Exercising oversight of digital innovation - How Leaders can keep pace

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By Peter Williams Chief Edge Officer Centre for the Edge Deloitte Australia

Organizations are both transforming themselves with digital innovation and being transformed by it.

Apart from the financial benefits, organizations with reputations for successful digital innovation often garner strong followings among customers while becoming magnets for technological talent.

At many organizations, however, leaders & board oversight of digital innovation has not kept pace with technology. One major reason is the tendency of leaders and senior executives to retain attitudes and methods from the pre-digital age. Many still apply largely irrelevant practices, such as overly detailed business cases, in overseeing digital innovation.

Successful digital innovation hinges on new modes of thinking and acting. Yet many leaders and executives still think of it in terms of the long time frames and huge sums associated with IT transformations, where it would not be unheard of to have spent $200 million and still be in Year Two of the project.

A massive business case precedes such investments, and lingering technological uncertainty may cause sleepless nights. Many oversight practices from the past simply don’t apply to digital initiatives.

The ability to “think digitally” is a success factor for Leader and executive teams, who must now exercise oversight in ways that reflect current modes of innovation and general business challenges. While some leaders and executive teams get it, many do not.

Think digitally

Thinking digitally involves a shift from a traditional perspective suited to capital investments in physical structures and products to one more suited to initiatives that are virtual and experimental.

Here are four major differences between traditional and digital thinking:

  • Digital transforms activities. Digitalizing a process is not a matter of performing the same activity in a new medium. It goes deeper than filing sales reports on mobile devices or enabling web-based customer onboarding by exploring the development of new value streams, business models, and communities via digital technology. Many organizations are so slow to capitalize on the possibilities that their customers outpace them and begin doing business with companies better able to meet their demands.
  • Innovation is rapid and continual. In another example of holdover from large-scale capital projects, many leaders think a digital project ends when it is launched. In practice, most digital offerings undergo continual evolution. Although they have a beginning and a middle, and certainly a point of becoming operational, development doesn’t stop there. Users’ needs, competitors’ responses, and regulators’ requirements continue to evolve, demanding further innovation.
  • Mobilization is unprecedented. The hyperconnectivity engendered by digital transformation translates to the capacity to mobilize groups of people. Whether it’s Twitter providing a platform that ignites political movements, open-source software creating communities of developers, or multiuser platforms linking gamers worldwide, we can now mobilize people with shared interests at an unprecedented speed and scale. Yet most organizations still think in terms of networked ecosystems and how to digitize what they’ve always done; instead, they need to define where they want to be and how digital technologies can help them get there.
  • Late adopters and laggards die off. Most organizations use digital technologies to make their current activities faster, easier, and cheaper—a useful, but not transformative, goal.

A few aim to truly transform their businesses or, perhaps, entire industries or aspects of modern life. Too many leadership teams neglect to set goals and fail to act until it is too late, only to find they have been outpaced by competitors who can provide higher quality at a lower cost or they have been rendered obsolete by completely new business models.

Truly transformative opportunities open up for leaders who think in terms of business models rather than products. Their organizations move early and quickly. They learn by doing and understand what’s at stake. They place multiple, relatively small bets related to their value proposition, customer needs, and available resources while recognizing that these are all in constant flux.


….The ability to “think digitally” is a success factor for leaders and executive teams, who must now exercise oversight in ways that reflect current modes of innovation and general business challenges……

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