Managers are increasingly nervous about the lack of progress in their digital initiatives. Too often, organizations merely add digital “pixie dust” to traditional processes or engage in a frenzy of digital experiments and ventures. Rather than drive competitive advantage, these efforts leave companies more vulnerable.

In the first in our series of publications on digital strategy (see “The Double Game of Digital Strategy,” BCG article, October 2015), we laid out an approach—based on making simultaneous long- and short-term moves—to setting strategic priorities in a climate of digital uncertainty. Here we explain how companies across industries can systematically pursue those priorities.

Mapping The Action Space

Digital technologies and approaches are infusing all aspects of the business world. The Internet of Things, ubiquitous connectivity, big data and advanced analytics, the cloud, cognitive computing and artificial intelligence, robotics, and 3D printing are deeply altering nearly all industries. “Mobile first” and social media strategies are essential for success in consumer industries. “Digital twins”—virtual models of physical things that are used to simulate production and maintenance and to provide training—and augmented reality are reshaping the industrial environment.

To create business value, companies can operate in an action space consisting of six interdependent layers.

• Defining the strategy focuses on building competitive advantage in the double game. It provides insight into short-term “no regrets” moves as well as more-transformative plays. These decisions establish the path for the other five layers.
• Reshaping the customer experience explores how to eliminate pain points and how to surprise customers with new levels and forms of service today while achieving quantum improvements in customer experience tomorrow.
• Reimagining offerings and business models prepares companies to create novel products and services, often by exploiting new data and powerful analytics.
• Reengineering business processes entails adopting flexible and intuitive digital technologies to simplify processes and increase efficiency.
• Building capabilities, often by working with outside partners and creating new platforms, enables companies to develop new ways of working, new business models, and other building blocks of digital transformation.
• Accelerating the transformation involves devising new approaches to speed up learning, ramp-ups, and transformational plays.