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When it comes to powerful storytelling in advertising, few stages are as prominent as the Olympics. Brands like Nike and Coca-Cola have long understood the value of emotional connection during such high-stakes global events. But as we’ve seen in recent Olympics, the way emotions are used in advertising can be the difference between just grabbing attention and truly moving people to action.
Take Nike’s “Winning Isn’t for Everyone” ad, for instance. At first glance, it seems like a perfect match for the Olympic spirit with its portrayal of athletes driven by a relentless, almost ruthless ambition. However, there’s a catch. The ad starts with a provocative question: “Am I a bad person?” and then goes on to link greatness with traits like deception, obsession, and a lack of empathy. On paper, this fierce drive looks compelling, but it misses the mark in some key ways.
The problem lies in the ad’s portrayal of greatness. By associating success with negative traits like ruthlessness and a lack of compassion, it creates a misleading picture. True greatness, whether in sports or any other field, is not about trampling over others or losing one’s humanity. It’s about fierce determination balanced with respect for others and a strong sense of personal integrity.
Nike's intention might have been to highlight the relentless drive required to achieve greatness, but the execution fails to address the importance of maintaining a balance between ambition and ethical conduct. Great athletes are known for their dedication and intense focus, but they also understand the significance of compassion, respect, and a well-rounded approach to success. The best athletes manage to channel their drive without compromising their core values or well-being.
In stark contrast, Coca-Cola’s “It’s Magic When the World Comes Together” ad excels by weaving a story of unity and upliftment around South African swimmer Tatjana Schoenmaker. Rather than simply showcasing competition, this ad evokes hope, redemption, and togetherness—emotions that connect on a deeply personal level. This approach not only engaged audiences but also fostered a strong emotional connection with the brand. It shows that empathy and shared human experiences can be as powerful as intensity and competition.
So, what can brands learn from these two contrasting approaches? The key takeaway is that while competition is a powerful theme, how it’s presented can make a huge difference. Nike’s ad had intensity but lacked the emotional depth needed to create a lasting impact. Coca-Cola, on the other hand, reminded us that the most memorable ads are those that go beyond competition and touch on universal human experiences.
As we look forward to future Olympic advertising, there’s an opportunity for brands to not only celebrate the triumphs of competition but also to explore the softer, more relatable sides of these stories. Whether through humor, hope, or the simple act of coming together, the ads that leave a lasting impression are those that connect with us on a human level.
In the end, the most effective creative work doesn’t just tell us who won—it shows us why it matters. And that’s a lesson worth remembering, not just for the Olympics, but for all brand storytelling.
In the dynamic landscape of the digital economy, businesses increasingly recognize the need for digital transformation to remain competitive and meet ever-changing customer expectations. However, the road to digital transformation is full of challenges. We have been told many times that starting this process without a clear digital strategy can result in misaligned processes, untargeted use of resources, missed opportunities, and high failure rates. A strong digital strategy not only provides a roadmap for organizations but also develops a vision plan for digital transformation that aligns with the organization's overall goals. This ensures that all digital initiatives are targeted and deliver results.
According to the teleological doctrine, every object has its purpose - "telos" - the fulfillment of which determines its success, effectiveness, and significance. Applying Aristotle's concept of telos to the context of digital transformation means recognizing the importance of foresight in digital strategy development. This approach encourages organizations to anticipate future trends, technological advancements, and assess emerging market dynamics. This proactive stance allows them to strategically position themselves in the digital landscape, fostering resilience and adaptability in the face of uncertainty.
By adapting teleological principles to their digital strategy, organizations cultivate clarity and confidence in their transformation journey. They have the ability to make informed decisions, prioritize initiatives, and mobilize resources to succeed in the digital age. This philosophical foundation not only sets the strategic direction of the organization but also enables alignment of digital transformation goals with overall business objectives and ensures concerted action at all levels of the organization.
Thus, based on Aristotle's concept of telos, the essence of digital strategy goes beyond operational planning. It is a transformational effort that aligns the overall purpose of the organization with the goals of digital initiatives. That is, the digital strategy should be developed taking into account a clear vision of the desired future state of the organization. This approach helps organizations envision a future where digital capabilities not only improve operational efficiency but also create a significant impact in a rapidly changing digital ecosystem.
Assessing the digital landscape through market and competitor analysis is crucial to transforming a philosophical vision into an actionable strategy. This involves conducting market analysis to identify trends, consumer behavior, and competitor strategies. Noise Analysis is a valuable tool that provides a structured framework for identifying competitive advantages and areas for improvement.
