Without digital fitness, startups and enterprises may fail to innovate
It is well known that innovation is the most critical element for business success. This is because innovation ensures resilience and, above all, agility to meet the ever-changing market conditions.
However, what is new territory for many entrepreneurs is that innovation is more than ever directly related to a company’s ability to make the most out of available digital tools.
At the CCE conference this past month, Sanjib Sahoo (Executive Vice President and Global Chief Digital Officer at Ingram Micro) reminded entrepreneurs of the importance of analyzing their digital fitness – the ability to use digital tools for developing customer-centric solutions – at every step of their company’s growth. But for most founders, this is easier said than done.
“Digital fitness requires a lifestyle change, just like physical fitness,” Sanjib explained.
“You don’t go from being overweight to running 10 miles the next day, but you must constantly improve your fitness. The same is true for startups and their mission to survive and thrive. So instead of talking about digital transformation, companies should first figure out if they are actually digitally fit and then set up a program for incremental change”.
Let’s delve deeper into Digital Fitness and learn what steps startups and SMEs must take to remain innovative.
The key steps to achieving digital fitness
Digital fitness, in its simplest form, is how startups, SMEs, and large enterprises successfully implement digital transformation and meet the needs of their customers with the help of digital tools. Digital fitness is, therefore, a strategic endeavor and the fuel for all future innovation.
Sanjib described four critical steps companies must take to become digitally fit.
- Digital mindset and spirit. Startups learn to work towards performing and transforming simultaneously. This step requires a company-wide culture and attitude change to become digitally fit.
- Challenge and opportunity planning. Digital transformation doesn’t happen overnight. It’s a gradual process that must become habitual. It is also embedded into the broader industry ecosystem rather than an action in isolation.
- Optimized operational architecture. Organizations must respond to change and work seamlessly with cloud-based ERP and CRM technologies.
- A system of governance. Startups and SMEs need to connect both value and technology to understand better what creates value in the organization and what doesn’t.
In addition, to remain digitally fit in the long term, founders need to learn how to understand the market from all angles.
“Imagine you’re a doctor operating on a patient and say, ‘the operation was successful, but the patient died.” For that reason, basing strategic decisions on research insights and statistical evidence is key to achieving better digital fitness.
A data-driven approach will positively impact the decision-making that determines an organization’s well-being. Here, the use of new technologies for data processing is extremely important to promote digital fitness. AI helps tremendously to reduce redundancies and improve the efficiency of workflows and decisions.
However, it is not just the use of these technologies but the actual incorporation of the data into new strategies that make all the difference. If your data shows new trends, you need to analyze these deeply and be ready to adopt your business practices and sales strategies accordingly.
Why digital fitness requires slow but constant change
Having a digital spirit means embracing change. In his talk, Sanjib reaffirmed that startups and SMEs shouldn’t refrain from taking risks.
Most organizations, whether they are a Fortune 500 or a Techstars-backed portfolio company, tend to focus on the 40% chance of failure rather than embracing the 60% chance of success. Turning the tables and taking risks more often will help keep innovation afloat and help startup founders gain valuable experience evaluating opportunities and challenges.
Sanjib has identified a significant trend in digital adoption – startups aren’t waiting two to three years to launch their products in the market anymore. As a result, the go-to-market time has decreased significantly, which isn’t always good news.
“After condensing ten years of transformation into two during the pandemic, the idea that time is about speed has been crystalized for both private and public organizations,” he explained.
Expecting to create the next breakthrough product, entrepreneurs focus entirely on product development. However, Sanjib discussed that a fast-paced, product-centric mindset doesn’t allow startups to deliver the value their customers expect.
Digital fitness, which is much healthier for the business, is guided by a customer-centric philosophy. This, in return, requires incremental engagement, iteration, and progress. A slow process allows for handling and incorporating customer inquiries, feedback, and interactions into product development. It also enables you to gradually bring about changes that will make your business stand out from the crowd and deliver a cutting-edge customer experience.
The main goal of digital fitness is to optimize the speed of decision-making and see how constant it is. By driving positive change daily and focusing on customer and product engagement, companies are empowered to innovate while focusing on value creation.
Featured photo of Sanjib Sahoo
This article includes a client of an Espacio portfolio company