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Strategic thinking: Tackling the big question on why and how to define a digital strategy

9 Apr 2021

Zhou Zhou writes about framing a strategic thinking to help define a digital strategy.

Strategy can mean a lot of different things to many people. Depending on who you ask, it can be interpreted as broad or as specific as one would like. For example, if you were to ask a pure strategist, they may say that strategy is guiding light to what the future represents. If you ask a CEO of an enterprise, they may say that strategy is a set of principles on how to grow their footprint in market share. If you ask a CIO, they may say that their idea of strategy is utilising technology trends, solutions, and processes to help achieve business and customer needs.

Evidently, strategy will mean something different to everyone, depending on their interpretation and needs. Given that there is no silver bullet for “do I need a strategy and what is it”, I’m going to focus this blogpost on framing the thinking that helps define what strategy means to you. I will however flavour the article with a technology bias throughout. The bias exists because for an enterprise to realise its goals, especially with how pertinently digital our world is, they must fully utilise technology, and the traditional separation between business corporate strategy and IT strategy can no longer exist. All layers of an organisation need to frame their strategic thinking with technology in mind, to exploit digital advantages and achieve its goals.

Pyramid of Strategic Thinking (Z Zhou, Capgemini, 2021)

                                                        Pyramid of Strategic Thinking (Z Zhou, Capgemini, 2021)

Purpose and ambition

When thinking about something as broad as defining a strategy, it helps to begin from a top down view to ask some broad questions. Purpose should be the starting point that anchors other questions to follow. What is the purpose I am trying to achieve? What is the intention of my business? How is my business helping my clients now or in the future? The answers to these can be broad and generic but need to be communicated clearly. By answering these questions, it will help drive out the general direction of travel, for the scope to be narrowed down later. For example, Google’s mission statement is “to organise the world’s information and make it universally accessible and useful.” It is broad but provides the general destination of the company.

Using purpose as a baseline, the next thing to consider is the destination – the ambition. What is the goal I am trying to accomplish? What is my aspiration? I understand what I am trying to achieve, but how far can I take this? Ambition is relative to the business purpose, and it helps to be realistic. Feel free to aim as far as the stars, but it helps for ambition to be balanced between something you feel is bold yet achievable, so it is not daunting to begin taking action. By defining the ambition, it narrows the purpose down into a more concrete and truer ‘north star’.

Focus and success

Focusing on where to play your cards is crucial. Having a targeted approach means you can focus on doing work that will generate the most value, not waste time or energy. Therefore, once you have an idea of what you are aiming towards, the next thing to identify is where to spend your efforts. What products and service should I be investing my time in? What are the channels I can utilise to reach my audience? Where in the world should I be focusing on? Importantly, all these questions should be applied with a technology lens on top. What technology capabilities can I utilise to better my product and service, digitise customer channels, etc. By having a focus on what efforts to put in, it reduces unnecessary labour, ensuring work is targeted towards the right goal and direction.

We want our strategy to be successful, but it is important to evaluate and define what success look like, and how the success of a strategy can be measured. There are several metrics that one can define to help measure success ratio. For example, increase in market share percentage, or time to market and innovative service offerings against competitors. Success shouldn’t be only measured by whether you have achieved your ‘ambition statement’. It can be a fairly vague concept, therefore by breaking it into smaller measurable chunks, it helps to celebrate the small successes, taking Agile mentality we don’t want to celebrate success in a “big bang” fashion. By having some defined success metrics, it makes celebrating easier, and brings more regular positivity to the work and people.

Capabilities and change

If the previous sections have focused on the ‘what’, we now move onto the ‘how’. If I have defined the target and direction, what are the capabilities I need to deliver this? Capabilities can be broken down to people, process, and technology. On people, do I have the right workforce and skillsets? On process, is my organisation run and governed in the best way? On technology, am I utilising technology as best as I can to achieve organisational goals? If any of the three needs improving, is the best way to compensate to upskill, or to hire in, or to outsource?

Technology can really play a big part in utilising capabilities, with many examples to show Utilising AI and automation can significantly enhance workforce experience and reduce human intervention. Adopting Agile processes can make an organisation run in a much more nimble way to deliver value faster. Being on the Cloud can transform business operations. Therefore, from identifying the key capabilities that are required to help you achieve the strategic goal, to recognising the gaps from the target state and finding the best technological ways to address them, will provide a comprehensive view on the construct to deliver the ‘what’.

If all these changes are to be implemented, then an organisation needs to prepare itself to a position to deliver. Is my organisation flexible enough to welcome the changes? What is the best and least disruptive way to implement them? Is my organisation built in a way that changes can be delivered quickly to show value? Frameworks such as SAFe and ITIL help in the area, to ensure that an organisation is built to deliver fast and drive value, It is important to remember that whilst it is great to define a strategy of ‘what’ and the capabilities that sit behind the ‘how’, the organisation need to be adaptable to welcome the changes, which arguably may form the first part of the strategy. Otherwise the strategy cannot be implemented and will end up being another set of shiny Powerpoint slides that sits on the shelf collecting dust.

So, what are the actual benefits of applying this strategic thinking? I think we can agree that strategy, by definition, can be a difficult and daunting subject to tackle. It will vary from person to person, perspective to perspective. The strategic thinking helps answer two questions: do I need to evaluate my strategy, and how do I define it. By applying a structured thinking, it forces us to think about the factors that contribute to answering whether a strategy is needed, and if so, how to methodically break down the thinking to define strategy. As a result, the outcome is very clear and tangible.

The strategic thinking outlined in this blogpost is a sneak peak into the Strategic Choice Framework developed by Capgemini, an established accelerator to help business evaluate their technology strategy future. If you want to learn more about the Strategic Choice Framework, and how we can help you with your strategy definition and delivery, please get in touch with the Future of Technology team at Capgemini Invent.