By utilizing NOISE analysis, organizations can identify both internal and external factors that can influence their digital strategy. This approach focuses on needs, opportunities, improvements, strengths, and exceptions, allowing organizations to comprehensively assess their current state and identify actionable steps to capitalize on areas for improvement and strengths. This holistic view ensures that digital strategies align with real-world conditions and organizational capabilities, enabling targeted and effective initiatives.
The advantages of noise analysis include:
- Comprehensive overview of the business: It offers a 360-degree view, leveraging strengths to address immediate needs, improvements, and opportunities.
- Accurate prioritization of tasks: Identifying potential opportunities alongside urgent needs helps strategically allocate resources such as time, budget, and team members.
- Identification of competitive advantages: Recognizing what sets a company apart from its competitors helps capitalize on unique strengths.
- Increased efficiency: Comprehensive analytics uncover potential bottlenecks, enabling proactive strategies rather than reactive solutions.
Following a thorough understanding of the digital landscape, organizations can then develop detailed action plans to implement their digital strategy. These plans define the initiatives, projects, technologies, timelines, and milestones necessary to achieve strategic goals. Strategic planning methodologies like Hoshin Kanri ensure alignment between strategic goals and operational performance at all levels of the organization, promoting consistency and efficiency in digital transformation efforts.
The Hoshin Kanri model, also known as Policy Deployment, is a strategic planning process that aims to systematically implement and operationalize an organization's goals at all levels. This model harmonizes strategic goals with day-to-day operations by establishing clear goals, developing actionable plans to achieve them, and continuously revising and refining those plans. By adopting the Hoshin Kanri approach, organizations can consistently align their digital transformation initiatives with long-term strategic goals, facilitating coordinated action and efficient use of resources.
(Akao, 1991)[1]
Building a successful digital transformation requires a highly skilled and diverse team. This team should include digital leaders, digital transformation managers, IT experts, data analysts, and change managers, all bringing specialized expertise. The collaboration between these different roles is crucial for the strategic planning and execution of digital initiatives.
To assemble a team with these skills, organizations can adopt a resource-based approach (RBV). The RBV approach emphasizes the importance of leveraging unique skills and capabilities within an organization to gain a competitive advantage. By focusing on internal resources that are valuable, rare, inimitable, and non-substitutable (VRIN), organizations can establish a strong foundation for digital transformation.
(Barney, 2011)[2]
Utilizing the RBV approach allows organizations to strategically build a digital team that can effectively seize opportunities. This approach ensures that the team is not only capable of implementing digital strategies, but also sustaining them in the long run. The integration of diverse skills and perspectives fosters innovation, operational excellence, and continuous improvement.
In the digital age, a successful digital strategy relies on the integration of advanced technologies. These innovations are not only crucial for enhancing operational efficiency, but also for enabling personalized customer interactions and fostering innovation.
Therefore, technologies play a crucial role in the process of digital transformation. By analyzing vast amounts of data, organizations can make data-driven strategic decisions. This includes understanding consumer behavior, optimizing the supply chain, predicting market trends, and improving product development. As a result, organizations can identify opportunities and challenges early on and respond swiftly and effectively.
Automation and intelligent systems are revolutionizing the business landscape by simplifying complex processes, empowering decision-making, and driving innovation. These systems can analyze patterns, make predictions, and offer recommendations, significantly enhancing efficiency and accuracy across various business functions.
The concept of technological determinism highlights the transformative impact of technological advancements on business operations and strategic outcomes. It suggests that technological progress shapes societal structures and cultural values, leading to change that is often beyond the control of individual organizations. In the context of digital strategy, this means that adopting and integrating advanced technologies can modernize business processes, create new business models, and alter competitive dynamics
(Orlikowski, 2008)[3]
By embracing technological determinism, organizations recognize that technology is more than just a tool; it is a catalyst for transformation. This perspective encourages businesses to proactively adopt technology and constantly explore new developments to stay ahead of the game. It also emphasizes the need for a strategic approach to technology implementation, ensuring that technology investments align with overall business goals and deliver measurable results.
Agility refers to an organization's ability to quickly respond to unforeseen challenges and seize new opportunities. Taking this approach ensures that the digital strategy remains relevant and effective in the face of changing market dynamics, technological advancements, and competitive pressures
(Rigby, 2018)[4]
Continuous improvement is the foundation of an effective digital strategy. Regularly measuring digital initiatives against key performance indicators allows organizations to refine strategies, strengthen processes, and achieve better results. This approach, based on the Kaizen philosophy, promotes continuous improvement and innovation in products, services, and operations (Imai, 2012)[5]
Kaizen, which means "continuous improvement" in Japanese, is a philosophy that focuses on making small, incremental changes to increase efficiency and quality. In digital strategy, applying Kaizen principles means regularly reviewing and refining digital initiatives to ensure they align with organizational goals and market conditions. Such a focus on continuous improvement helps foster a culture of innovation and excellence that leads to long-term success in digital transformation efforts.
