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A Strategizing Framework for the Digital Era

Hult Ashridge’s Dr Mike Cooray and UCL’s Dr Rikke Duus offer a framework for re-thinking organizational competitiveness in digital spheres



Wednesday 05 August 2020

 

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Times of significant change create ample opportunities for strategic decision makers to review and re-evaluate their organizational strategy, routes to value creation and market positioning. While organizational change may create a sense of discomfort in some, it is essential that those leading organizations into the post-Covid-19 era dare to challenge established assumptions, traditional ‘ways of doing things’ and bring on board new digital expertise and capabilities. It is positive to see how many organizations have already developed new digital capabilities during the pandemic to respond to the changing business and customer landscape and these are unlikely to return to business-as-usual. Instead, they will keep those digital practices that have been acquired to drive new value for their partners, suppliers, customers, citizens and other stakeholders.

However, not all organizations have been able to make quick transitions to ensure their continued success. With the additional stresses brought by lockdown, supply-chain upheaval, and a looming economic downturn, strategizing for a secure future has therefore become an existential priority for many. To navigate these rough seas effectively, strategic decision makers are better equipped when guided by strategizing tools and ‘lenses’ to help identify new opportunities. Dr Rikke Duus, senior faculty at University College London School of Management, and I have developed a strategizing framework to help organizations navigate and manoeuvre in what we call ‘digital spheres’. Digital spheres are characterised by the prolific use of digital technologies, integrated systems and data to drive strategic decisions, enhance operations, create new customer value and accelerate innovation. We refer to this strategizing framework as ‘TRIP’, which reflects the four strategic priorities of Transparency, Responsiveness, Intelligence and Personalisation. We have designed the TRIP framework to help organizations utilise digital technologies to re-imagine their futures, enhance their relevance and adaptability, and identify new white spaces to occupy. The framework has been used effectively with multiple client organizations from the private and public sectors as well as with Executive MBA participants.

Strategising for a secure future has therefore become an existential priority for many

The TRIP framework is a strategizing tool that creates the infrastructure for strategic decision makers to first evaluate their organization’s or business unit’s activities and performance on each of the four TRIP dimensions. This will give a here-and-now picture of the current situation and illuminate known and latent challenges that may require a strategic response. Thereafter, it is time to consider where most value can be created for customers, partners and the organization itself by enhancing selected TRIP dimensions. This visualization of the future positioning then needs to be followed up by concrete strategic actions.

Let’s now have a look at each of the four TRIP dimensions:

Transparency

Increased scrutiny from customers, business partners, regulators and the media is one reason to review business practices and proactively embrace organizational transparency. A much sharper light is now being shed on organizations that misbehave and allow unethical behaviours to take place. Consequently, new opportunities are likely to emerge as consumers and other value chain partners demand higher levels of transparency and ethical conduct. The two key areas to consider in terms of organizational transparency are: first the organization’s approach to consumer privacy and data, especially as the digital-native generation becomes increasingly cynical about business models that are driven by customer data. And secondly the adoption of sustainable and ethical business practices. Organizations that provide a clear and open view across the organization of how it operates, communicates and participates within its sector and in wider society stand to benefit.

In 2020, IKEA announced its new Data Promise, a large strategic initiative to give customers a greater level of control over the data they share with the organization in their digital interactions. This initiative, focused on transparency, is part of IKEA’s mission to “create a better everyday life for the many people”.

Responsiveness

For organizations to succeed within rapidly changing digital spheres they must be able to respond quickly to new market trends and technological advances, foresee opportunities, and be able to align the necessary competences and expertise to capitalise on those opportunities. In some extreme cases responding to change may mean fundamentally re-thinking the role and purpose of the organization.

If being responsive has been important over the past ten years, the rapid advance of AI, the Internet of Things, blockchain, quantum computing, et. al. herald an even greater need ahead. During the height of the coronavirus pandemic, organizations have been forced to find appropriate ways to respond to changes affecting their industry. In Denmark, we saw how the Danish State Railway’s (DSB) Digital Labs was fast to react when the country began its reopening and public transportation went back into action.  Through a new app, commuters were able to see in real-time the passenger density on any train, by carriage and across greater Copenhagen. They received recommendations on when to travel to avoid passenger crowds and practice social distancing. This digital service was developed and launched by DSB Digital Labs in less than 7 days to respond to an urgent societal need.

Intelligence

The key to successful engagement in digital spheres is being able to truly understand current trends and imagine, based on solid information, what is likely to happen in future as technology advances and market demands shift. Keeping up-to-date through data analysis and insight relevant to the industry and the wider ecosystem is critical.

So much is now driven by data. Machine learning, an invaluable tool for the future, depends on it—yet so much data being available can cause overload and confusion. Consequently, it is essential to stay close to the market by having ongoing dialogue with customers, to gain better insight into their changing demands and aspirations. For JCB, a British manufacturer of equipment for construction, agriculture, waste handling and demolition, the use of advanced technology and Internet of Things (IoT) infrastructure is crucial to understanding customer needs. Through the JCB Livelink digital ecosystem, JCB provides customers real-time access to a complete overview of their JCB machinery, including monitoring of machine hours, machine health and maintenance and machine location to protect against theft. This provides JCB’s customers 24/7 fleet management and enables JCB to intelligently provide customer support, access to urgent spare parts and other maintenance related services.

