A collection of Proofs of Concept doesn’t make a Digital Strategy

I read and hear it over and over: when it comes to Digital Transformation, Smart Manufacturing or Industry 4.0, companies face an indigestion of Proofs of Concept (PoC).

Those are most often haphazard uncoordinated bottom-up initiatives, that last long without proving much. Worse, there is enough evidence that the technical solutions work and many available use cases to get inspiration from. Adding more PoCs will not help much and a collection of PoCs doesn’t make a digital strategy.

Finding a suitable problem for using an attractive tool (does not make a strategy either)

Many senior management team members and executives make the same mistake, they look at the digital toolbox and wonder what this and that tool can do for their business. This is like looking for a suitable problem in order to use an attractive tool. In Operations or IT department, the techno-enthusiasts do the same, with even more enthusiasm. Vendors eager to get a foot in the door propose to run a trial for low or no cost, pampered with a serious sounding name: Proof of Concept.

As time goes by, there is a collection of PoCs running here and there, without clear conclusion in sight, often without formal capture of new knowledge nor Proof of Value.

These companies are stuck in the “pilot purgatory” as the World Economic Forum and McKinsey put it in its white paper “Fourth Industrial Revolution Beacons of Technology and Innovation in Manufacturing”, January 2019.

I really like the purgatory metaphor, suggesting a weird situation between the promised and desired digital paradise on one side and the everyday hell on the other.

Ultimately, not much – if any – additional value is created.

What a Digital Strategy deployment should be

A Digital Strategy should be the result of a crafted Vision and a structured process to achieve it. There are many ways to get inspired about ‘digital’ and state a compelling Vision. Those may use the classic strategy tools like the SWOT matrix, Michael Porter’s five forces, benchmarking, field studies and enquiries about customers’ habits, preferences and expectations, etc.

The formalised way to analyze what is required to achieve the Digital Goal, in what order, check how the organization stands currently, communicate, align everyone onto the Goal and deploy the strategy is the use of the logic tool called the Goal Tree.

I have already posted extensively about the Goal Tree and there is even a Goal Tree Chronicles on this blog to get you familiar with it.

With the Goal Tree, the rational analysis starts at the stated Goal and lists all the prerequisites necessary to achieve it. Those so-called Necessary Conditions are structured logically and in sequence, displaying a tree-like network of Necessary Conditions .

Using this approach is pulling the needs and starting with the end (the Goal achievement) in mind. Instead of piling-up digital tools with the hope the magic will happen, it is thoroughly planning for achieving a Digital ambition.

Building the Goal Tree with the stakeholders is also bringing them together to achieve the Goal as a team. Instead of Operations rejecting IT Department proposed digital tools because they don’t fit the business, or IT opposing Operations’ pilot tests for fear of losing control and not understanding the purpose, both can bring in their expertise to define what is required to fulfil this and that Necessary Condition.

Once everything needed is listed and the assessment of current state done*, the strategy deployment can begin. The Goal Tree flipped 90 degrees right displays a high-level project Work Breakdown Structure (WBS) with the Necessary Conditions turning out as milestones and intermediate objectives**.

* for the 3-color assessment of the current situation vs the Goal Tree, follow the link to my post
** The Goal Tree was first called Intermediate Objectives Map

About the author, Chris Hohmann

About the author, Chris Hohmann

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