Implementing digital initiatives is a critical step in digital strategy. It not only boosts stakeholder engagement, but also establishes a strong foundation for long-term success. However, sustaining momentum beyond the implementation phase necessitates continuous innovation, evolution, and expansion of digital capabilities. This ensures that each subsequent phase of digital transformation delivers even greater value and impact.
Essentially, a well-crafted digital strategy serves as the foundation of an effective digital transformation. By seamlessly integrating market and competitor analysis, strategic planning, technology innovation, agility, and continuous improvement, organizations can effectively navigate the complex digital landscape. Utilizing comprehensive digital readiness assessments as a diagnostic tool ensures that an organization remains agile, responsive, and prepared to tackle future digital challenges and capitalize on emerging opportunities.
This comprehensive approach not only facilitates the achievement of transformational objectives but also establishes a solid groundwork for sustainable growth and competitiveness in the digital era. By adhering to these principles, a business can chart the appropriate course, attain long-term success, and position itself as an industry leader.
[1] Akao, Y. (1991). Hoshin Kanri: Policy Deployment for Successful TQM. Productivity Press.
[2] Barney, J. B., Ketchen, D. J., & Wright, M. (2011). The Future of Resource-Based Theory: Revitalization or Decline? Journal of Management, 37(5), 1299-1315.
[3] rlikowski, W. J., & Scott, S. V. (2008). Sociomateriality: Challenging the Separation of Technology, Work and Organization. The Academy of Management Annals, 2(1), 433-474.
[4] Rigby, D. K., Sutherland, J., & Noble, A. (2018). Agile at Scale. Harvard Business Review, 96(3), 88-96.
[5] Imai, M. (2012). Gemba Kaizen: A Commonsense Approach to a Continuous Improvement Strategy. McGraw Hill Professional.
"Better three hours too soon than a minute too late." - William Shakespeare
Thinkers in literature and philosophy have long pondered the importance of seizing the right moment. From the Stoic reflections of Seneca to the existential philosophy of Jean-Paul Sartre, the question of when to act has preoccupied thinkers for centuries. In today's rapidly changing business landscape, where every moment holds the potential for opportunity or stagnation, Shakespeare's timeless phrase takes on added meaning, especially when considering the main question: When should organizations start digital transformation?
Digital transformation has evolved from being a buzzword to a crucial strategy for businesses aiming not just to survive but to thrive in an increasingly competitive environment. The digital age has ushered in unprecedented changes in consumer behavior, technological advancements, and market dynamics, making adaptation imperative for any organization aspiring to remain relevant.
Customers now demand seamless online experiences across various touchpoints. Whether it's purchasing a product, accessing customer support, or engaging with content, expectations for convenience, personalization, and speed have soared. Businesses that fail to meet these expectations risk losing market share and customer loyalty to more digitally adept competitors.
Furthermore, in today's data-driven world, insights derived from analytics are invaluable for making informed decisions. Competitors leveraging data analytics gain a competitive edge by understanding customer preferences, optimizing operations, and identifying emerging trends.
Moreover, Rapid changes in technology, consumer preferences, and market dynamics require businesses to adapt swiftly to stay ahead of the curve. Traditional, rigid business models are increasingly being replaced by flexible, agile frameworks that enable organizations to respond promptly to evolving circumstances and seize new opportunities.
One common misconception is the belief that there exists a "perfect" moment for digital transformation. However, waiting for ideal conditions only serves to hinder progress and puts businesses at risk of falling behind. As emphasized in the ACT, without continuous progress, regression is inevitable. Organizations must adopt a proactive mindset and embrace digital transformation as an ongoing journey rather than a one-time event.
Here's why the time to act is now:
Strategic Positioning: Early adopters of digital transformation gain a significant advantage. They establish themselves as industry leaders, attracting top talent and refining their digital strategies before their competitors catch up. By implementing transformation early, organizations can position themselves as innovators and not just follow the pace of the industry, but set the pace for the industry in which they operate.
