Three key questions to evaluate your Digital Strategy

The first question for defining a digital strategy is to clearly understand the organization’s performance goals in both the short and long term. Is your company focused on enhancing internal efficiency, or does it aim to set new standards in the market and outpace competitors?

Goals for absolute performance, such as improving operational efficiency or customer satisfaction, focus on internal improvement. Toyota, for instance, has used digital technologies like the Internet of Things (IoT) and artificial intelligence in its production lines to improve precision and reduce costs, aiming to reach internal milestones without fully disrupting the market.

On the other hand, goals for relative performance focus on outperforming competitors by creating new industry standards. Netflix, for example, shifted from being a DVD rental service to a streaming giant, redefining how consumers experience entertainment and surpassing competitors like Blockbuster. Although this shift required significant investment, the disruptive model allowed Netflix to capture a large market share, significantly outperforming its competitors.

While a disruptive approach can be rewarding in the long term, it may come with high risks. However, if the focus is on stability and efficiency, an adaptive digital strategy might be more suitable.