design. Our advice is to first truly gauge where they are today, and if their level of maturity is low, to plan a journey that takes them on an accelerated path through different models to learn, grow and find how their organisation responds. This allows for the management of a transformation roadmap tailored to an organisation’s culture and capacity for change.
What we also find after we round out these conversations is we mostly agree that in today’s digital world, ideas are not altogether worthless, but it is the execution that truly creates value.
The market is changing. Progressive companies are rethinking their digital strategies. Get onboard.
Grow Advisors, Asia Pacific
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