Developing Metacapabilities for a Digital World

“Digitalization brings down the entry barriers and leads to hyper-turbulent business environments in most sectors,” explains Prof. Káganer of IESE’s Department of Information Systems | Illustration: Norman Gracia

“Digitalization brings down the entry barriers and leads to hyper-turbulent business environments in most sectors,” explains Prof. Káganer of IESE’s Department of Information Systems | Illustration: Norman Gracia

Digital transformation has opened up a floodgate of possibilities for global businesses, allowing them to boost efficiency, leverage new opportunities, expand their market reach and better meet consumer needs. To exploit its potential for competitive advantage, however, firms need to integrate digital as a core component of their corporate strategy.

While industries will be forced to develop unique, sector-specific capabilities to stay competitive, IESE Professor Evgeny Káganer has also observed a series of metacapabilities that are critical to long-term corporate success.

“Digitalization brings down the entry barriers and leads to hyper-turbulent business environments in most sectors,” explains Prof. Káganer of the school’s Department of Information Systems. “To adapt to this new context, organizations need to continually renew their business models, and this requires developing organizational capabilities that are common across all industries.”

In his research with global firms, Prof. Káganer has identified six metacapabilities that range from the need to become “customer-obsessed” to adopting a culture of on-going learning and testing:

  1. Outside-in thinking
    Gone are the days when companies had the luxury of offering a product and pushing it onto customers. Firms today need to thoroughly understand their customers’ needs and the contexts in which they are embedded.
  2. Data enrichment
    In days gone by, the attitude toward data was “keep it safe and under wraps.” No longer. Data assets can be invaluable sources of knowledge development, whether they are gathered from A/B testing or customer information. Employees across the organization – not just data scientists – need to stay attuned to data-leveraging opportunities to enhance decision making and corporate actions.
  3. Learning orientation
    Digital business strategies and organizational goals should be clearly linked to enable firms to develop new knowledge that answers important questions and reduces uncertainty. This approach may entail prototyping to test hypotheses, allowing metrics to emerge with experience and allocating resources to initiatives whose end benefits are not clear-cut.
  4. Agile execution
    Scrum-based projects and flexible systems with constant feedback loops are essential to adapt in times of flux. Firms can gain positive momentum by breaking processes down into smaller cycles and integrating new learnings into future phases.
  5. Cross-silo collaboration
    Companies generate vast pools of knowledge yet organizational silos can prevent them from fully exploiting them. To gain an edge in today’s digitalized markets, companies should empower autonomous cross-functional teams and horizontal communities of practice.
  6. Ecosystem partnering
    Beyond the organizational realm, companies need to build ties with a wider community, engaging partners that can bridge value proposition gaps or fill resources that are lacking in-house.

Digital Mindset: How to Innovate and Lead Your Business for the Future helps senior executives pinpoint the core capabilities critical to their firm’s long-term success in a digital context, as well as a framework to develop them. The next edition will be held on May 28-30, 2019 on IESE’s Barcelona campus.

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