Labs and centers of excellence are just part of a multi-pronged approach.

Last week, I argued that the creation of centralized labs or centers of excellence was not only a way to bring scarce digital and analytics talent into a highly productive “hot-house” environment, but also a way to kick-start the infusion of digital culture throughout the company.

A digital culture is based on the concept of flexibility and customer responsiveness, and also of leveraging the company’s full resources. It’s no mistake that digital transformation aims to create a common platform for the whole company, and big-data analytics aims to consolidate all the company’s information into a single store to develop insights that address customer needs, not the company’s internal organogram.

Thus the creation of group-wide digital platforms or components by the lab or center of excellence can act as a potent spur to the development of a true cross-functional vision and, over time, culture. Similarly, the establishment of platforms for listening to social media across various countries will drive the same mindset—it’s ultimately all about aligning with the needs of the customer, not an individual business unit.

Some companies, in my experience, are creating academies attached to their central labs or centers of excellence. By imparting these new skills to staff across the organization, the new way of looking at things—or the digital corporate culture—is defined and spread. What this does is create a network of trained ambassadors or evangelists.

Another strategy is to partner with start-ups and innovative technology firms to detect emerging trends early on. Collaborations of this kind are often exciting and create a sense of “buzz” within the company, further catalyzing change. One prime recent example is the partnership agreement between AXA and Facebook to foster social media culture particularly within AXA’s distribution networks.

At the practical level, a key way to make the change take root is to make its benefits obvious. One way of doing this, I believe, is to use artificial intelligence and data visualization tools to make the new insights easy to obtain and act on. This can be done through dashboard-style tools that become part of a manager’s workflow. When it helps executives make better decisions more easily, the digital culture will spread like wildfire.

Finally, there are the more formal, organizational initiatives that need to be put in motion, such as innovation budgets and road maps, key performance indicators, common frameworks and the like. Many companies are appointing chief digital officers to drive these initiatives.

2 responses:

  1. There are some excellent points made in the article which lead to strong ROI. In my experience the ROI’s can be well north of 200%. There are as you say a number of cultural challenges. The scarcity of resources across three domains: technology skills, analytics/mathematical skills and business skills need to be staffed, and then the right culture established for collaboration. Agile methods with 3-4 week cycles need to be instituted. The customers of the initiative, may they be internal or external, need to be engaged with lean start up approaches and design thinking approaches that are becoming more frequently used. Curiosity needs to be encouraged and fail or pivot thinking embedded. In short, a large change to the prevalent approaches.

  2. Approaching changes needed in Strategy, Business Models and Operating Models to comply with expectations of consumers and business partners in a digital age is indeed requiring a change management approach

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