Digital disruptions have become a major force and organizations have responded with significant investments in digital transformation. However, most of the digital transformation efforts have been a mix of new technologies, a few new, informal projects, and random acts of digital enablement. In short, they suffer from poor governance. Companies fail in providing proper structure, digital project governance, finding alignments between business processes, and assigning ownership to change efforts.
A well-governed program must satisfy the stakeholders across the organization and be flexible enough to accommodate multiple initiatives ensuring strategic alignment and rigidity are achieved. Traditional governance relies upon compliance and risk mitigation whereas digital governance prioritizes active enablement over control. The executive's role is to remove the blockers and help teams by rapid decision making and removing impediments.
Centralize information about digital initiatives
Few digital leaders have a complete idea of the organizations' digital initiatives. Executives often see fragmented digital plans with varying levels of ownership and responsibility.
It is important to take an inventory of all digital initiatives and emphasize it is for having a central repository of digital initiatives and to control them. Adopting a collaborative approach that focuses on building trust and culture of information sharing would provide a good foundation for key governance actions.
As the digital maturity grows move to decentralized governance
Most organizations have a dedicated centralized digital group. There is a widespread agreement that a central team should initiate the digital transformation initiatives but ultimately it should be decentralized and the local units should be empowered.
Decentralize ideation and centralize evaluation and prioritization.
Organizations use different processes to identify and evaluate ideas. To get all the employees to participate it is better to allow every employee to come up with ideas, discuss it locally, get feedback and votes from other employees. this would help in reducing the distance between the person initiating and the person evaluating and bring the innovation process more participative.
Once the idea passes a certain minimum benchmark, a central committee evaluates the proposal against the priorities set.
Make sure KPIs are set to measure the real impact of the initiative.
Establishing KPI is critical, as they are highly dependent on the digital strategic priorities related to the company's future vision, success, and implementation. many companies depend upon generic success measures like adoption rates of digital tools but fail to measure the real impact generated.
Digital initiatives are taken to create an impact in a specific dimension like revenDigital leaders should clearly identify the desired results and closely monitor appropriate KPIs.
Avoid standalone solution bay ensuring data compatibility and continuous integration with existing systems.
One important principle of digital governance is that the new initiatives are integrated with the existing systems and capabilities and having a standardized approach to infrastructure. Digital initiative is an end-to-end process closed interlinked with the existing back-end processes and systems.
Implement a system that values the potential for each initiative
Once the digital initiate and the governance structure is in place it is necessary to map them into relevant categories. this can be done by assessing the initiatives along two dimensions - value potential and feasibility.
- Value potential: This refers to the value at stake and opportunity loss of failing to pursue the initiative.
- Feasibility: this refers to the ability of the organization to successfully execute the same based on ease of implementation, context, capabilities, and organization structure.
This leads to 4 possibilities
- Quick wins: High feasibility initiatives with a relatively low value. These bring immediate gains but little lasting impact.
- Kill Zone: Initiatives that are difficult to implement and have low value. These initiatives should be removed.
- Moonshots: These are initiatives that have low feasibility but high-value potential.these are initiatives that seek to explore new, trending, potentially disruptive technologies.
- Enterprise anchors & Ventures.: The most attractive initiative with high feasibility and high-value potential. Enterprise anchors seek to create change to the current business at scale and require major cross-enterprise collaboration. Ventures refer to leveraging digital technologies outside the organization using new channels and partners.
This way the executives can focus on the initiatives that align with the strategic initiative and design a governance choice based on the evaluation.
Evaluate different scenarios to steward initiatives to full-scale impact.
Digital initiative types are not static. The transitions should be managed in a way that is consistent with the organizational strategy while providing enough resources to maximize its potential. Formulating these methods will help companies take control of transformation.
Digital leaders should work actively to remove potential obstacles. Make sure that there are no barriers to limit an initiative's growth. Instead of pushing the initiatives, the leaders should focus on creating a pull effect from the organization. One way would be to work with a small number of business units and generate the results to demonstrate the value of the initiative.
Digital executives should dynamically design and govern their portfolios. There is no single governance structure that works in all situations. By following the above principles they can increase the success of the outcomes.
7 Key Principles to Govern Digital Initiatives
Nikolaus Obwegeser, Tomoko Yokoi, Michael Wade, and Tom Voskes • MITSMR April 01, 2020
Comments
Post a Comment