In our last articles we have been discussing about the four steps we need to go through to be successful in this new normal:
1. Rapidly recovering revenue – Which has to do with our business models, customers, channels, and revenue streams.
2. Rebuilding operations – Which has to do with our AS-IS and TO-BE processes and the value they should deliver in terms of customer experience, employee experience and efficiency.
3. Rethinking the organization – Which has to do with the people, roles, and functions within the organization.
4. Accelerating the adoption of digital solutions – Which has to do with new technology, new knowledge, and skills to make new business models successful, to market new products and services correctly, to execute the TO-BE processes, and to accomplish success as a company and with our customers.
These are all the pieces of the puzzle that putting them together correctly and quickly will lead us to success. In the new normal we can refer to this process as Digital Business Strategy. Some might wonder: Why not an only strategy? The answer is that in this new normal that digital component is not an option and we want to make sure we do not forget it if we really want to survive and achieve sustainable success.
In this and in the next three articles, we will try to provide you with all what is needed to develop and execute a Sustainable Digital Business Strategy.
Defining digital business strategy and action.
What is a digital business? What is a winning digital business strategy? Why is it important for leaders to conceive, execute, and sustain such strategies?
A digital business operates by blending the physical and digital worlds. For example, Amazon lets consumers order products digitally; fulfills the orders physically through a network of warehouses and vehicles; and delivers after-sale service digitally.
A winning digital business strategy makes key choices that generate significant revenue growth because consumers are so eager to buy the resulting product. Some of these choices include which customer group to target, which product to sell and how high or low to set its price, which distribution channel to use, and how to perform activities such as product development, manufacturing, distribution, and sales.
The reason for this strong customer demand is that such strategies deliver a quantum value leap – where for the price they pay; the benefits and the value received is remarkably superior.
How to create this quantum value leap?
To increase your odds of success, you should brainstorm many ideas. Then, create a list and rank them, based on how well they pass these four tests:
1. What real human or business pain or problem are you reducing or eliminating?
2. Do you think you and your coworkers will feel personally passionate about reducing or eliminating that specific pain or problem? Do you really believe it?
3. Do you have the skills to solve this problem or can you create a team with the necessary skills to deliver a product or service that reduces that pain much more effectively than competitors do?
4. Is there a market (Customers) for what you are thinking? Is it easily identifiable?
The answers to these questions will give you some insights of the gap to be fulfilled. Your top-ranked ideas should be those with the smallest gap; they will become your new source for rapidly recovering revenue.
Take your top-ranked idea and build a prototype – an inexpensive and quick-to-build model that you can show to others, in order to convey the concept.
For example, if your product is an app, your prototype could be a simple PowerPoint presentation that illustrates the most important screens that a user would see when they use your app.
After developing your prototype, get feedback from at least 10 current or potential customers. Ask them:
· Would you buy this product or acquire this service?
· What do you LIKE about the product or service?
· What do you NOT like about the product or service?
· What important features are missing?
Same questions are also applicable for a new business model. Record your findings carefully, you will use them later!
Spend some time thinking about what you know now. Then consider answering and reflexing about the following questions:
· Is your company a digital business?
· If so, which parts of the operation are digital, and which are physical?
· How fast is your company growing compared to its industry average?
· If it is growing faster than the industry average, how does its digital strategy contribute to its faster growth?
· If your company is growing more slowly than its industry, think about the digital strategies of other companies you may be familiar with. How do their digital strategies contribute to their faster growth?
· How could your company apply the lessons from these companies?
· Did the feedback you got from customers convince you that you should pursue the idea? If so, why? If not, why not?
If you followed the whole process, then by now you should have a good foundation to start focusing on how to articulate a winning digital business strategy.
We will keep learning in the next article!
RECOMMENDED TOOLS TO DEFINE A DIGITAL BUSINESS STRATEGY AND ACTION:
1. Brainstorm – To produce ideas and ways of solving problems.
2. Prioritization matrix.
3. Template to brainstorm and rank ideas.
4. Template for building a prototype.
5. Reflection notebook.
6. Agile operation model gap analysis.
7. Value Builder – To develop a viable business.
8. Business Model Canvas – To explore new ways of making money or implement your new business idea.
9. Thinking Hats – To test the attractiveness of your product, service, or idea.