Ensuring Your Business's Resilience for Tomorrow: Embracing digital transformation empowers organizations with the capabilities and flexibility to adapt to future disruptions and harness the potential of emerging technologies. By proactively embracing change, organizations can maintain a competitive edge, foreseeing changes in the market landscape, and utilizing innovative technologies to foster enduring expansion.
Enhanced Customer Experience: Today's customers expect personalized interactions and seamless digital experiences. Digital transformation allows you to leverage data analytics to understand customer needs and tailor offerings accordingly, fostering loyalty and boosting brand reputation. By investing in digital capabilities early, organizations can deliver the tailored experiences that customers crave, building lasting relationships and driving long-term success.
"Three o'clock is always too late or too early for anything you want to do,"- Jean-Paul Sartre
"Three o'clock," which metaphorically represents any given moment, emphasizes that the perception of time is deeply context-dependent. It highlights that what may be an ideal moment for one may be completely inadequate for another. This subjectivity prompts us to reconsider our relationship with time and recognize that the meaning of time lies not in its objective measurement, but in its interpretation. In business terms, rushing into digital transformation without proper preparation can be as damaging as procrastination. Blindly following industry trends or deploying technologies without a clear strategic roadmap can lead to wasted resources, disjointed processes, and missed opportunities. Furthermore, artificially accelerating transformational change before the organization is culturally and/or operationally ready leads to resistance to change and alienation among stakeholders. Ultimately, this negatively affects long-term corporate sustainability.
Therefore, the decision to embark on digital transformation should be informed by a comprehensive understanding of the organization's current state, future aspirations, and competitive landscape. It requires careful assessment of internal capabilities, external market dynamics, and technological trends. Moreover, it demands strategic vision, effective change management, and cross-functional collaboration to navigate the complexities of transformational change.
While digital transformation is a marathon, not a sprint, taking that crucial first step is paramount. Here's how to get started:
Strategic Alignment: Formulating a strong digital business strategy is crucial for the success of digital transformation. A strong digital strategy ensures consistency and synergy across all operational aspects of a business. This integration goes beyond simply digitizing processes; it involves a shift in strategic thinking to leverage digital tools, strengthen core competencies, and create value.
It is important to assess the company's digital strategy in alignment with global business objectives, ensuring that digital initiatives are seamlessly integrated into the overall business strategy. Additionally, it is necessary to evaluate the adequacy of budget allocation and the ability to adapt the business model to effectively capitalize on digital opportunities. Taking a holistic approach like this ensures that a company's digital strategy becomes a catalyst for sustainable growth and competitive advantage.
Digital Maturity Assessment: Assess a company's readiness for digital transformation across various dimensions of the organization, including leadership and governance systems, digital literacy, technology infrastructure, data management, customer interaction, and more. This assessment will enable the organization to pinpoint areas in need of improvement and implement targeted interventions to enhance capabilities and minimize the risk of digital transformation failure.
Opportunity Analysis: Conduct thorough market research and competitor analysis to identify emerging opportunities and potential obstacles. Proactively anticipate industry trends, consumer preferences, and regulatory changes to make well-informed strategic decisions.
Digital Transformation Team: Formulate a team comprised of experienced individuals with a clear vision to spearhead the transformation process. This may involve nurturing internal talent or collaborating with external digital transformation specialists.
Change Management: Effective change management plays a critical role in driving the success of any digital transformation initiative. Developing a robust change management strategy is paramount for fostering organizational alignment, mitigating resistance, and nurturing a culture of innovation. In today's rapidly evolving technological landscape, the ability to adapt to change emerges as a critical differentiator for organizations seeking to thrive. As a representative of the Big Three management consulting company, McKinsey & Company's latest campaign titled "It's never just tech" illustrates the core principles of effective digital transformation management. It emphasizes that digital transformation is not solely about introducing new technologies, but rather about fundamentally transforming how organizations operate and how people work. By emphasizing the human dimension of transformation, the campaign underscores the pivotal role of cultural and behavioral factors alongside technological advancements.
In conclusion, the ever-changing business landscape demands agility, innovation, and data-driven solutions. Organizations that delay this process are missing out on opportunities. The time to act is now. By embracing digital transformation early, organizations can gain a competitive advantage, ensure business continuity, and improve customer experience. However, success lies not in blindly following industry trends, but in developing a strategic roadmap tailored to the unique needs and goals of the organization.
As Jean-Paul Sartre said, "Three o'clock is always too late or too early for what you want to do." The right time for digital transformation differs for each organization. Rushing this process without preparation may lead to failure. Therefore, organizations must find a balance between responding rapidly to change and being adequately prepared to ensure success on the digital transformation journey.
