Quite a lot of articles are written about how businesses can face the era of ‘digital’. Quite a lot of suggestions are made that would form the kernel of a strategic response. Some suggest the need of Digital Platforms (yet leave the specifics undefined); Others suggest revamping existing processes (yet conveniently ignore how to start on that journey); A few even suggest transforming the entire IT department (yet don’t realise that its quite OK to wrap agility around solid reliability).
So its nice to see an article that approaches this ‘Digital Age Problem’ that businesses face in a nice and clear way. I follow a few of the old school strategy houses, digesting what they publish (openly and in books). McKinsey is doing a better job of this than others, say BCG as example. This article is particularly good. Firstly it asks the board of a company to confront six specific decisions (with my comments as to how relevant these are):
- Buy or sell businesses in your portfolio? (a business must focus on how to enter any new market or exploit any new channel, don’t pontificate too long)
- Lead your customers or follow them? (set a path and move forward, always move)
- Cooperate or compete with new attackers? (why not use amazon’s fulfilment, or create a slick app for your brand?)
- Diversify or double down on digital initiatives? (what is your ‘attack’ strategy, precise or scattered?)
- Keep digital businesses separate or integrate them with current nondigital ones? (how do you manage identity crisis and avoid ‘flash in the pan’ departments)
- Delegate or own the digital agenda? (who will sponsor this, and is it something that sits alongside the normal board agenda)
The best part is that the article lays out seven forces (how McKinseyesque!) that one can use to self-evaluate a company position prior to facing the decisions.
What impresses me is that all these decisions defer the technology to a secondary place behind the business objective. Of course, finding a technology strategy is probably the most expensive and difficult decision of them all!
Have a read, you won’t regret it.
BTW the authors are: Martin Hirt and Paul Willmott (@willmottPaul)