Why digital transformation is necessary and how to develop and execute a successful digital transformation strategy
Even though the term 'Digital Transformation' is prevalent throughout the current business landscape, various misunderstandings and misconceptions are often attached to it. Everyone agrees that digital transformation is essential for any enterprise, but few can define what it actually means to the modern business. Digital transformation does not specifically or exclusively define the consequences of digital technology. The term refers to the fact that technology, which happens to be digital, enables people to solve their traditional problems with digital solutions. It's not to say that their problems could not be solved using the older methods, they simply prefer the new way. Digital (R)evolution: Strategies to Accelerate Business Transformation explains why digital transformation is necessary and provides a framework for executing an effective implementation strategy.
Filing a significant gap in current knowledge, this timely book helps senior executives and technology leaders create practical strategies which, when correctly applied, lead to successful digital transformation. Author Yuri Aguiar, Chief Innovation and Transformation Officer at The Ogilvy Group, shares his real-world insights on developing new, digital-based business models and internal processes. Written in clear, straightforward language, this valuable guide:
* Serves as a blueprint for successful digital transformation in any enterprise or organization
* Addresses the strategy and governance requirements of businesses regardless of industry
* Features in-depth, firsthand examples of various transformation strategies
* Explains the factors than cause strategies to succeed or fail
Digital (R)evolution: Strategies to Accelerate Business Transformation is a much-needed resource for C-suite executives, corporate board members, corporate attorneys, investors, and venture capitalists.
YURI AGUIAR is the Chief Innovation and Transformation Officer at a large multinational organization, where he helps identify and pursue frameworks for operational excellence while simplifying complex ones. Over his career, he has held several global technology executive positions, including volunteering on the advisory boards of DesignThinking@ Rutgers Center for Innovation Education and YearUp.org.
We've all heard and read that digital transformation is changing our lives. But how precisely are we being transformed? Which aspects of our lives are changing and why does digital transformation matter? Why should you read this book? More specifically, why should you read this book right now?
Digital transformation and digital disruption are urgent concerns for all of us, all over the world. Together they have become an inexorable force of nature. Even if your organization is operating smoothly and hitting its numbers today, I can guarantee you will experience transformation and disruption in the near future.
Elon Musk talks about sending people to Mars. On every imaginable level, the act of colonizing another planet would profoundly transform human culture. Yet we are already deep into the process of transforming humanity.
For the past 100 years, we have been shifting steadily from a culture based primarily on physical labor to a culture based primarily on intellectual labor. In recent decades, the shift has been accelerated by the availability of high-speed computing and broadband communications networks, and by the emergence of data science techniques that have led to the development of practical artificial intelligence.
Soon, the knowledge workers who replaced physical laborers will be at risk of being replaced by AI bots. With alarming speed, we are transitioning from a carbon-based to a silicon-based civilization. This transformation is not a trivial matter.
Definition of Work Is Changing
Within an extremely brief span of time, everything we think of as "work" will be performed by physical or digital robots (scripts) guided by artificial intelligence. Any kind of repetitive task that can be automated will be automated. For human beings, work will become a blend of complex abstract reasoning and pure creativity. In other words, people will only do work that machines are incapable of performing.
What kind of work will we do? Anything that requires creativity, imagination, tenderness, affection, empathy, or love. We will be creators, innovators, inventors, entrepreneurs, artists, poets, teachers, athletes, gamers, healers, caregivers and lifelong learners.
This is not science fiction or fanciful thinking. We're no longer on the cusp of a new era. We are experiencing the opening act of a fundamental shift. Some parts of the world will arrive at this future state sooner than others. But this is our shared destiny, and we need to prepare for it.
That's the big picture, in broad strokes. The rest of this book is about the details of getting from our present state to our digital future. This book is neither a roadmap nor a theoretical treatise. It falls somewhere in between.
I'm perturbed by pundits who make false comparisons between the digital transformation we're facing today and transformations of the past. The digital disruption I'm writing about will shake the foundations of society. It will truly rock our world and change our lives. Most of those changes will be for the better. But many of the changes will leave us feeling lost and confused.
Digital transformation will create millions of new jobs. From a global perspective, I am optimistic and enthusiastic about our future. Yet I am also a realist, and I know that transformation will eliminate jobs and disrupt the careers of people in many sectors of the global economy.
