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Succeed at digitisation by treating it as an emergency

Stephen Chambers

Treat digitisation as a crisis that’s happening right now by taking the sort of decisive action normally reserved for emergencies.

By the mid 2000s German book retailer Thalia was already under threat from Amazon. Rather than wait for disaster to strike, company CEO Michael Busch took bold action. Working with partners from across the publishing industry, he rolled out multiple innovations at speed. In 2013, Thalia beat Amazon for market share in Germany.

If you wait for digitisation to disrupt your markets, you’ve already left it too late. You need to act now and act decisively. Writing for McKinsey Insights, Arun Arora, Michael Becker, Markus Simon and Florian Wunderlich say, on average, today’s firms are only 40% digitised. There’s a lot more change to come, and you need to structure your business to make digitisation possible.


1) Build a digital hub – make it the epicentre of organisational change.

2) Create a new digital business outside the company – and leverage core skills when needed.

3) Acquire a successful digital business – and appropriate its technology and skills base.

4) Establish multidisciplinary teams – across business functions to deliver digitisation.

5) Create “lighthouse” digital transformations – by fully digitising selected core functions, you precipitate change in other parts of the business.


Make structural changes work for you by following a process toward digital transformation:

1) Think big. Digitisation is disruptive – your path to transformation needs to be too. Ditch incremental change in favour of making big changes across the whole organisation.

Rather than testing new products and processes to perfection, institute multiple changes to see what works. Expect a 3 – 5:1 failure ratio, take the revenue hit and move on. And remember, transformation relies on momentum, so make sure you have plenty of new ideas in the pipeline.

2) Inject talent. Bring in a CDO (chief digital officer) with the right digital skill set – analytics, cloud, cybersecurity – who will also transform the culture of your organisation. You’re looking for someone who will change the way you measure and reward performance, who knows how to harness the influencers in an organisation, and who’ll apply their expertise to help you change the way you work.

Your new CDO needs visibility, budget and decision-making power – your job is to make her accountable. Measure her by her results – the new revenue streams she generates.

3) Make multiple changes. You don’t have time to wait for incremental changes to filter through. Invest in multiple digital initiatives right across the business, and make the process manageable by introducing the appropriate software tools to allow you and your new CDO to track changes in depth, removing roadblocks when they happen.

4) Install a change-control team. Create a monitoring team which works under the direction of the CDO, and keeps tabs on in-progress experiments. Monitors meet weekly or even daily to plan and coordinate digital projects, promoting and allocating more funds to those that are going well, cancelling failures before they go too far.

5) Create a change narrative. Show leadership by stating what you want to happen. Promote similar clarity across the organisation by making all managers say what they expect from their subordinates. To buy into the change process, people need to know what it means for them, what the incentives are, and what opportunities it might bring.

The digital economy has no room for complacency. Sustain the transformation mindset by developing better market intelligence gathering, investing in better analytics, and by continuing to use cross-functional teams to develop and test new ideas.


By adopting a crisis management approach to digitisation, you can make sure your business survives and thrives in the digital era.

Source Article: Turnaround Artists: How Companies Can Catch Up To The Digital Revolution
Author(s): Arun Arora, Michael Becker, Markus Simon, and Florian Wunderlich
Publisher: McKinsey Insights