“How could they see anything but the shadows if they were never allowed to move their heads?”
― Plato, The Allegory of the Cave
In the cryptic corridors of Plato's allegory of the cave, where shadows dance upon the walls, lies a profound metaphor for the journey from obscurity to enlightenment. Similarly, in the realm of commerce, businesses embarking on the path of platform models traverse a transformative odyssey, breaking free from traditional silos to sculpt interconnected ecosystems that unveil a spectrum of new opportunities.
The allegory of the cave, in which chained prisoners mistake shadows for reality, resonates in the world of digital transformation. Traditional businesses, siloed and internally focused, often lack understanding of the transformative potential of platform models. This article draws inspiration from Plato's metaphor and explores the complexities of platform success in today's digital landscape.
Delving into the academic realm, the concept of digital platform ecosystems emerges as a cornerstone of modern business dynamics. Unlike traditional linear models, where value is created through the production and distribution of goods or services, a platform business model serves as a facilitator, connecting multiple groups of users to create value for each other. Defined as interconnected networks of producers, consumers, and third-party developers, these ecosystems function as vibrant marketplaces where value creation and exchange flourish. Through the orchestration of data, resources, and services, digital platform ecosystems catalyze innovation, foster collaboration, and unlock new avenues of growth.
Platform-based business models encompass a range of specifications that differentiate them from traditional business models. Here are some key specifications, supported by citations:
Network Effects: One of the defining features of platform models is the concept of network effects. As more users join a platform, the value for all participants increases exponentially. (Parker et al., 2016) In scholarly discourse, network effects are regarded as pivotal for the triumph of platforms, fostering a cyclical pattern of expansion and user involvement.
Multi-sided Markets: Unlike traditional businesses that primarily serve a single type of customer, platform-based models often cater to multiple distinct user groups, known as multi-sided markets. (Evans & Schmalensee, 2016).
Data-driven Insights: Platforms are fueled by data, enabling them to gain deep insights into user behavior, preferences, and trends. This data-driven approach empowers platforms to personalize experiences, optimize operations, and innovate continuously. (McAfee & Brynjolfsson, 2017). Furthermore, advancements in artificial intelligence (AI) and machine learning enable platforms to extract actionable insights, predict user behavior, and automate decision-making processes, thereby delivering unparalleled value and driving competitive differentiation.
Ecosystem Orchestration: Successful platform-based models excel in orchestrating ecosystems of complementary goods, services, and stakeholders. This orchestration involves designing interfaces, establishing rules, and fostering collaboration among participants. (Zhu et al., 2019).
APIs and Openness: Platforms often embrace openness through Application Programming Interfaces (APIs), allowing third-party developers to build upon the platform's infrastructure and create innovative offerings. This openness fosters creativity, accelerates innovation, and expands the platform's capabilities.
These specifications collectively define the essence of platform-based business models, showcasing their unique characteristics and competitive advantages in the digital landscape.
The Journey of Business Transformation through Platform Models
Breaking Free from Silos
Traditional businesses often operate in silos, with little interaction between departments and a focus on internal processes. This can lead to inefficiencies, a lack of innovation, and difficulty meeting the evolving needs of customers. Platform models, on the other hand, are designed to facilitate interaction and collaboration between different groups of users. This creates a more dynamic and innovative ecosystem where businesses can leverage the collective intelligence and resources of their users to create new value.
Finding equilibrium between algorithmic regulation and crafting personalized user experiences.
Unlike the single torchbearer in the cave allegory, successful platforms use sophisticated algorithms as conductors, orchestrating complex user journeys. A prime illustration of this is the implementation of recommender systems, which tailor the user experience and enhance overall satisfaction. Netflix's recommendation engine is perhaps the most well-known and widely used recommender system. It uses an algorithm to analyze a user's viewing history, rating, and search behavior to suggest movies and TV shows that the user is likely to enjoy.
Effectively managing platform dynamics, harmonizing the varied needs of stakeholders, and proactively mitigating risks necessitate astute leadership and strategic insight. Furthermore, fostering trust, transparency, and equity within the ecosystem is imperative for cultivating sustainable growth.
