7 Traits of effective digital enterprises

In a recent McKinsey article, authors Tunde Olanrewaju, Kate Smaje, and Paul Willmott highlighted how to stay competitive, companies should stop experimenting with digital and commit to transforming themselves into full digital businesses.

They pointed out seven traits that all successful digital enterprises share and we’d like to share them with you today:

Trait #1: Be unreasonably aspirational

Leadership teams must be prepared to think quite differently about how a digital business operates. Digital leaders set aspirations that, on the surface, seem unreasonable. Being “unreasonable” is a way to jar an organisation into seeing digital as a business that creates value, not as a channel that drives activities.

Trait #2:  Acquire capabilities

The skills required for digital transformation probably can’t be groomed entirely from within. Leadership teams must be realistic about the collective ability of their existing workforce. Leading companies frequently look to other industries to attract digital talent, because they understand that emphasising skills over experience when hiring new talent is vital to success, at least in the early stages of transformation.

Trait #3:  ‘Ring fence’ and cultivate talent

A bank or retailer that acquires a five-person mobile-development firm and places it in the middle of its existing web operations is more likely to lose the team than to assimilate it. Digital talent must be nurtured differently, with its own working patterns, sandbox, and tools.

Trait #4: Challenge everything

The leaders of incumbent companies must aggressively challenge the status quo rather than accepting historical norms. Look at how everything is done, including the products and services you offer and the market segments you address, and ask “Why?” Assume there is an unknown start-up asking the exact same question as it plots to disrupt your business.

Trait #5: Be quick and data driven

Rapid decision making is critical in a dynamic digital environment. Twelve-month product-release cycles are a relic. Organisations need to move to a cycle of continuous delivery and improvement, adopting methods such as agile development and “live beta,” supported by big data analytics, to increase the pace of innovation. Continuous improvement requires continuous experimentation, along with a process for quickly responding to bits of information.

Trait #6: Follow the money

Many organisations focus their digital investments on customer-facing solutions. But they can extract just as much value, if not more, from investing in back-office functions that drive operational efficiencies. A digital transformation is more than just finding new revenue streams; it’s also about creating value by reducing the costs of doing business.

Trait #7: Be obsessed with the customer

Rising customer expectations continue to push businesses to improve the customer experience across all channels. Excellence in one channel is no longer sufficient; customers expect the same frictionless experience in a retail store as they do when shopping online, and vice versa.

It’s clear that leaders of successful digital businesses know it’s not enough to develop just one or two of these traits. The real innovators will learn to excel at all seven of them. Doing so requires a radically different mind-set and operating approach. This is why on the 26 and 27th of August 2015, Knowledge Resources will be hosting a Digital Business Models at the Hyatt Regency Hotel, Rosebank in Johannesburg. To hear from top companies like Uber Johannesburg & Durban, eNCA Online Division, Discovery Health and GM – contact Katlego Tshetlo +27 (11) 706 6009 or katlego@knowres.co.za for more information.

About the authors:

Tunde Olanrewaju and Kate Smaje are principals in McKinsey’s London office, where Paul Willmott is a director.


2011 Customer Experience Impact Report: Getting to the Heart of the Consumer and Brand Relationship, Oracle, 2012, oracle.com.





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