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Chartered Director

Building a firm foundation for Digital Transformation - Nigel Cain CDir

03 Nov 2019


In his previous article, Nigel Cain CDir touched on the need to understand the fundamental purpose (the why) behind digital transformation, considered the strategic choice dilemma and the need for the business to “perform and transform”. In the next few articles, he considers current state of the business, the need for a clear and compelling vision for the future and the importance of planning and preparation.

"Articles and books on business strategy, executive development courses and many of the strategic planning events I have attended in recent years have use the sport and disciple of mountain climbing to illustrate and highlight the necessity for clear goal setting, sound planning and preparation, effective leadership and clear communication between team members to achieve a challenging goal. The mental picture it provides, of a group or team needing to prepare, plan and work together to accomplish a mentally and physically challenging goal is a good analogy for envisioning, planning and delivering on strategic initiatives.  

When climbing, it is clearly important to assess and understand your current state and position, consider and select the best route forward, the most appropriate time to travel given current and expected [environmental] conditions, the waypoints and checkpoints that can be used to confirm progress, the plan of action and activities that need to happen as each checkpoint is reached, the potential risks and issues involved and whether all of the necessary skills and resources are available and/or can be easily acquired. The same can clearly be said for the journey of Digital Transformation.

From the board’s perspective, having decided that the journey is necessary for competitive advantage (see part I) there may be a number of alternatives to consider, multiple ways to achieve the desired outcome and – aligned with our mountain climbing example - the board needs to assess and determine the current situation, accept the reality of “what is” and choose the most appropriate route forward. As a result, the key questions the board needs to consider and that are discussed in next few posts are “Where are we now?, where are we going? and what’s the best way to get there given the (current) state of the business?” 

The need to confront reality as it exists, not how we would like it to be

There is a lot of management theory and (multiple) compelling examples of what the right vision does for positivity, growth and employee engagement. Indeed, having a clear and coherent vision of the future, being able to describe the outcome of reaching a particular goal or objective and what this means and why it is important is essential to any endeavour – business or personal. The right vision provides direction, serves as a rallying point, helping to focus effort and engagement on what is and what is not important and (ideally) provides a timeframe by which this will be achieved. 

The problem is that any vision needs to be grounded in reality, we need to recognize, acknowledge and confront the reality of our current situation, understand the difference between future state, where “we want to be” and/or what we might aspire to achieve in the future and our current state and condition since only from this point can we begin to think of and plan a way forward. 

In mountain climbing, safety is the primary concern. A thorough check of reality - as it currently exists - is a necessary first step in planning any expedition or a move to the next waypoint. The current position needs to be secure, the health and condition of team members confirmed, equipment, resources and supplies assessed and validated as “fit for purpose” and the current and forecast environmental conditions throughout the route checked to make sure the team can successfully and safely reach achieve its objective. Though it may be difficult to accept, the current position, health and state of the team, equipment or the prevailing and forecast environmental conditions may make the climb, the planned route and approach untenable and/or put the safe return of the team at severe risk. In such circumstances, the best approach may be to postpone (or cancel) the climb, consolidate, move to a safe and secure position, reassess and plan a new way forward.

From a strategic planning perspective, the board should already have a good understanding of the current position, since information and insights into market position and trends, customers, suppliers, the nature and type of competition and the current financial position is clearly essential for good governance and effective leadership. That said, given the nature and potential impact of Digital Transformation on the future of the organization, it is important to level set, to ensure that this understanding is shared across the board and is fully grounded in reality. 

A strategic review can help drive this clarity, especially if in addition to a review of the financial position, a critical assessment of performance against key performance metrics, competitive positioning and the relative health and culture of the business, it also includes the structure, effectiveness and diversity of the board. If the review is carried out in a spirit of openness, a willingness to collaborate, to learn and question underlying assumptions, perceived facts and to confront problems and issues head on and to accept the reality of the situation (no matter how hard or painful this may be), the insights and information obtained during this process will prove to be invaluable – not only as inputs into the process of Digital Transformation but also in helping the board to provide better guidance and leadership to the business as it stands today.

As in mountain climbing, the first principle is and should be safety – moving forward with what is likely to be an expensive, complex and time consuming transformation while the business is struggling to meet even basic objectives and is in poor financial health is clearly unwise. The strategic review may expose a number of fundamental issues that need to be dealt with immediately or in the near term to maintain the health and viability of the business or to otherwise “consolidate and secure the current position”. The board needs to ensure executive management prioritize and focus attention on addressing these specific points to ensure a safe and secure foundation while keeping the vision and potential (future) transformation of the organization firmly in mind. As a sustained focus on “fire-fighting”, dealing with immediate / short term issues and problems can quickly derail even the best long term strategy, the board needs to provide clear direction and prioritization in such situations. It needs to set out clear guidelines around what is and what is not important, define the scope of what (specifically) needs to happen to bring the business into a known good state and the timeframe within which this needs to occur. 

The strategic review may also highlight issues that could constrain or otherwise limit the set of options available, the activities and actions that can be taken and the pace at which (any) steps towards Digital Transformation could occur.

Now we know where we are, where are we going ?

As we will discuss in the next post, the considerations and key insights coming from the strategic review will not only influence the process of transformation but will also shape how and what the board communicates as the vision for the future."