How Digitally Fluent Are You?
A quick assessment for individuals, teams and organizations
Digital fluency is the combination of thinking and skills necessary to create value with digital technologies.
Most approaches to 'going digital' focus on only one or two elements of the larger equation of digital fluency. Maybe you'll start with finding out what tools are available, or get a briefing on terminology. But learning a few phrases in a foreign language while you are away on vacation is not the same as being able to have a conversation or lead the 'disruptive' movements so many clamor for.
Answer the following questions from whatever context you like. You might answer from your own experience as an individual, the digital environment of your team or department, or your organization as a whole.
Organizations at the 1X scale have very little digital leverage. In other words, if they use digital tools, it is only as a substitute for things that were previously done through analog tools. For example, the use of fax machines instead of the postal system is a 1X strategy—while it increases speed a bit, it is still essentially a channel for moving static documents from a sender to a recipient. It's faster and more convenient but it's not enough to create a competitive advantage or transform your business.
Examples:
At the 2X scale of digital fluency, organizations will use digitized versions of analog systems (like spreadsheets or PDFs of scanned paper documents) to increase data integrity, searchability and speed. They may have significant leverage over their fully-analog counterparts, but they aren't creating new value with digital tools. In these organizations, digital technologies are used mostly to streamline analog operations.
Digital organizations that are operating at 3-4X have achieved some network effects inside their organization through the pervasive use of digital technologies. They are starting to produce digital value at scale, through interconnected systems with live data and teams who understand data-centric products and services. While direct revenue is coming from digital offerings or products, the mindset for operations and value exchange still comes from an analog business model. At this stage, applied digital thinking may begin to cause exponential results—but only in specific parts of the business—and digital initiatives have to overcome significant analog inertia to achieve any scale.
Organizations at the 5-7X scale have reached a critical mass of digital fluency. A substantial amount of their revenue can be attributed to digital products or marketplaces, and the lowest common denominator of digital fluency is high enough that digital value can be created with relative ease across the organization. The location of employees, customers and partners becomes less relevant as advanced technologies enable remote collaboration and decision-making. Value is co-created by many people inside and outside the company. Externally, these organizations may be perceived as software companies—though there may be significant 'growing pains' or controversy about that.
Example:
A company that's reached this level of digital fluency may look more like science fiction than business as usual. They leverage conversational digital colleagues, strong AI programs, and highly-predictive approaches to value creation which are still quite rare. This all requires significant investment to conceive of, build and make sustainable—but it also often creates a major "first to market" advantage. It's very hard to catch up with a company on an exponential curve.
Everyone in an 8-10X company is a technologist of some kind or another, even if they don't have a digitally-focused job. Employees, customers and partners all contribute to technology planning and development, bridging the distance between users and designers.
These companies have 'software-defined everything.' For example, nearly all value created by Google is a function of software. Even the hardware they create is valuable primarily because of the applications and algorithms which define how the hardware works, and new features can be downloaded as an update. Software-defined value is a hallmark of digital companies, because it enables razor-thin margins for competitive cost advantages, rapid scaling and pivots based on prediction models.