WHY IT MATTERS: Digital Transformation

Send us back to ancient Greece with an AK-47, a home brewing kit, or a battery-powered vibrator, and startled peasants would worship at our feet.

Only one thing makes entrepreneurs expand capacity and that has nothing to do with government tax policy. A businessman will hire more workers and invest when his inventory is shrinking, specifically, when he is able to sell more than he is able to produce. If stock is sitting on his shelf, he instead fires workers, no matter what his tax rate.

Attracting digital experts requires more than compensation and the flattery of being asked to serve on a board

1.      “If you play [your competitor’s] game, you lose every time.” Allan Benton. http://www.esquire.com/features/what-ive-learned/allan-benton-interview-0909 This quotation to me is all about moats and sustainable differentiation.  If you haven’t read Warren Buffett, Michael Porter and Michael Mauboussin about “moats/sustainable competitive advantage,” well, you are missing out in a huge way.

The findings are sobering: almost half of CEOs view their CIOs as out of step with the business and about the same percentage think IT should be a commodity service, purchased as needed.

Daniel McCallum’s 1854 organizational design for the New York and Erie Railroad resembles a tree rather than a pyramid. It empowered frontline managers by clarifying data flows. A McKinsey Quarterly Organization article.

Boards are starting to guide management by asking the right questions about technology.

In the course of that work I have learned that the typical RFP-driven vendor selection process produces poor results. Clients find the technology or services are not what they expected, vendors are frustrated, and projects are delayed and costly. We have all been there.

Enterprise Transformation is a popular term used to describe efforts on the part of senior executives to improve the overall performance of their businesses. Of all the terms that have been tossed around recently, it probably is the best description of how executives understand what it is they are doing. IBM suggests:

1. Start a movement - Transformation requires the active engagement of employees.
2. Establish clear transformation governance - The initial energy of a new initiative fades, and the effort ultimately succeeds only if there is a clear structure in place to see that goals are accomplished.
3. Transformation requires a data-driven discussion - It's important to gather volumes of data and then to analyze it to track what is working and where there are problems.
4. Radically simplify business process - IBM focused on eliminating, standardizing and automating work, with a special focus on eliminating complexities that impede integration efforts.
5. Invest in transformative innovation - New technologies, new platforms, new approaches can't solve every problem but they can accelerate your processes and enable your people.
6. Embody creative leadership - IBM surveys suggested that the number one leadership quality needed for successive transformations was creativity—which IBM went on to associate with "broader and deeper thinking of systems and patterns, the ability to handle uncertainty with optimism and enthusiasm, more openness to a multitude of cultural differences, meaningful collaboration, and a spirit of restless reinvention." This may sound like fuzzy stuff, but IBM proceeded to pioneer classes in these leadership skills.

I've spent time in the past year writing about the emerging digital enterprise. I want to shift my focus to the road map required to become one. This is the first in a six part series that examines...

Underlying the progress around social media, advanced analytics, and mobile, marketers still are grappling with processes and management.

"... we were struck by how every executive speaker made a strong reference to the significant changes they have had to make to their operations. The brand campaigns, social programs, mobile experiments, and changes to their websites were wonderful and inspiring to see. But underlying all of this progress was a non-stop drumbeat of mentions of “the incredibly heavy lifting it took to get our mobile activities off the ground,” or “the newsroom-like style in which we now manage our social media activities”, or “the integration between marketing and IT we had to force to release our next generation site.”