Personalisation

The digital age has enabled a high level of direct engagement with individual customers, bringing with it the ability to personalise communication, services and products. With enhanced manufacturing, design and logistics capabilities, personalisation has become a key source of competitive advantage and an important way to strengthen relationships with customers. The ability to personalise, especially at scale, is largely enabled by data-driven technologies that learn about behaviours and trends, allowing predictions about an individual customer’s future preferences. This does however present organizations with a major challenge, both to take responsibility for how they gain consent, gather, analyse and use individuals’ data, and in how well they protect it at a time when headline-grabbing data breaches show how even large and resourceful organizations can struggle.

In recent years, the company Stitch Fix has taken consumers by storm with its data-driven and personalised approach to fashion retailing. The company uses data science throughout the business to style customers, predict purchase behavior, forecast demand, optimize inventory, and design new fashion items. Customers provide Stitch Fix with over 90 data points through his or her style profile, including detailed style, size, fit, and price preferences, as well as unique inputs such as how often he or she dresses for certain occasions or which parts of his or her body the customer likes to flaunt or cover up. All of this data enables Stitch Fix to put their algorithms to work and match fashion items with each of their customers to provide a highly personalised experience.

Push and Pull: putting TRIP into action

When strategic decision makers use the TRIP framework to drive organizational action, we propose that they consider the embedded ‘Organizational Push’ and ‘Customer Pull’ effects. Organizational Push is enacted through Transparency and Intelligence and are driven by the organization’s own desire and aspiration to become more transparent, honest and genuine, while also enhancing its access to meaningful data, insight and know-how, i.e. Intelligence. So here, strategic decision makers should reflect on how they internally strengthen and take the lead on becoming more transparent and intelligent organizations, which can also drive new product and service development.

Customer Pull is more market and customer driven. Customer Pull is enacted through Responsiveness and Personalisation and reflects the organization’s way of meeting new customer demands and aspirations. Here, strategic decision makers should consider how digital technologies can be used to create dynamic, personalised and real-time customer engagement, utilizing advanced analytics to add value to the individual customer.

Utilizing the TRIP framework to focus on these four core dimensions will be of value to decision-makers in born-digital enterprises that are seeking to disrupt the existing competitive landscape with radical new innovations. It will be of equal or perhaps greater value to the many incumbent organizations that have struggled to bring about the digital transformation needed to adapt to new industry dynamics, technological innovations, and changing customer demands. Used effectively, the TRIP framework assists leaders and strategic decision makers in ascertaining the current performance of each TRIP dimension and in identifying how to shape, align and drive future organizational action as a result.

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Dr Mike Cooray

Dr Cooray is Professor of Strategy at Ashridge Executive Education at Hult International Business School. Mike has extensive international business experience working in the UK, Australia, South East Asia and Europe. His areas of expertise are in contemporary strategic management issues including innovation, strategic brand management and digital transformation.

Mike Cooray

Mike has designed and delivered digital futures programs for Porsche, Triumph Motorcycles and Ferrari and currently delivers several executive education and postgraduate programs with clients in Europe, UK and the Middle East. Mike is also the Academic Director for research projects on EMBA and other masters programs at Ashridge and works across Hult campuses in London, Dubai and Shanghai.

Mike has undertaken consultancy, research and management training across the world, including the US, Canada, India, Germany, Denmark, Switzerland, Sri Lanka, Vietnam and Malaysia. Prior to Ashridge, Mike was employed with organizations such as Carlsberg, Siemens and Mercedes Benz.

Dr Cooray has published his research in the Frontiers of Psychology, The European Business Review and the Journal of Marketing Education. His thought-leadership articles in the area of digital transformation, strategy and ecosystems have been published in the World Economic Forum, CNN, Discover, Newsweek, New York Times, Singularity Hub, Chartered Institute of Management, WeekendAvisen, Politiken and The Sydney Morning Herald.

Mike holds a PhD, an MBA with distinction, an MSc in Practice-based Research and a PGCE. His PhD research explored entrepreneurial business practices and innovation in dynamic organizations.

Dr Rikke Duus

Dr Rikke Duus is Senior Faculty at University College London (UCL) School of Management and a visiting professor at ETH Zurich and Copenhagen Business School. She designs and delivers cutting-edge programmes in the areas of digital marketing and digital transformation to a range of audiences, including practicing managers, across private and public organizations.

Rikke Duus

Dr Duus is an active researcher in the areas of digital transformation, digital marketing, digital value creation and human-tech hybridity. She frequently presents her research at national and international conferences and is published in The European Business Review, the Frontiers of Psychology, Journal of Marketing Education and Advances in Consumer Research.

 


Hult Ashridge Executive Education helps organizations around the world improve their leadership talent, strategic thinking and organizational culture.



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