Strategy has always been about understanding complex markets, inspiring leadership teams to challenge internal resistance and calibrating risk while making bold choices. The supply of information is enormous, but with the help of good analytical people, you have the security to able to adjust course without departing from your strategic goals.


The Must Win Battles

Most management teams have talked in general terms about how digitization can help them assert themselves competitively and create good returns. They ask themselves if they understand the changes that are happening, who can be a threat to them and how can they actually challenge other players in our own or in other’s value chains. For most it means playing away from home, but the challenges at home are also great, and this is where McKinsey points to four fights which must be won.


  1. The Fight against ignorance
  2. The Fight against fear
  3. The Fight against guesswork
  4. The Fight against diffusion


How to fight ignorance?

To understand real threat scenarios, we have had good experiences with so-called ‘War games’ or role-playing in the management team. Here we staged how potential attackers like Amazon and Google, or for example, small “baggage-free” startup companies, will behave in the new landscape. The result is that s the old ways of thinking are challenged and an awareness that speed is of special importance is developed.

The point is to find out how to faster and more effectively invest in new digital offerings with today’s business model, as well as find new partners.


How to fight fear?

Innovation is difficult because many of your leaders can experience it as a threat to the current structure and their own future. If you want to convert to a digital business model, you must prepare the ground for the entire management team to take ownership of the change. Then they must also feel secure about their own future. Our experience is that this does not happen unless you provide the organization with the tools and a support network that makes it succeed.

Many companies focus exclusively on the digital transformation, without developing a support network around the leaders driving forward the change. Part of this is honest dialogue, and McKinsey recommends getting concerns out in the open to build awareness of how this impacts decisions and defines how leaders continue to be relevant. In a program such as this, the mindset and behavioural shifts that need to be addressed in order to emerge as good role models are discussed.

McKinsey also encourages participation in external networks, and at Knowit, we have created such a network where resource people in their organization meet customers in a venue we call Experience It. In recent years this network has visited the leading environments in the world in terms of digital transformation. Visits to New York and California have stimulated and created greater understanding for us and for many of our customer’s management teams.


How to fight guesswork?

Digital transformation often involves a leap into the unknown. For businesses that want to be first movers or follow quickly after, the reward is so significant that you are willing to change direction or change business model. And preferably faster than the competition. The need for rapid change often requires both guesswork and decisions that are not sufficiently well-explored. This creates anxiety with many business leaders.

One way to fight guesswork is to anchor your strategic decisions to a thesis about the business outcomes that different digital investments will produce. It’s not so much about traditional business modelling, but more about drawing some ground-level conclusions from large amounts of data to determine if the business logic is correct. Find out if this is sufficient to be able to invest further in the process. According to McKinsey, this increases the odds of a successful implementation; Financially and organizationally.

The conclusions must then be grounded in a digital reality. How can sensors, robots and machine learning improve productivity and security? What skills gap between management and front line workers must be overcome? How to take advantage of real-time data and the opportunities this provides to experiment? The technology gives us the ability to quickly get data driven insights into what is happening. This enables you to adjust course faster and increases chances for a successful investment.


How to fight diffusion?

Effective strategy requires focus, and throwing digital dust on existing processes hardly helps in the long run. Most businesses struggle to do two things at the same time: reconfiguring the existing business model by digitizing it, while automating some of the key elements of the existing model. Although the technology for self-driving cars is available, it’s hard to know when most people will really start using them. Precisely because it is difficult to know exactly, it is easy to come up with too many digital initiatives; often far from today’s business strategy.

Here, McKinsey have two suggestions on how to navigate. The first revolves around looking at the business as a portfolio of different initiatives in different stages. Do they need seed, nourishment and nurturing, growth or pruning? Secondly, it is important to realise that sooner or later it becomes necessary to redistribute resources and capital or to make productivity improvements and perhaps even acquisitions of other business. Successful strategies almost always rest on such moves, and they are mutually reinforcing.


The portfolio approach also enables you to respond more easily to three key questions.

  • What new digital products and services are missing from the portfolio?
  • Which parts of the existing operating model can be digitised or adjusted to improve the customer’s journey?
  • What areas should be wound up?


This systematic evaluation of opportunities across the portfolio is always an honest discussion of how and to what extent the organization's willingness to take risks needs to change.

Back to top