Walking the digital tightrope: why balancing both internal and external initiatives unleashes meaningful transformation
Digital mastery: harmonizing priorities to unlock powerful and purposeful transformation
Theodor Seuss Geisel was an American writer and illustrator, best known for authoring popular children's books under the pen name ‘Dr. Seuss’. His work includes several of the most popular children's books of all time, selling over 600 million copies by the time of his death. Among his many famous quotes was: ‘Step with care and great tact, and remember that life's a great balancing act.’ i
This could not hold more true for businesses today: while digital disruption has required organizations to keep abreast of what’s happening externally, it’s also created a need and opportunity for organizations to focus on addressing multiple initiatives internally.
Why is achieving this equilibrium so important?
Balancing the tension between what to do inside and outside the business allows you to mobilize your organization to realize necessary changes in an efficient way. Creating alignment between external opportunities and internal responses helps in ways that include behavioural and efficiency improvements, and more purposeful and tangible benefits of business transformation.
Where historically the imbalance was perhaps too internal, initial digital trends swung the pendulum to being too externally focused.
- Neither opposing focus area, in isolation, has been able to deliver the necessary value in capturing market opportunities, while mobilizing the organization to effectively respond.
- Part of this premise is that organizations must also become attuned to understanding, interpreting, and responding to their customers’ requirements. But, on the other hand, if you become too enveloped in understanding their needs, you’re unlikely to make sustainable strides towards prioritizing employees’ activities or process efficiencies.
Interestingly, our research in this area revealed that 32.3% of the responses relating to forecasted outcomes from digital transformation execution can be categorized as externally focused, whereas 67.7% of expected outcomes reside internally.
This illustrates a material disconnect between the desired ‘external’ vision when the actual effort is instead being applied to internal outcomes. It indicates a breakdown in the focus of performance indicators.
Many organizations still haven’t mastered internal or external opportunities in isolation, let alone balanced the tensions among them collectively. This opportunity cost and waste carry significant weight when organizations are under pressure to respond and transform quickly.
Prioritization is now an inherent and necessary part of doing business
Organizations already have an overwhelming number of priorities and many are constrained by limited resources, which can hamper effective execution. Indeed, our recently published NTT 2019 Digital Means Business Benchmarking Report reveals that some 22.8% of organizations’ Chief Digital Officers (CDOs) agree that a barrier impeding digital transformation success is ‘too many competing priorities’. Many businesses battle with how to balance internal or external focus, as both require significant investment, time, and effort.
In past, more predictable times, businesses were able to tolerate slower, more calculated movements and in many instances still thrive, despite numerous projects failing.
Having an imbalanced focus inside and outside the organization might not have been too problematic previously. However, within a rapidly changing context, this introduces a significant issue that organizations need to overcome. As external markets move in quick and unprecedented ways, internal resources need to be allocated more modestly to overcome constraints.
Do less while achieving more – here’s how:
One of the key tenets of digital is that your transformation should be guided externally – by truly empathizing with customers’ demands, market opportunities, and considering how your business model should adapt accordingly.
Organizations who’ve narrowed their focus too internally run the risk of isolating themselves from what the market requires. This leads to lost or misplaced investment, slow time-to-market, and stifled innovation capability.
Our research shows that:
- Over one-fifth of respondents (22.0%) say that the competitive structure of the market is being ‘highly disrupted’ by digital.
- Some 30.5% of respondents are experiencing ‘high levels’ of digital disruption in the external market and/or against customer expectations of service capabilities.
This reiterates that organizations need to align their internal prioritization with external market developments. Of course, many organizations often find it easier to look internally for improvements, especially in challenging times, when profits are under pressure and there’s a fight for increased market share or relevance.
While swift and short-term value may be realized faster from internal focus, is it the correct value? You also need to leverage this insight to inform your larger transformation plan ─ which is unlikely or impossible to be a success, in isolation of the customer.
We believe that businesses’ primary goal should be to do less but achieve more of the right things, no matter how small. This means better orchestration of internal and external priorities and avoiding the common tendency to pivot too much one way or the other.
Digital masters are those who can craft a delicate and thoughtful harmony between both.
If you’re interested in reading additional insight and analysis of this topic, download the Executive Guide to NTT 2019 Digital Means Business Benchmarking Report.
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