Platforms strive to create seamless experiences for customers, aiming to remove obstacles and optimize interactions to enhance satisfaction and loyalty. However, alongside this goal, there is a need for algorithmic governance. Platforms rely on algorithms to moderate content, manage transactions, and mitigate risks. Yet, excessive use of these systems can worsen the user experience, while insufficient regulation may jeopardize data protection and security. Therefore, platform operators must strike a balance between ensuring security with algorithms and delivering the best user experience. Achieving this balance requires platform developers to consider user needs, legal regulations, and ethical aspects carefully
Designing for User-Centricity
Designing for user-centricity is a pivotal aspect of successful platform models, rooted in the principles of empathy and understanding in the digital era. Just as the allegory of the cave underscores the pursuit of truth and enlightenment, businesses transitioning to platform models must embark on a journey to uncover the profound needs and motivations of their users. By placing users at the core of the design process, businesses can craft experiences that resonate deeply, fostering engagement, loyalty, and meaningful interactions.
Leading the Transformation
In an era defined by technological advancement, the transition from conventional to platform-driven models presents businesses with a definitive route to prosperity and expansion. This strategic evolution necessitates a systematic approach centered on three fundamental components:
Platform business models represent a paradigm shift in the value creation equation of the digital economy. Leveraging networks, ecosystems, and data, platforms have the potential to not just drive business growth, but to transform entire industries. However, unlike Plato's cave, the digital landscape is a dynamic ecosystem in constant flux. Platform success isn't a one-time disruption, but a continuous performance demanding constant adaptation.
Rohn D., Bican P. M., Brem A., Kraus. S, Clauss Th. (2021) Digital platform-based business models – An exploration of critical success factors, Journal of Engineering and Technology Management, Volume 60.
Parker, G., Van Alstyne, M. W., & Choudary, S. P. (2016). Platform revolution: How networked markets are transforming the economy--and how to make them work for you. W. W. Norton & Company.
Evans, D. S., & Schmalensee, R. (2016). Matchmakers: The new economics of multisided platforms. Harvard Business Review Press.
McAfee, A., & Brynjolfsson, E. (2017). Machine, Platform, Crowd: Harnessing Our Digital Future..
Zhu, F., Iansiti, M., & Lakhani, K. R. (2019). Competing in the Age of AI. Harvard Business Review Press.
Changes in consumer needs and the business environment, as well as the rapid development of the digital environment, have revolutionized our economic and social activities in recent years. New forms of digital interaction and information exchange are challenging businesses and pushing them to embrace different digital solutions. The Covid-19 pandemic and associated economic uncertainty have brought this issue to the forefront, forcing many businesses to determine their current and future strategy on their own. To avoid value chain disruptions and meet ever-changing customer needs, companies are using digital technologies to create new digital services and business models, strengthening strategies and governance to support change. This complex combination of people, processes and technologies involved in constant change is what we can call digital transformation. Researchers agree that digital transformation is a holistic process of organizational change driven by digital technologies.
Over the decades, academics, managers and consultants have recognized that transforming organizations is difficult, and digital transformation is even more difficult, and have been trying to create different models for successful practice. They modeled the role of leaders who set a vision and unite employees around a shared vision, emphasized the importance of organizational culture in this process, demonstrated the negative impact of downward communication on digital transformation, and called on companies to listen to employees and involve them in change and create an environment conducive to the formation of new ideas. However, research shows that in most organizations, two out of three transformation initiatives fail. The more things change, the more things stay the same. ( “plus ça change, plus c'est la même chose” - Jean-baptiste alphonse karr)
In reality, most companies fail to follow established guidelines at some point in time. It is important for change managers to know how to manage change in a specific context. Understanding and analyzing different approaches to digital transformation is the best basis for managing the changes brought about by the digital context.
The concept of digital transformation (DT) is formed by the merging of personal and corporate information technologies and includes the transformative effect of new digital technologies, such as social, mobile, analytical, cloud technologies and the Internet of things. Some researchers understand digital transformation as the integration of digital technologies and business processes into the digital economy [Liu et. al. 2011) in a relatively broad sense, DT is perceived as a driver of change in all contexts, especially in the business context, and influences the improvement of all aspects of business (Kraus et.al, 2021). More precisely, digital transformation involves three organizational aspects: improving the user experience and changing its life cycle; Optimization of business processes and changes in organizational structure, which ultimately leads to the creation of completely new business models (Benlian et al., 2016).
