Why COOs should accelerate the digital journey

Many companies have already embarked on ambitious journeys to become digital organisations, developing from merely ‘doing digital’ into ‘being digital’. COOs play a major role in aligning the operating model to embrace the full spectrum of possibilities.

There is no question that in today’s digital age, the pace of disruption is only set to increase. As new technologies flourish, many COOs are facing mounting pressure to rethink not just their use of technology, but their entire operating model to keep up with competition, market forces and value chain disruptions.

In reality, every business will somehow be digital over the next decade and therefore the ongoing digital technology push will most likely continue to force COOs to better organise how they identify, test, evaluate, risk assess and scale or fail new digital technologies and make them relevant to operations.

You will probably also agree with me that when organisations embark on their digital journey, they typically pass through several phases of maturity. During the earlier phases, this mostly means focusing on ‘doing digital’ – that is leveraging digital technologies to extend existing operational capabilities, while still largely relying on traditional business, operating and talent models.

However, companies that have reached higher levels of digital maturity are more likely to be perceived as ‘being digital’. For these organisations, digital traits and a digital mindset define their outlook on operations and strategy. Rather than simply ‘doing’ digital projects, they have adopted an integrated strategy that makes them digital at the core. They are no longer just traditional organisations that ‘do’ digital projects; instead, they have altered their corporate DNA to become digital.

COOs step up in the digital economy

The best COOs today have long realised that digital DNA does not develop accidentally; it takes time, commitment, and a degree of risk appetite and leadership. Instead of trying to make quick fixes, great COOs play the long game. They imagine what kind of organisation they want to run in the future and empower their leadership to deliver on that vision.

In short, I would say that the best tech-savvy Danish and Nordic COOs are already working hard to…

• Sense the opportunities of emerging digital technologies and digital enabled business models (what is relevant and what is not).
• Build and maintain external relationships with vendors, start-ups, analysts and academia and be part of relevant ecosystems.
• Act as a thought leader while also educating their CXO colleagues on digital.
• Ensure the operating model leverages the full potential of digital while also leading the development of the digital capabilities throughout the organisation.
• Champion the process to continuously identify, test, evaluate and scale or fail new digital technologies and make them relevant to operations.

More technology on the way

The bottom line: COOs of today need to embrace digital opportunities like never before – and of course this also includes Artificial Intelligence, which is now on everyone’s lips. AI technology has been around for some years, but is maturing rapidly, which means that we are now at the stage where real opportunities for disruption and revenue generation are starting to appear at scale.

Where to go from here?

Of course, there is no ‘one size fits all’ solution when it comes to digital or AI-enabled transformation. In the market, I see many different models, some successful and some less successful. But whatever choices you make, leading tech-enabled transformation initiatives typically differs from the classic roles and responsibilities as a COO.

Here are four things that I would advise every COO to focus on to accelerate digital transformation:

1. First, organise your “Digital Disruption Radar Screen”. What I mean by this is make sure you know “what’s coming in Digital Technology”. Have at least one well-prepared bi-annual joint COO and CIO meeting in which you identify potential digital disruptive technologies, both as a potential threat as well as a potential opportunity to disrupt and grow. Also, reach out to experts and engage with academia.
   
   
2. Define your operating model by rethinking how you create more value for customers. Use digital technology as an enabler for a winning position for your company – possibly even changing the industry itself. The fundamentals of cost advantage or superior differentiation still hold true, but in the wake of digital disruption, the options for ‘how to win’ have changed. The essence of strengthening your operating model is to use a deep understanding of how digital transformation is redefining the primary drivers for competitive advantage
   
   
3. Third, organise your “Internal Digital Initiatives Radar Screen”. And by that I mean keep active tabs on all digital initiatives that are going on within your organisation both in operations as well as beyond. Be particularly aware of technology choices or IT architectural decisions that are difficult to reverse and that might limit future options or create undesirable long term digital supplier lock-in.
   
   
4. Finally, do not back down on innovative talent. Protect internal (digital) disruptive initiatives from the anti-innovation resistance that exists in most organisations and make sure that your talents can flourish on their own terms. Do this in a smart way to ensure that you take full benefit of the learning effects. Try, fail, learn, grow!

The good news: We are all learners when it comes to new tech. Like most proficiencies, becoming tech fluent is not a once-and-done matter of mastering a set of skills. Instead, it is an open-ended adventure of continuous learning even for those of us who are experienced COOs. Ultimately, digital maturity is about putting our money where our mouth is: by first imagining a digital future and then delivering on it.