Digital transformation doing

Digital transformation is not necessarily about technology. It is first and foremost about culture and strategy. It is about finding and implementing new business models that are made possible with the development of technologies. In digital transformations, technologies should always be regarded as a means to an end and never as a goal in themselves.

Existing processes exist to answer old problems. If you want to bring something new, you may need to forget something old. It is not about inventing something new, but about how you use something that already exists to improve old processes. Digital transformation is about perceiving how companies do things and try to do them a lot better. Looking at digital innovation in retrospect, they often make perfect sense, yet to be able to foresight them is actually really complicated.

## The why

Before even thinking about "how" or "what" a company should do to transform itself, they must think about the "why". Before starting any transformation, it is needed to build a burning platform, establish why there is a need to change in the first place. Here, we can use the strategic sweet spot canvas to help identify where a company should go. We want to look at what the market is asking, what are the competitors offering and finally what can set the company apart. We want to find a spot where the company can be but not its competitors.
Now that the company understands why it should change, we can move the process of digital transformation per se. The process is divided into 3 stages the visionneering, the engineering, and the commandeering. Each step will be further detailed below.

## The visioneering

The visioneering must answer 2 fundamental questions: what is the DNA of the company and where the company wants to go.

### The soul of a company

Now that the company has a burning platform, it must understand where are its strengths. What is its soul, what is inside its DNA. Using the value discipline framework, we can determine what is the company leadership. It can be product leadership, process leadership, or customer leadership. A successful company usually has at least one leadership, some have two, and only a handful have the 3 (like Toyota).

### The goal of a company

To identify and help a company articulate its goal regarding digital transformation, we can use the 4Ps of innovation. This framework helps a company decide if it should focus on new products, new processes, new positions, or new paradigms. For each of these categories, the innovation process can be incremental or radical. Same as with the previous framework, it is better to focus on only one P at a time as combining several can dramatically increase complexity.

## The Engineering

We know why the company needs to go and where it needs to go. Now we can look at what to do. For the engineering part, we will try to comprehend what will be the role of technology and which one to adopt.
The role of new technologies

### The role of technologies

Asking the question of the role of technologies is a way to understand how important the chosen technology is going to be for the future of the company. We are going to use yet another framework based on two axes: the strategic importance of the required technology and the operational importance of the required technology. Put differently, do the company needs this technology for its future and does it need to work without failure.
This framework is here to help us understand what kind of technologies the company needs to invest in and how relevant it is going to be. For example, if the operational importance is low, a company can to invest in experimental technologies, if failure is not an option, you need to invest in proven concepts.

### Big MACS or SMACI

See SMACI for more information.
It is finally time for the company to use all the information collected so far to decide on what of the Big MACS/SMACI to invest. As a reminder, the acronyms stand for Big Data, Mobil, Analytics, Cloud, IOT, and Social. Same as before, the project difficulty rises with the number of different technologies involved. As a company, you want to use all relevant technologies but only the relevant ones.
This part is where the realm of possibility open. No technology is out of reach and no solutions are to far stretch to be implemented.

## Commandeering

We know why the company needs to change, what it needs to do and how to get there. Yet no big-scale change can be done alone, the next step will be about getting the support and the buy-in from the rest of the organization. The company should first look at the scale of the change and then craft a compelling message to share the goals with the organization.

### Understanding the scale

For this part of the project, it is recommended to use theinnovation strategy framework. It gave us a good understanding of what a change means for a company and, therefore, how complex will it be to implement.

It is important to note that the framework is always relative to one specific company. What is disruptive for one can be routine for another.

### Getting buy-in

This is the last but most important part. As we know, implementation is key to every project. A good idea badly implemented will give disappointing results. On the opposite, a bad idea perfectly implemented (corrected on the go) can end up being a good surprise. A lot can be said about how to effectively convince people, for this section we will focus on 3 key points: the brain, the heart, and the body. A powerful metaphor is to picture someone riding an elephant. The rider is the logical part of your brain, it makes the calculation and provides the vision. The elephant represents the emotional side of the brain. It is the one doing the leg work, it provides the power to the idea. You need both sides to move an idea. If we have a disagreement, you can trust the elephant to go the way it wants. Therefore the logic has to convince the emotions, it cannot force them.

* **The brain:** Focus on the logical side of the brain. People will need to understand why they will do what they will have to do. Why it is worth the effort. A goal and an explanation of how to get there are needed.
* **The heart:** Appeal to the emotion of the persons. It may be requiered to create an identity, a compelling vision, explaining how it will feel when people will reach the goal. It may also be needed to change how people view themself (Fake it till you make it). Allowing for small steps can improve efficiency.
* **The body:** The body will need a path to reach the vision, the easier the better. Removing obstacles and shortening the distance as much as possible is a good way to improve the process. It can be worth creating new habits as well as peer groups.

## Measuring success

A goal that cannot be measured is not a valid goal. The same goes for digital transformations. We need to be able to monitor how well our innovation is performing. It is not necessarily about looking for new metrics but looking differently at old ones. Using ROII, you can breakdown your innovation cycle in different stages and have specific metrics for each stage.

### How to really Measure a Company's Innovation Prowess

The article suggests using ROII: Return on Innovation Investment by dividing the profit or cash generated by new products and divide it by the cumulative investment needed to get there. But this number can be hiding the truth.

We can further divide it into 3:

1. Innovation magnitude: Financial contribution / successful ideas
2. Innovation success rate: Successful ideas / Total ideas explored
3. Investment efficiency: ideas explored / capital and operational investment.

This breakdown highlight the trade-off and possible compensations. It can also be used to find strategies that are more or less suitable for different industries or contexts.

## The pitfalls, what make digital transformations fail

They are 3 main reasons why digital transformations fail:

* **Lack of motivation**, failing to build the case and to create a burning platform can impeach the send of emergency to arise. The result is a lack of sense of emergency and of implication and motivation during the implementation.
* **Lack of funding,** digital transformations can be expensive but running short of money can stop the project immediately.
* **Limitation of IT,** money is not the only concern, falling short in terms of tools or skills can also hinder the rest of the project development.

## Example of digital transformations

Creating a platform that creates value for customers and users. Using an app to connect taxis users and taxis drivers can create value for both sides. On the user side, you get to know where is your taxis, how long it will take to get to you, when you will arrive and how much it will cost. All from your phone. As a taxis driver, you can access data on the money you made that day, the fuel you used, your driving time, etc.

### Digital Twins

You have an object that is not easily accessible and you have a digital twin made thanks to IoT. It creates a visual model that matches the real one like a ship or a space object. It is used to make remote maintenance and diagnostic for example.

This is an expensive technology that requires complex math. It is useful when you need real-time action.