Digital transformation is seen as one of the most real challenges regardless of industry. Although organizations understand its fundamental importance, they still face a number of obstacles that make it difficult to initiate digital transformation, let alone reap the benefits of this transformation. (Schuchmann & Seufert, 2015)
The growing number of opportunities brought about by the development of information technology also forces companies to “systematically identify new business opportunities at an early stage” (Kiel et al., 2016, p. 675) and requires managers to adapt to one or more business models, or even creating a completely new business model. In a recent survey on digital transformation (McKinse, 2018), executives reported that their leaders are “more engaged in digital transformation than ever before,” but at the same time they said that “their companies must first solve a number of organizational problems before how digitalization can have a truly transformative impact on their business.” In this context, it can be assumed that digital transformation de facto affects all processes within the company, as it influences corporate strategies and leads to the revision and adaptation of existing business models (Linz et al., 2017). However, the extent to which digital technology adoption impacts corporate performance and can lead to innovative business models depends on the resources and capabilities available within the company, and it will take time for business models to become more context-sensitive than technology models. Therefore, it is interesting what stages a business goes through on the path to digital transformation and how these stages should be managed.
The stages of digital transformation provide companies with different opportunities at each stage. The first two stages - digitalization (also called modernization) and general business transformation - involve changing the existing business and forming it anew. And the final stage focuses on creating new business and creating more value by opening up new opportunities. (E. G. Popkova, Y. V. Ragulina, A. V. Bogoviz, 2019)
Based on various literature and research works, it can be said that organizations face difficulties in all three stages and if the company moves to the next stage without completing any of the stages, the failure rate will be even higher.
The first step (digitalization) involves simplifying and digitizing existing business processes using so-called ERP systems. This could be a customer relationship management (CRM) application, supplier relationship management (SRM) software, or other applications to optimize supply chain processes; In terms of employee experience, this could be automating HR processes or providing employees with a self-service portal, etc.
Is implementing these digital programs enough to transform an organization? - of course not. But this step is a critical foundation for organizational strength and rapid return on investment. This allows businesses to make more complex investments in their digital transformation journey.
The second stage (transformation of the entire business) is an attempt to change the complex cross-functional value chain. Steps taken at this stage for employees can be flexible transformation, creating a culture of continuous learning and development, improving the quality of customer service, this can be done by moving the product to digital channels, creating an application with integrated payment methods, delivery systems etc.
Can we call this an attempt at transformation? - Yes. Adapting the traditional organizational structure to changes, introducing appropriate management models, and taking care of talent development are the most important elements for the success of digital transformation.
Business-wide transformations typically focus on improving existing operations. But when successful, they often open up new opportunities to create value, for example by opening new markets or finding efficient new ways of doing business. That's why business-wide transformation is functional and complex, and the experience and knowledge gained at this stage is critical for companies on the path to digital transformation.
The third step (creating a new business) involves taking advantage of new opportunities to create value and create additional revenue streams. In terms of user experience, this could be the creation of a new business model, such as from selling a product or service to a subscription-based business model. On the operations side, this could be the use of data and analytics to accurately predict the operational performance of products or systems.
“To improve is to change; to be perfect is to change often.” -Winston Churchill
If we rely on neuroscientists, it is important to consider how habits are formed and how our brains respond to changing habits. To do this, companies often use the 7C model (Fig. 1), which assumes:
During the transformation process, everything must be certain. To reduce risks, the roles of managers and leaders must be clearly defined. The goals of digital transformation must also be clear. Unclear goals can add to existing anxiety because employees won't know whether they've achieved the goal or how to measure their progress toward it. This means that goals must be specific and measurable. For example, a task given to employees to improve productivity could be formulated as follows: “Write four reports in the next quarter.” This way, they will know exactly what they want to achieve and identify strategies to achieve that goal.
For effective digital transformation, this process must be continuous. This means that the conversion does not stop once it has started. Companies should plan for the next changes and get feedback on previous changes.
Employees often need time to process new information because most of the information received is quickly forgotten by the human brain. If the information is reviewed after a few days, it is much easier to retain. Therefore, when introducing digital products into an organization, training must be conducted and continually evaluated to ensure it is effective and maximizes its benefits.
Leaders need to convey the message that digital transformation is inevitable and that the company will continue to thrive. This feeling of security and confidence will reduce threat anxiety in the brain. Communication and a sense of security will keep employees engaged in the change process, increasing the chances of success.
There are theories that say that forming a new habit takes time. Change happens more easily when done consistently and in small doses. Leaders may want to make big changes to the company, but if they are focused only on achieving the end goal from the beginning and do not begin to implement these changes in small steps, the change process can be very difficult and painful.
Because the brain is a social organ, people can find comfort in interacting with others. Leaders can empower employees to create more work-oriented teams. In addition, it is necessary to involve them in the digital transformation process. Employees are more adaptable if they feel like they are the decision makers.
Many people may feel uncomfortable in a turbulent environment when a company changes. They may doubt their competence, their abilities, etc. This can lead to increased anxiety and depression. In contrast to these feelings, leaders must ensure that their employees' self-esteem increases. They need to show that employees themselves control the processes, make choices about what tactics to use to achieve the goal, etc.
