Successfully implementing a business strategy is usually a lot more challenging than developing it. Advances in digital technology are frequently perceived as a “silver bullet”. However, digital can also expose a company’s inner contradictions, reveal hidden pockets of poor performance and even lead to perceived core capabilities becoming seen as critical weaknesses. What are the most common execution problems when it comes to digital, and how can they be overcome?
Turning strategy into execution is always difficult. Digital technologies can seem to solve many of these problems, providing more speed, learning opportunities and chances to pivot away from failure, but they can also amplify weaknesses. In this article, we look at common execution problems and show how they can be overcome by focusing on some fundamentals that are often neglected in the “new world” of digital.
The challenges of strategy implementation
Most executives agree that successfully implementing a business strategy is usually a lot more challenging than developing it. Unrealistic or overly academic theories, whilst persuasive on paper, can be costly in practice and all too often lead to passive resistance or even “tissue rejection” by the host organization. In these situations, advances in technology, increasingly software-related, are frequently perceived as a “silver bullet” that can ensure effective delivery of the anticipated change.
This perception has often been at the core of large-scale “legacy” Enterprise IT implementations – “Once we have implemented the single ERP1 in three years’ time, we will save X% costs and transform the company”. For example, one FMCG2 firm has been implementing its single global ERP program for nearly 20 years and still believes everything will be solved when they are finished in another five years’ time. Unfortunately, each local implementation needs to be slightly different, as the world keeps changing, and consequently the only prediction that can be realized with any certainty is the ever-rising cost of the ongoing investment. Whilst this is an extreme example and not all large-scale systems fail, multiple analyses over the last 20 years suggest very few major IT programs deliver expected outcomes, and the bigger the program, the higher the chance of failure.
In today’s world, “digital” rather than Enterprise IT is increasingly seen as the key enabler to transform the business operating model, with opportunities extending well beyond what Enterprise IT has been able to deliver. Undoubtedly, digital has huge potential: to fundamentally transform the business operating model; to unlock the “impossible challenge”; to greatly accelerate change; and to intimately connect a company to its customers in real time. For example, Netflix’s reinvention of the video-delivery model from physical post to online streaming disrupted an entire industry, including video-rental stores, movie studios and TV networks.
However, digital can also expose a company’s inner contradictions, reveal hidden pockets of poor performance and even lead to perceived core capabilities becoming seen as critical weaknesses. For example, a global publishing company is currently wrestling with the transition from supply of physical products to digital consumption and interactive customer participation, with a declining share price that suggests their transition is not keeping pace with market demands. Digital also adds more uncertainties, particularly around customer expectations, which are increasingly defined by the technologies they use in their day-to-day lives. For example, customers expect digital products always to work: issues with downtime, or being unable to use products on any device or browser, are no longer acceptable in a digitalized environment.
So whilst digital has the potential to bring huge value, it also brings more chances to fail. In our work with clients we see a number of commonly recurring pitfalls that all too often lead to failure in digital implementation:
- Specious certainty: Placing too much certainty on the capacity of new technology to deliver operating-model change; setting unrealistic expectations and outcomes and creating long-term plans that aim to deliver in the future what is actually required today; and having blind faith in immutable, up-front specifications and then failing to re-assess regularly enough whether to further invest, pivot or stop.
- Neglecting organizational alignment: Believing that a new technology system will fundamentally transform the organizational culture, behaviors and human interactions; expecting that employees will simply adapt to the system and willingly participate in the transformational journey.
- The language we use: Creating a constrained environment by using language that closes down commitment and participation (for example, saying no or shooting down ideas); generating false certainty through over-simplistic or over-deterministic metaphors; limiting ambition by adopting a narrow Weltanschauung (or world view)3 incapable of tolerating other’s perspectives.
- Underestimating behavioral issues: Customers and users interact with products and features in a variety of ways, often different to that anticipated by the designer; failing to adequately consider employees before embarking on change; misapplying or failing to appreciate behavioral levers; mismanaging employee resistance; and failing to communicate adequately, be that frequency, tone or authenticity.
Companies that are most successful in overcoming these pitfallstend to be those which don’t allow themselves to become distracted by the “digital hype” – in fact, they often find answers to these “new-world-”challenges in approaches that predate the digital revolution by many years, or even decades.