Digital Transformation

A leader’s Playbook for digital transformation

Distilled the practices from DM to help you steer the course of this complex journey

• Framing the digital challenge

• Focusing investment

• Mobilizing the organization

• Sustaining the transition

The digital transformation compass• Framing the digital challenge:

– Build awareness of digital opportunity and threats

– Know your starting point and access your maturity

– Craft a vision and aligned top team around it

• Focusing investment:– Translate your vision into actionable roadmap

– Build your Governance structure

– Fund the transformation

• Mobilizing the organization:– Send your unambiguous signals about your ambitions

– Build momentum and engage the work force

– Set new behaviors and start evolving toward a innovative culture

• Sustaining the transition:– Build the necessary foundation skills

– Align reward structures to overcome traditional org.

– Monitor and measure the progress of the transformation and iterate when necessary

The digital transformation compass

Build Awareness

Measure monitor,

and iterate

Sustain

Mobilize Focus

Frame

Align incentives

and rewards

Build foundation

skills

Set new behaviors and evolve culture

Earn the right to engage Signal

your ambitions

Fund the

transformation

Build your governance

Translate your vision into action

Craft a vision and align top

team

Know your starting point

The digital transformation Compass

Framing the digital challenge

Build Awareness

Craft a vision and align top team

Know your starting pointSustaining

the digital transition

Mobilizing the organization

Focusing investment

Are you aware of the digital challenge?• Put Digital Transformation at the top of your agenda

– Ask: how it potentially disrupt our competitive position

– how can they help to improve customer delight

• Understand the scale and pace of the Digital Impact– Finding the right tempo

– Digital innovation often comes outside your industry

• Make the awareness Process Experimental– Digital hackathon: Pairing

– Intense digital immersion

• Build a coalition of Believers– Core team around a common purpose

Do you understand your starting point How digitally mature is your organization today?

What strategic asset will be relevant to them?

• Asses your digital mastery: digital strengths and weakness in Digital Capability and Digital Leadership

• Chart your transformation journey

• Assess your strategic assets: identify which assets will make it successful {Physical (banks), competencies, intangible(brand equity, culture, patents, proprietary technology) and data (Caesars, Barclays Bank))}

• Challenge your business model: DYOB (Destroy Your Own Business) WWAD (What Would Amazon Do?)

Is your Top team aligned around a shared Digital Vision

• Your vision needs to recognize where you are starting from, your existing competency and culture

• Design your vision with a clear intent - a picture of what needs to change – and clear business outcome

• Focus on your business, customer not the technology

• Align your top team

– How do you know when your team is truly aligned?

– Team sense the urgency of transformation, understand their strategic assets, can articulate how digital future look like.

Focusing investment

Translate your vision into action

Fund the

transformation

Build your governance

Sustaining the digital transition



Have you translated your vision into action?• 1st : translate your vision into strategic goals that

point to what an achieved vision would look like.

• 2nd: build a roadmap of initiatives – that starts guiding the organization toward the vision

• Articulate top-level goals only

– By 2016, two thirds of our customer contacts will come from digital channels

– Digital sales will represent 60% of our total revenue in four years

Build a roadmap for your digital journey• Find your entry point: start by building roadmap that

leverages existing assets and capabilities.

• Engage practitioners early in the design

• Design for Business outcome , not technology

• Think a series of sprints, not marathon – keep people committed to the end goal, but pace of your initiatives as short sprints of effort.

• Put dollar signs on your journey - Clearly link changes in your roadmap to tangible benefits

Have you chosen the right governance model?

• No single governance model is right for every company

• Digital governance focuses on two clear goals – coordination and sharing

• 1st: Ask yourself - What resources should we be sharing or coordinating across groups (technology platform, talent, data etc.)

• 2nd : question to ask – What initiatives should be shared or coordinated across company (single social media strategy for all products or allow each brand design its own)

Plan to evolve your governance model • No governance model is right forever

• Pay attention to the negative consequence of your governance model (small units getting attention, process are too bureaucratic, decentralized approach preventing you from sharing)

• Think about a digital leader and governance, full time CDO to drive change in culture

• No governance model is perfect, all need tuning

Funding models for your transformation

Four broad types of digital investments:

• Foundation investments (invested in a global content management platform to unify between diverse business units)

• Maintenance investments (keep the business running or minimizing risk - upgrading website, funding security application)

• ROI driven investment (Project based, KPI improvements and ROI target)

• Early-stage innovation investment ( fund incubators, digital labs, research partnerships or specific experiment)

Exploit various funding mechanism

Three basic models:

• Central investment (fund your innovation – such as seed funds or incubators)

• Local investments (specific parts of the business, Ex: e-Commerce application for one of your brand)

• Partner-supported investment ( One of your partner is launching new technologies, you can act as a showcase pilot for their marketing in exchange for a substantially reduced investment)


Signal your ambitions

Earn the rightto engage

Set new behaviors and evolve culture



Focusing Investment

Are you signaling your ambitions effectively?

• Need to become the marketing manager for your transformation ambition

• Send signals - some are metric driven, 30% to 80% business online

• Explain benefits clearly - what is for me? Example: mobile operator redefined its vision

• Use all available communication channels – video, social network, webcast, intranet etc.

Have you earned the right to engage?

• Encourage the leadership of the company to become role models – walk the talk

• Co-design a detailed implementation plan of the transformation. With employees co-create entire digital roadmap

• Identify and engage early the true believers, those transformation champions who are willing to take risk.

• Find early quick wins

Are you setting new behaviors for the organization?

• Make visible changes to work practices –

– fight against org fragmentation and silo based thinking

– transparence, process standardization, operation efficiency

• Encourage adoption, not deployment

• Learn to fail (Intel – I took a risk, it failed, and I learned something and applied it)

• Institutionalize new work practice


Build foundation skills

Align incentivesand rewards

Measuremonitor,and iterate


Focusing Investment


Are you building foundational capabilities?• Orchestrate your skills build up: understand what your

skill gaps is – approaches - hiring, training, partnering, acquiring, or incubating

• Hiring: Innovate in your recruitment strategy- all channels, Cast your net wide for rare skills.

• Training: Increase your digital awareness, bring employees up to speed in the specific digital technologies, organize employee exchange programs, introduce reverse mentoring

• Partnering – when lacking critical skills, Acquiring – small companies on talent, Incubating – invest in agile start-ups

Are your reward structure aligned to your transformation goals?

• Start at the top: A collective top team incentive - based on your success and progress – a good way to facilitate alignment

• Smooth end-to-end operation: challenge-integrating online and offline channels- Walmart defined new incentives

• Make sure the rewards are more than financials: Such as status, reputation, recognition and privileges are great motivation to reach your transformation goals.

• Extended reward structures beyond your corporate boundary – beyond your corporate boundary to suppliers, partners, and even customers

Are your measuring and monitoring your digital progress?

• You can not manage what you can not measure

• Managing your strategic scorecard – score card should provide the basic template for your entire transformation effort.

• Drive incentive-level business case and related KPI – clear business case act as a great motivator, the key is to choose the KPI that are critical to transformation objectives.

• Connect top-down and initiative level measures – business leaders have visibility of the business impact

• Develop an iterative review process – correct your course when necessary

Technology: The endless agitator of the Business World

• Technology is reaching into every corner of the business world.

• Its role in the business world will not only continue but will accelerate exponentially

• Over time it will create a playing field with new winners and losers

Leading digital is a job for now

Thank you

Digital Transformation

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