The top digital leaders have mastered the ability to operate at genuine scale while not sacrificing agility, according to management thinkers Bain.
A new paper called “Anatomy of a digital forerunner” written by Elizabeth Spaulding, Sarah Dey Burton and Greg Caimi argues, “Business and retail customers alike have come to expect a smooth, omnichannel buying experience whether they are purchasing a pair of socks or a million-dollar piece of construction equipment.”
The authors say that Even the most traditional companies are finding ways to transform their competitiveness by reinventing back-office processes, speeding up supply chains and reimagining service offerings.
The very best performers who they describe as digital forerunners combine the scale advantages of incumbents with the speed and agility of native digital businesses.
Among the obvious candidates are internet old timers like Google, Amazon and Facebook along with relative newbies like AirBNB and Uber.
The company describes five characteristics it says are shared by the digital winners;
- The vision to disrupt, not be disrupted Digital forerunners develop a compelling vision for how to lead the disruption that digital technology creates, not follow it.
- A commitment to understand customers and take action Companies have struggled for decades to understand what their customers really want and how those requirements change over time. But digital forerunners are solving that problem by harnessing Big Data and developing a dynamic “smart view” of their customers.
- An integrated customer experience Digital forerunners strive to first understand what customers really care about and then create an integrated strategy to use the right mix of physical and digital assets to deliver the most relevant, convenient and differentiated customer experience possible.
- Speed and innovation Leadership is committed to encouraging a culture of experimentation that rewards calculated risk-taking. These companies learn to embrace failure; they use rapid prototyping and small-scale trials to learn quickly and iterate toward the right solution. They develop tight feedback loops enabled by advanced analytics to test, learn and test again
- Capabilities that cross over traditional boundaries Dialing up customer responsiveness and speeding innovation through digital technology often requires organisational realignment. Digital forerunners break down silos and increase communication between functions by restructuring roles and reimagining how teams interact.
The authors sas, “What’s at stake, of course, is industry leadership. The companies that can increase their digital fluency and create value throughout the enterprise are increasingly coming to dominate most markets. And because so many digital offerings and business models also create network effects that amplify the advantages of scale, it is especially critical not to be left behind.”
While many leaders recognise the power of this argument, Bain’s analysts say many are unsure about where to begin. Analysis paralysis sets it, oceans are boiled endlessless and too many executives are overwhelmed by a seemingly endless set of investment options.
“In our experience, the relative few companies that are setting the pace in digital transformation push past this moment of indecision and dive in, confident that they will gain a deeper understanding of their customers’ needs and use it to develop innovative, elegant solutions.”