Introduction
In this section we discuss Governance and Culture as the second of our digital success factors.
With leadership’s Vision for the organisation locked away, the focus is then on ensuring the enterprise has the right objectives, investment roadmap, business model, finances, controls and capabilities to realise its new found (or re-invigorated) digital purpose.
Communicating to empower a bottom-up approach is also needed to achieve operational breakthroughs and craft a culture of innovation and collaboration that are fundamental to enterprise success.
This includes interpreting the vision into strategic goals and performance metrics then prioritising those initiatives and investments that are going to contribute to these outcomes.
Importantly, this requires a strong commitment from the executive team to own the digital agenda with a governance framework that can effectively empower innovation at the operational level whilst coordinating, aligning and delivering the digital efforts.
A vigilant approach also enables the organisation to accept an appetite for risk that allows for a ‘test, learn and adapt’ methodology to take advantages of discoveries and opportunities that are part of any digital journey.
And then there are the priorities. What are going to be the priorities to start or reinvigorate digital momentum? Maybe some projects are already taking place but is there enough momentum or are they big enough, or able to scale-up, for the whole organization so that the transformation can be realised.
Finally, and importantly, how is the transformation going to be managed? This is a governance issue.
The Importance of Governance
When we introduced the barriers to becoming digitally successful in the opening ‘Adapted’ topic, many of them were governance-related issues. To re-iterate, these include;
- investments not being coordinated;
- a focus on discrete problems only;
- competing priorities from different departments since no common roadmap is available to guide the investment so duplication can happen quite easily; and
- lack of adequate funding.
All of these challenges need to be considered in the digital program. They can form a guideline for the rules and responsibilities that need to be defined for digital governance. The program should also include the rules for investment and management of projects and where responsibilities are going to be assigned for the digital agenda?
The planning process, then, should provide the organisation with an understanding of its current digital capabilities, shortcomings and opportunities to include;
- Identifying the type of transformation the organisation is going to pursue: either outside-in {customer experience} or inside-out {operational effectiveness} or both, as we discussed in the previous topic;
- Assessing current digital maturity – at leadership, capabilities and initiatives level;
- Determining how the nature of transformation changes the business model, for example, what will be the new digital products or services, new fans or markets to be pursued and digital partnership requirements;
- Determining how the strategy will be communicated throughout the business and how all staff will contribute. For example, some companies run activities such as an innovation competition for employees to stimulate idea creation, open the culture up to innovation and re-enforce digital messages; and
- Prioritising objectives, whether they are revenue growth and/or operational savings, and double down on them with resource allocation and urgency
The Nike case study from the Leadership and Vision topic offers a good insight into addressing these criteria. We can recall that, in 2010, Nike leadership set up its digital division to deliver a level of digital intensity that they did not have. They integrated a range of skills into this division including engineering, marketing, sales and product development to create and deliver the companies digital portfolio. The division’s responsibilities also extended to providing internal consultancy and operational support to help other divisions gain digital traction.
Governance in Action
I have witnessed a similar approach in sport organisations. However, and because sports are typically smaller and leaner than Nike’s, transformation typically does not need to include creating a new digital division.
Instead, responsibilities of a digital portfolio can be assigned to the department that already handles strategic projects (this could be a project management area or it might be in marketing if they skilled up that way or it could be the strategy area).
In any case, as well as leading the digital investment and projects to kick start the transformation, responsibilities of this areas can also include validating and oversight of investments that may either have emerged or already happening elsewhere in the organisation.
With governance rules in place and as investment in the first phase of the digital roadmap gets underway a natural momentum emerges across the organisation. Other departments call upon the portfolio area to be involved because they recognise the breakthrough opportunities the digital platform could deliver for their own benefit.
Since the technology roadmap is intentionally designed as a platform (aligned to enterprise purpose) it can then be built-out to tailor to the demands of all core areas; its architecture includes flexibility and scalability for the platform to be extended. The whole-of-enterprise solution is on its way to being built-out. Importantly, proposals that don’t align to the vision and platform roadmap are rejected.
Reading 1 and 2.
