Digital Seizing Capabilities
Introduction
After sensing opportunities, firms need seizing capabilities to act on them effectively, avoiding common pitfalls and embracing experimentation with new models and technologies.
Definition and Importance of Digital Seizing
Digital seizing capabilities are essential to address opportunities or neutralize threats.
They enable firms to experiment with decentralized boundaries, digital platforms, and new business models, while also avoiding hubris, deception, bias, and delusion. Seizing is an experimental capability that supports action and commitment, using techniques like rapid prototyping and real options logic to balance risk and reward effectively. New digital technologies, such as cloud computing and social media, are changing the nature of seizing capabilities by potentially shortening new product launches, maximizing customer centricity, and enabling rapid scaling at negligible cost.
Sub-capabilities of Digital Seizing
Digital seizing capabilities consist of sub-capabilities relating to:
- Strategic agility: The capacity of an organization to efficiently and effectively redeploy resources to high-yield activities as circumstances change.
- Rapid prototyping: Quickly developing and testing new products or services to respond to opportunities.
- Balancing digital portfolios: Managing a range of digital initiatives and investments.
Overcoming Inertia and Agility
Established companies often struggle to invest in new opportunities due to path dependencies, preferring incremental improvements over radical, competency-destroying innovations.
To overcome this inertia, established companies are experimenting with agility, a methodology originally from software development. Agility involves using IT infrastructures to build capabilities like customer agility (co-creating user experiences), partnering agility (orchestrating external partners), and operational agility (achieving speed, accuracy, and cost efficiency) to enhance financial performance. However, successfully implementing agile methods often requires a deeper and broader digital transformation, as incumbent projects can be ineffective if leaders don’t understand the conditions for agile success. Flexible sourcing, organizational slack, and open innovation processes are ways to enhance agility.