Strategy and Governance: What is a Digital-First Operating Model?

It’s all about value!

Digital Transformation

Why focus on Operating Models?

Breakdown silos

Digital Business Optimization or Digital Business Transformation?

  1. Top-down mandate
    Signaling change and a willingness to reinvent themselves. The leadership team provides the confidence to experiment while at the same time reallocating resources from ‘running the business’ or ‘scaling the business’ to ‘transforming the business’.
  2. Bottom-up approach
    Rapid execution of Lean digital initiatives. Avoiding the long drawn-out and multi-year initiatives typical in enterprise that depletes the energy of teams and delays the realization of results, and more importantly, learnings. Integral to organizational readiness and change management when initiatives are ready to scale enterprise-wide. A bottom-up approach counters the overly rigid and often slow top-down approach.
  3. Cross-functional teams
    Multidisciplinary teams working with autonomy across organizational boundaries. Value creation within an organization crosses multiple business units, as do the processes and policies that support them. So must our digital initiatives have representation across the organization. Focus on realizing key business outcomes and new capabilities.

Scaling across the enterprise

  1. People
    The people in your organization (your employees) are the ones that create value and deliver upon your business model. Seek to enable them through digital tools, Lean / Agile frameworks, and the necessary data to accelerate value creation. The added benefit here is that happy and productive employees are recognized by your customers who in turn provide profits that you can invest back into your employees. This virtuous cycle is the true test of your company’s culture and operating model.
  2. Process
    As you introduce new digital tools and frameworks, you must adjust your processes so that your employees may move at the new pace afforded by digital. As your organization embraces digital and becomes more adaptive, so too must your processes. Seek to eliminate rigid workflows and command and control models for ones that recognize experience, new learnings and changing user expectations.
  3. Policies
    Your people and processes are governed by the policies that are part of your operating model. These too must change in order to meet the realities of a digital-first organization. Seek to implement a new set of policies that encourage experimentation and small bets that may or may not always succeed. The budgeting process, metrics and how you evaluate resource allocation must be revisited as part of the process.
  4. Platforms
    Digital platforms are what enable you to scale. Small Proof of Concepts (POCs) grow into enterprise platforms rapidly in digital-first organizations. Self-service platforms enable innovation and further remove blockers to efficiency and decision making. A personalized platform economy within your enterprise is the foundation of a truly Digital First Operating model.

Budgeting for Outcomes

Digital-First Operating Model in Summary

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