1. Embracing digital business models
~96% of Digital Leaders claim maturity versus only ~55% of Digital Adopters
Digital Leaders are open minded when it comes to identifying ways to create value. They are willing to look beyond their immediate sectors for inspiration and embrace new digital business models where appropriate (e.g., finding ways to enhance legacy products with digital solutions such as preventive maintenance analytics, developing and monetizing data services).
One of the ways that successful firms maintain momentum is by conducting regular benchmarking efforts that include not only their direct competitors but also leaders outside their own sector (e.g., in technology and retail). As B2C digital experiences increasingly influence expectations for B2B services and transactions, digital innovations made in other industries can provide not only fresh ideas but also insight into customers’ changing expectations for digital engagement.
In addition, Digital Leaders are often obsessive about capturing and integrating data about customer and supplier choices and actions, using both internal and external data sources. Insights from these data sources can unlock opportunities to drive greater integration across the value chain (which can lower supply chain costs or drive greater customer loyalty).
2. Embedding organizational agility and a “fail fast” mentality
~96% of Digital Leaders claim maturity versus only ~60% of Digital Adopters
Digital Leaders have revolutionized many of their internal working models in a profound way — by rethinking traditional ways of working to develop and support a culture of innovation. Similar to firms that have instituted a culture of continuous improvement, Digital Leaders have found ways to engage all aspects of the business to uncover digital opportunities for value creation. In addition, many firms have found that a centralized digital function or center of excellence can create the critical mass of talent and ideas necessary to accelerate innovation.
Digital Leaders also create a process to cultivate an internal pipeline of ideas, and then develop and articulate clear project evaluation processes that allow for small tests, pilots and iteration that encourage out-of-the-box thinking, agility, and controlled or useful failures. Furthermore, successful firms often find ways to insulate these processes from traditional firm bureaucracy, as long-standing investment criteria, metrics and decision-making processes are often ill-suited for new digital business models and small-bet experimentation.
3. Focusing on a small set of digital performance metrics
~95% of Digital Leaders claim maturity versus only ~62% of Digital Adopters
With new digital objectives must come new digital performance metrics, which are often different from those traditionally used to run industrial businesses. Careful thought about what will be measured, and how, is key to holding leaders accountable for delivering on the digital strategy and to ensuring it is not just paid lip service.
Successful firms identify business objectives for their digital initiatives, translate this into a set of digitally appropriate key performance indicators, develop the system to measure and track them — often through a specific profit and loss — and relentlessly focus on measurement and execution.
4. Promoting a “commercial-digital” mindset
~96% of Digital Leaders claim maturity versus only ~64% of Digital Adopters
Digital Leaders anchor themselves in an understanding of customer needs and a perspective on the economic value of digital opportunities. While this often requires more work and investment than does focusing on what is easiest to build with today’s resources, early strategic thinking guarantees that effort is not wasted building the wrong products and services — those that do not address customer needs.
One step that Digital Leaders undertake is to develop a deep understanding of the engagement life cycle through the eyes of their customers, recognize key points of friction and failure along the journey, and identify those that are profitable opportunities to better serve their customers using digital tools.