How to tell a compelling digital transformation story that boosts your share price
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Digital startup companies achieve extraordinary valuations in part by knowing how to tell a compelling story, crafting an exciting vision of their future that sends investors and analysts scrambling to jump on board. Established companies embarked on their own digital journeys can capture some of that same magic by learning how to tell their transformation stories in more powerful ways.
Step 1: Establish a shared language for digital transformation
A major key to success is having a shared, common language for thinking and talking about digital transformation. Such a language can help people across your enterprise view digital transformation in a more strategic and comprehensive way, instead of fixating on individual technologies and tactical implementation issues. Also, a shared language can help people in different roles and silos collaborate more effectively when planning and executing your digital transformation effort.
We recommend a digital transformation language built around five key imperatives:
- Experiences. Using digital technology to create better experiences for customers, employees, and other key stakeholders.
- Insights. Using digital technology to generate new, actionable insights and activities that create business value and improve competitiveness, whether customer data that enhances user experiences, business intelligence that allows for more actionable decision-making, or automation.
- Platforms. Establishing digital platforms that enable information to flow more efficiently and effectively across the organization and throughout the entire ecosystem. Improved platforms enhance experiences, insights, and connectivity by optimizing how information is stored, processed, and shared.
- Connectivity. Using the latest communications technologies to better network, enable, and improve the flow of information across people, platforms, and ecosystems.
- Integrity. Building trust and integrity through improved data security/privacy, operational resilience, corporate responsibility, and ethics.
These five imperatives provide a common vocabulary and framework that can help your company tell its digital story in a more compelling way, highlighting the business value that is being created and how all the various business and technology elements fit together to form a cohesive strategy. (Figure 1). The resulting story will make it easier for investors and analysts to envision what your business will look like in the future (post-transformation)—and value it accordingly.
Figure 1: Business strategy and technology elements often associated with each imperative
Deloitte
Step 2: Take a holistic, integrated view of business strategy, technology, and operations
Drilling deeper into the five imperatives, there are three key questions to consider when developing your digital strategy and story:
- What strategic business goals are you trying to achieve?
- What technologies are required to support those business goals?
- How will your operations and workforce be affected?
Imagine you’ve been tasked with developing an integrated business and technology strategy for a smart factory. Start by assessing your overall enterprise objectives and strategic business goals. For example, are you trying to move from traditional mass production to flexible, small-batch manufacturing that enables flexibility and personalization without sacrificing efficiency? Next, consider how each of the five imperatives aligns to those business goals. What customer experience are you trying to deliver? What insights will be needed? What platforms and connectivity will be required? And how will you ensure the requisite trust and integrity? Finally, think about the two-way impacts on your operations and workforce—not only how digital transformation will affect your organization, but also how your organization’s existing capabilities will help or hinder the transformation process, and what actions you can take to boost the chances of success.
This is very different from the standard approach to technology implementation, which tends to focus narrowly on a single technology and the detailed challenges of getting it up and running while paying less attention to broader business and workforce issues and strategic integration.
Step 3: Use the language of digital transformation to tell your digital story
The five-imperatives framework is very useful for a company just getting started with its digital strategy and story. However, it is equally useful for a company already embarked on its digital journey. Wherever your organization is on the digital transformation continuum, the five imperatives framework can help you refine your strategy and craft a more compelling digital story. For example, it can help:
- Optimize one imperative across multiple domains (business, technology, and workforce/operations).
- Integrate multiple imperatives into a cohesive strategy for one domain
- Integrate multiple imperatives across multiple domains
Each of these scenarios presents unique challenges; however, they can all be analyzed and discussed more effectively in the context of the five imperatives.
Step 4: Measure the full value of digital transformation
Ultimately, a compelling digital transformation story is about value creation. You need to understand the full value your current digital portfolio is delivering across the enterprise (thinking beyond traditional value measures). You can then use that broader understanding of value to estimate potential returns on your future digital investments.
Of course, given all the variables at play, calculating the full value of a digital portfolio is anything but simple. Your organization might already be capable of assessing tangible factors such as reliability, scalability, flexibility, extensibility, and security. But what about intangibles such as increased employee engagement, improved collaboration between divisions, or enhanced customer perceptions?
There will never be a simple formula showing that X dollars invested in digital will yield Y returns. However, Deloitte is currently examining the relationship between digital ambitions, digital bets, and digital returns. Our goal is to make invisible digital value more visible, arming business leaders with the insights they need to make bolder digital investments that yield exponential rewards.
A compelling digital transformation story that shows how digital investments will affect nearly all aspects of your business can get people thinking more holistically about the impact of digital technology across the enterprise. It can also boost confidence that major investments in digital transformation will deliver major returns in the future.
Getting your company the valuation it deserves
Start-up companies generate enviable market caps based substantially on their future vision and story (often with only a hint of real-world results to back up their claims). As the leader of an established company with real revenue and earnings—and a proven track record of success—shouldn’t you be able to craft a story at least as compelling as theirs?
Using a digital transformation language based on the five imperatives can help your company get the valuation it deserves—potentially increasing your share price even before your digital transformation efforts start having a quantifiable impact on your day-to-day results.