Communication is key when it comes to transformation. Employees want to feel like they have a voice and that their voice is understood. When making changes, it is necessary to create platforms where employees will have the opportunity to share their opinions and be part of the changes as much as possible. Leaders must show empathy during stressful times and connect with employees on an emotional level. This communication can take the form of surveys, feedback sessions, or one-on-one conversations.
True transformation requires new ways of working, in which leadership plays a critical role as it involves moving from an existing operating model to a new one. Therefore, it is extremely important to have leaders who are well-versed in modern technology.
It is recognized that the top management of a company is responsible for the major strategic decisions of the organization. Senior management involvement in driving digital transformation and innovation management is an important part of corporate commitment to a company's strategic efforts and is positively correlated with the successful implementation of digital initiatives. Involving executives in transformation is critical because their specialized knowledge, skills, and experience are typically the greatest and most important organizational resources. Existing experience reveals the role of the executive, especially in conditions of high uncertainty.
One of the most important roles of chief executive officers (CEOs) is to mobilize employees to contribute to the company's strategic goals. In recent years, the concept of transformational leadership has become relevant, which promotes intellectual stimulation, creates idealized influence, inspires motivation and stimulates innovative growth. Transformational leaders manage to initiate reforms in the organization at a strategic level, inspire and guide people towards these changes. These leaders create organizational culture by placing greater emphasis on a shared vision, which leads to shared values between the company and its employees. In an organizational culture with such shared values, achieving a common goal is achieved much more effectively than in companies where there is no agreed-upon vision. Organizational development researchers argue that transformational leaders play a key role and have a significant impact on organizational culture and values. The role of leaders in bringing about change in their companies is essential, which means that without leadership there can be no change. They play a decisive role in accelerating or slowing down organizational change, so their tasks during a change management strategy can be formulated as follows:
Develop an organizational culture that encourages innovation at all levels. Creating an organizational climate that supports innovation and change is an important step forward for companies. Human capital, which is unique to every organization, needs to be encouraged. Management must address two broad issues. First, leaders need to understand the impact of their role behavior on digital transformation stakeholders. The second factor is the ability of leaders to cope with high levels of uncertainty while simultaneously stimulating innovation.
Digital transformation is impossible without thinking outside the box. Attention to creativity and divergent thinking has been especially focused in the 21st century, when the development of information technology has revolutionized our lives, work processes, communication, behavior, etc. Today, pragmatic and straightforward decisions are no longer valued as highly as they were during the development of manufacturing. According to research, as people reach adulthood, divergent thinking decreases, so people begin to think routinely and repeat what they have learned. Therefore, in the workplace, it is the responsibility of leaders to encourage the generation of original ideas and creative thinking. Since employees are given the freedom to innovate their tasks, it leads to both motivation and enthusiasm to work consistently and achieve innovative goals. The only serious problem with this process occurs when it is not supported by a strong value system in the organization that can guide activities in accordance with the overall goals of the organization.
Set short-term goals and celebrate small victories. Successful and sustainable digital transformation takes time, which means the distant prospect of an end goal may not motivate employees. Therefore, leaders must create an environment conducive to early success and visible improvement. Small achievements like these make many people feel enthusiastic and motivate them to do better.
Making transformation a personal goal. People are generally more enthusiastic about something when they think it was their idea than when they are assigned to do it. Therefore, if managers care more about a particular initiative, employees perceive it as their own. However, when employees understand how digital transformation improves their work processes, it becomes clear that their contribution to achieving the transformation goal increases.
Monitoring progress is not only beneficial for all stakeholders involved in a digital transformation project, but is also critical to strategy development. Key performance indicators and transformation management indicators highlight strategy weaknesses. By understanding what works and what doesn't, leaders can adjust the plan.
Too often, senior management forgets that they are not the only role models influencing employees; Informal leaders in organizations may have less influence on the energy levels of their colleagues if they are excited about the change agenda. Regardless of their official title and status, attracting such people increases the likelihood of change success by 3.8 times.
References:
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Schuchmann, D., Seufert, S. (2015) Corporate learning in times of digital transformation: a conceptual framework and service portfolio for the learning function in banking organizations. Int. J. Adv. Corp. Learn. (iJAC) 8(1), 31–39
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Dr. Linz, Carsten & Müller-Stewens, Günter & Zimmermann, Alexander. (2017). Radical Business Model Transformation: Gaining the Competitive Edge in a Disruptive World.
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