While deploying innovative digital technologies at scale is crucial to success, even the best technologies will not scale — and will create new risks — unless governed properly and ethically.
Driving innovation through ecosystems and partnerships
With customers today demanding personalization, convenience and great experiences, companies are realizing that they cannot meet all of these demands alone and will therefore need to forge partnerships.
More than two-thirds (68%) of all corporates surveyed in the EY study cite forging innovation partnerships as a core priority for the next 12 months. Even then, more than half of the respondents retain a general sense of skepticism about the opportunities that partnerships present, given the potential challenges involved in getting from ideation to a scalable solution that provides value to both parties.
That said, collaborations accelerate performance. A successful partnership can be engendered through trust, transparency, and equitable sharing of benefits, as well as effective operational enablement of the relationship.
To embark on the partnership journey, boards should first steer the business to proactively explore those areas of value that are too challenging or require too much capital investment to achieve with existing capabilities. The business should then scan the market to identify potential partners, undertaking “art of the possible” discussions before launching into the specific legal and contractual nature of the relationship.
Once the partnership has been forged, the board should ensure that the company sets up an effective relationship management process, supported by robust enablement services. A recurring review process should also be established to allow all parties to generate and receive value from the ecosystem.
Putting humans at the center
Two other winning practices of digital transformation leaders relate to deeper customer centricity and employee engagement.
Digital transformation leaders focus on customer centricity steadfastly, making it their number one objective to meet customers’ changing demands. They are also focused on developing new incentives and mandatory training programs to nurture talents in their employees, rather than relying on shorter-term fixes, such as contracting or acquiring companies with desirable skills. In this respect, boards should pay close attention to creating a workforce that encompasses a diverse set of skills at all levels of the organization.
By embracing the six habits mentioned earlier, digital transformation leaders have been able to reinvent themselves and use technological disruption as an enabler to unlock new value sources. To help their companies grow into digital transformation leaders, here are five questions that boards can consider:
- Does the company embed data at the heart of its business, i.e., connect the “brain” of the business (data) to the “body” (operations)?
- Does the company dedicate ample resources to drive and execute a culture of collaboration and partnerships?
- Are the innovation and corporate governance teams aligned and in step with each other?
- Does the company have a plan to “build, buy and borrow” talent to address future skills gaps?
- Does the company embed the focus on customer experience across the entire organization, and not just in customer-facing roles?
Summary
Companies that excel in digital transformation and are able to monetize their efforts are those that have embedded and optimized such transformation across their business and advocate a transformational culture. Successful digital transformation leaders exhibit six common habits, according to an EY study, Tech Horizon: Leadership perspectives on technology and transformation. Companies that embrace these six habits not only achieve better results in digital transformation, but also show better financial performance than their counterparts that do not.
