Business strategy considers three core questions – where to play, how to win, and what is our business model. While digital strategy does not change the questions, it can generate quite different answers.
This is becoming apparent in the next wave of digital innovation, which is going beyond channel strategy (how organisations interface with customers) to reinvent the enterprise.
The emerging wave of innovation is based on reinventing:
1. what ‘job‘ you are doing
2. who are the customers that require that job to be done
3. how is it delivered, and
4. what is the business model
As organisations progress past the first stages of their digital journey, they typically discover the traditional value chain is hindering further progress. This is not a problem with the value chain itself, but the fact that most companies have hard-coded the industrial value chain into functional divisions.
These divisions – sales, marketing, product, operations, channels, customer service – report to different senior managers making digital innovation, which cuts across functional boundaries, more difficult.
An alternative operating model starts from looking at how strategy cascades into capabilities (the grey boxes), and then re-examining the company’s operating model.
p.s. learn more about the ‘jobs to be done’ approach in this terrific interview with Karen Dillon, co-author with Clayton Christensen: