Don’t Reengineer. Reimagine.

Jeff Schumacher, Simon MacGibbon, and Sean Collins in Strategy + Business: “What does it mean to become digital? Companies in all industries are building online businesses, enabling new customer experiences, experimenting with “big data,” and seeking advantage in a digitally enabled business environment. They have tried reengineering their practices; they have set up new technological platforms for customer engagement and back-office efficiency. But these efforts have not yet had the impact that they should. Instead of reengineering, they need reimagining. They need to conceive of their business freshly, in line with the capabilities that digital and business technologies can give them, connecting to customers in ways that have not been possible before….
The third principle of digitization involves taking the long view, even as you build for today. You can no longer succeed with a digital strategy based only on today’s technology and competitive environment. Nor is it enough to merely ideate about future developments. Companies must take actions now that prepare them for the disruptive opportunities and evolving platforms of the next few years. What technologies might be available then? How will customers be using digital in their lives? Where will your industry be, for example, in terms of responsive use of data, digital fabrication (parts and devices made on the fly), cloud-based interoperability, or new forms of supply chain coordination? Do you have the capabilities now to make use of those technologies in creating new customer experiences? And what new capabilities will you need once those technologies become reality?…
The fourth principle recognizes that becoming digital isn’t just a matter of rearranging the lines and boxes on your org chart. It involves fostering a startup’s way of working through new structures and teams, and changing your incentives, rules, and decision rights accordingly. Just as important as these formal mechanisms are their informal counterparts—the personal networks, communities of interest, information flows, and behavioral norms—that link the people in your company who can imagine and build new digital capabilities.”