No digital transformation can be accomplished without significant investment in people. Digital tools and assets without people who can effectively use them cannot deliver the desired outcomes. In the end, it is people who conceive and execute an effective digital strategy using digital tools. With the growing importance of digital strategy, the importance of individuals with the digital-first mindset and necessary digital skills cannot be limited to special teams or dedicated digital units. Instead, a firm must have digital personnel throughout the organization. To do that, a firm must consider: digital talent, digital innovation practice and digital leadership and governance. Organizations must develop a coherent company-wide digital talent development strategy, system and process. Digital personnel must have a digital-first mindset and innovation practice to effectively engage with customers as users using various tools. Digital personnel need to be led by a well-established company-wide digital leadership and governance.
Digital Talent
A mature digital-first firm has well-established career paths and a talent development system dedicated to digital personnel throughout the firm. Digital personnel refers to employees who develop, manage and use various digital assets to create value. Unlike traditional firms where all digital-related skills are primarily limited in traditional information technology (IT) career paths, mature digital-first firms would have a company-wide digital-related talent system including hiring, training and professional development.
Digital Innovation Practices
A mature digital-first firm focuses on customers as users, while a traditional firm focuses on customers as buyers. A mature digital-first firm has ongoing, co-creative and recurring engagement with users with advanced digital tools, such as platform and artificial intelligence (AI) that enable them to build new business models. A “user” implies a close relationship with continuous engagement, monitoring and updating, whereas a “buyer” implies a transactional product or service exchange. To identify the latent needs of customers as users, a mature digital-first firm uses tools, such as rapid prototyping, persona and user journey map throughout the firm.
Digital Leadership and Governance
A mature digital-first firm has a well-established company-wide governance structure that shows how different units in the organization coordinate their activities to execute a firm-wide digital strategy. In a mature digital-first firm, all leaders have digital competency and a digital-first mindset. This is a contrast to a traditional firm where only IT leaders are assumed to have digital competencies and provide digital leadership. As the firm digitally matures, the traditional firms establish a dedicated digital unit. However, in a fully mature digital-first firm, all business units are expected to be digital, with the dedicated digital unit playing highly specialized and focused roles, coordinating closely with traditional IT functions and all other business units.
To assess your organization’s digital-first readiness, ask yourself which of these statements about the people at your company is most true:
- In my organization, there is no dedicated digital leader or separate digital unit. Anything digital is either subsumed under traditional IT or informally created in functional units.
- In my organization, we have a small dedicated team with no executive-level leadership dedicated to digital innovations. The small team reports to an existing unit.
- In my organization, we have a dedicated digital unit with an executive-level leader who has digital competency and brings the digital-first mindset to the organization.
- In my organization, we have a dedicated digital unit with an executive-level leader. The dedicated digital unit leads digital innovation with other units' involvement. Multiple, but not all, executive leaders of other units have digital competencies and digital-first mindsets.
- In my organization, all executive leaders have digital competency and a digital-first mindset. All leaders understand that digital innovation is critical to their units.
Next month we will dive into the third and final installment: Digital-First Strategy: Technology Dimensions.