"A digital tsunami is coming," says Chetan Dube, a thought leader in artificial intelligence and the chief executive officer of IPsoft. "Overall, it's a benign tsunami. But it's like a 100-foot wall of water coming toward us. It will sweep away many of the ordinary chores and tasks we do at work. It will remove drudgery from our lives, freeing us to become our best and most creative selves. But we cannot simply sit on the beach and wait for the tsunami to hit us. We must prepare. We must move to higher ground."
Do Not Ignore the Emotional Component
Moving to higher ground requires leaving behind anything that isn't required for immediate survival. As leaders of transformation, it's our responsibility to help people overcome the emotional obstacles they will invariably face as they shed their old work habits and adopt new methods for achieving their goals in the modern workplace.
The process of moving from the familiar past into an unknown future is difficult, to say the least. Ignoring the emotional component would be a sign of poor leadership, and a clear invitation to failure.
I had a wonderful conversation with my friend and colleague, Ben Richards. Ben is the worldwide chief strategy officer at Ogilvy, and he has vast experience helping major brands that are grappling with business transformation strategies.
Here's a brief summary of what Ben told me:
There are two ways of doing transformation; one that sets you up for catastrophe and another that usually works out quite well. The first way is to sit everyone down and offer them an extraordinarily rational explanation of your transformation strategy. That approach almost always paves the road to ruin.
The second approach is explaining to people how the strategy will impact them as individuals. Tell them how it will affect their income and their career. Explain how the strategy will help them become more successful, more fulfilled, and more satisfied.
Given the choice, Ben says, he would "pick the emotional argument over the rational argument any day of the week."
He also recommends reaching out to all the stakeholders in the organization, especially those in the trenches and on the front lines. Make sure that you understand and address their fears and concerns. "You need to win the hearts and minds of your constituents," Ben says.
The last thing you need during a transformation, he says, is a dissatisfied workforce. "If you think that analysts won't call your employees and ask them off the record how the transformation is going, you are mistaken," he says.
Ben advocates in favor of an approach he calls "Platform, Program, Pulse." In this approach, a transformational strategy is divided into time horizons:
- Platform = Long Term
- Program = Medium Term
- Pulse = Short Term
It's not too different from the idea of going for quick victories while you keep your eye on the long-range goal. I also like how the Platform/Program/Pulse model gives you breathing room. Instead of attempting to do everything all at once, you establish a logical timeline for accomplishing the various parts of your transformation strategy.
I genuinely admire Ben's approach, and I urge you to keep it in mind as you move through the stages of your own transformational efforts.
Ecosystems of Disruption
It's also imperative to remember that transformation and disruption do not occur in a vacuum. At the risk of stating the obvious, everything is connected. Instead of thinking about transformation and disruption as free-standing events, I urge you to envision them as constituent parts of a much larger and continually evolving ecosystem of organizations and their stakeholders.
I found the experience of Goran Kukic, head of IT innovation at Nestlé, to be highly instructive. In a wide-ranging conversation, Kukic described how Nestlé built a specific program for dealing with the startup community, which is a prime source of disruptive innovation and transformation.
"Dealing with a startup can be exceptionally challenging," Kukic says. "You can't send a 40-page contract to a startup. They are simply not traditional companies."
Even when there are clear business reasons for collaborating, cultural mismatches between startups and traditional companies can lead to disastrous relationships. To improve the odds of success, Nestlé created a Silicon Valley Innovation Outpost to scout opportunities for collaboration and build essential relationships on the ground.
"We realized there was so much more to be learned from startups," he says. Today, Nestlé has a team of innovation managers in the San Francisco Bay area. They have become familiar faces in the startup community; they are part of the landscape.
From my perspective, Nestlé's approach is absolutely brilliant. Instead of regarding innovation, disruption, and transformation as alien or unnatural, the company sees them as natural and integral to continuing success.
Hope for the Best, Prepare for the Worst
Part of our general uneasiness about digital disruption, however, arises from our sense that it is occurring quite suddenly. In fact, it is the tail of a larger transformation that's been going on since the beginning of the twentieth century. We tend to think of the most recent advances in technology as being the most significant and the most influential, but the reality is more nuanced. Each of the previous advances was essential, and we wouldn't be where we are today without them.
Moreover, the pace of transformation has been logarithmic, not linear. Each of the five advances in computing can be rightfully considered a paradigm shift, and each advance contributed exponentially to the growth of computing power.
I mention this because it's important to dispel any notions that digital transformation is some kind of magical event or sudden break with the past. Digital transformation...