McKinsey: When digital strategies fail
McKinsey has provided quite a piece of intelligence in order to point out what can make digital strategies fail. It has been written by some Jacques Bughin (Brussels office), Tanguy Catlin (Boston office), Martin Hirt (Greater China office), Paul Willmott (London office). They highlight 5 pitfalls large companies and corporate groups should avoid. Here’s the list below and some comments to Keep It Simple Stupid, as I’m sure consultants still like to use old-fashioned expressions to try to prove they are still hands-on and in the know-how.
Mckinsey’s list of pitfalls, and some tiny little comments:
#1 “fuzzy definitions” of what Digital stands for: data have a pivotal role in the digital strategies and executives would struggle to align their business with their digital strategies if they keep on forgetting this. <== do understand they want you to know that they have invested large amounts of cash in Data Management teams and software, thus they need you to pay for it at an even higher price though the cost for the very same outcome can be slashed by 5 to 10 if you know who to work with (see below) #2 "misunderstanding the economics of digital": the key pillars of the traditional business have collapsed with new business and distribution models that new companies are better at delivering, so you should learn this new lesson quickly in order to fix the situation <== so very true, but so very challenging to change your own mindset that you may need to rely on a change management champion who understands and lives by the new economics pillars to help the company move on into the new world #3 "Overlooking ecosystems: your company won't be able to be standalone company facing the market by itself but would be part of a business ecosystem where they would need more and more partnerships <== this one is quite unexpected as your business would still be living as part of a large organism where you need to identify what is your reason to be and how you would collaborate with others to thrive and prevent your direct competition to replace you #4 "Overindexing on the usual suspect": beware the companies you don't usually identify as your competition, because they may be so and outcompete you since you don't look at them <== business as usual, still very true as you really need to not underestimate competitors who are moving awkwardly through investing in and building tech software because that means you are missing something here #5 Missing the duality of digital: the "big bet" or the "incremental improvement" critical paths are the main options that are available for your business to evolve at the digital age <== it would definitely depend on your entrepreneurship style, indeed These 5 pitfalls are all true and still need to be shared from time to time to prevent key people in any organizations to go frenzy or rogue as their anxiety goes over the roof due to a competitor walking the "digital" path. Still, there are ways that are less "smarter than smart" when you are talking about digital strategies and how to create safeguards for your business to survive tomorrow: #1 Digital isn't a strategy, digital strategy doesn't mean anything but a buzzword: get over it and move on #2 Digital provides you with more data than you need to, focus on the key ones that tells you whether you are moving your business needle: don't overkill and focus on how fast your stock is moving to the final destination, the rest is only noise from suppliers and contractors #3 Digital is broken and you won't find anything to repair it, so deal with it: digital software and tools are by essence not finished and polished as they are the embodiment of a new world to explore and investigate, thus whatever you are building in the digital space isn't bulletproof and you need to be happy if it works and focus on what's key for your business (clue: check for #4) #4 Digital will change in a few months so build an organization that enables the changes: spend cash on building a versatile organization that includes IT/ people/ process/ management as you are skillfully doing with your financial structure, because from time to time you would need to change a piece of that system and you don't want to pay for a full change because you were lazy enough to listen to a supplier that told you it was the "ultimate solution that does everything and anything you need" #5 Don't bother building too much, work with suppliers to provide you their intelligence and their agility: your agility isn't about how you deal with the change but how your suppliers deal with the changes in their business, as your issues would only come from their ability to adapt to the customers behaviors Basically, if you want to play it like a startup, focus on two things: (1) build a solid product/ service that solves one and only one problem and (2) ship it to your customers. The rest would always be in movement, change, and evolve so you don't need to focus on it as it is not a variable you own or can manage, only undergo. They don't give a damn about Digital. They give a damn about business.