In part 1 of this series we already touched upon the definition of Digital Transformation and how it evolved into something else. In this post we continue on that story and dive deeper in what transformation means today and tomorrow.
Once upon a time, a long, long time ago
I began my career in the early days of the Internet, somewhere around 1994. Although the Internet was all the hype and companies only had to create a few slides to raise huge amounts of money, it would take until a decade later for digital business to really start coming of age. We first needed the Internet bubble and the 2001 crash of the system to realize that the internet revolution was indeed a serious thing. Many companies died, much of the value was lost, but it also became clear that the Internet and the digital economy were here to stay.
Enter digital transformation…
I have been in transformation strategy consulting for over a decade now. It's been 10 years since Dado Van Peteghem and I published the very first version of our book "Digital Transformation." And although many books followed later, it is still one of the most impactful things we did. It became a transformation bible for many, was sold over 50,000 times in over 60 countries and made it to must-read lists on transformation and business strategy. Hell, even a Harvard professor copied some of our models, without reference to the source, so I guess that's a compliment, right?
I'm proud to say that we were among the first to recognize the digital wave as the massive business game-changer it turned out to be.
And although much has changed in recent years, it seems to me that many organizations are still stuck with traditional "Digital Transformation", caused by digital disruptors. What if that's not enough? What if "digital" is not the only disruptor for your industry and business?
The waves of transformation
The following image shows the 4 waves of transformation, which I will explain further in this post.
Company Digitization
The first wave was not really transformative. The focus of corporate digitization was on making the company digital: internal processes, tools, models, ... were aimed at optimizing the organization's performance and ideally also reducing costs. Another dimension in this phase was the introduction of digital touchpoints for customers, suppliers, partners, ...: websites, intranet applications, mobile sites, social media presence, and so on.
These actions made the company digital, but in essence, it remained the same company. A bank was still the same bank, with the same solutions, prices, ... only ported to the digital world.
Digital Transformation
The digital transformation started to become a real thing at the beginning of the last decade. In just a few years, players like Amazon, Uber, Airbnb, Spotify, and Netflix showed that digital technologies also had a very disruptive potential. Not only could they make a traditional business more efficient and modern, but they could also disrupt and even destroy an entire existing industry.
Suddenly, "digital" was no longer just a tool, as it became a disruptor for established companies and the status quo in which they operated. It enabled new players to introduce new solutions, with different pricing and go-to-market strategies. They solved old problems in radically new ways.
It began to force industries to change their business models at the core, not just make them digital on the sidelines. By the end of that decade, just about every captain of industry realized that her sector could be hit by digital disruptions and forced to make the corresponding business transformation. It became one of the strategic priorities for the entire economy.
Societal Transformation
Many CEOs focused on the digital transformation challenge but missed one “small"
detail: society as a whole is also changing, and these disruptions equally have enormous transformative potential.
At Scopernia, we began to realize that our scope needed to expand sometime around 2017 or 2018. We simultaneously organized transformation strategy workshops for different industries: we worked for a bank, a publisher, a retailer, and a major player in the automotive industry. In analyzing the drivers of transformation for each of them, we noticed that our "digital impact framework" did not cover everything.
When we brainstormed and discussed with each of these clients, they all said, "Yes, of course, digital is a key driver of change, but so is the future of work, changes in how we live, mobility, climate challenges, food production, a multicultural society, energy, healthcare, life expectancy, poverty and so on."
When we prioritized these "social disruptions," each client stated they saw the same priorities for the future: the bank, the retailer, the publisher, and the car company, they all decided to focus on the same social domains for their transformation strategy. That was a real eye-opener for us.
And while "digital" was a key element in everything we discussed, it no longer covered it all, so we started talking about Societal Transformation: digital and societal disruptions that drive business transformation at its core.
This milestone also prompted me to write my book "The World Is Round" (Dutch version: “De Wereld Is Rond”) and change our transformation methodology.
Impact Transformation
In this short history lesson, we have finally arrived in the present. We are now at the beginning of 2022 and still trying to deal with the biggest crisis since WW2.
When Covid hit us, many people thought it would lead to two things: the acceleration of digital adoption on the one hand, and the decline of attention to societal challenges such as climate change on the other. Who would still care about climate or sustainability when we are struggling for human and economic survival, right?
Fortunately, that prediction was only half true. Yes, we have accelerated digital adoption, but contrary to what was predicted, we have not paid less attention to the major societal challenges and issues. In a way, the Covid crisis has even accelerated the broad focus on sustainability, and many (business) leaders, companies, and governments are now going full steam ahead on this topic.
With this, we have entered the phase of Impact Transformation: the transformation of the core of our business, triggered by digital and societal disruptions and aimed at both financial and societal gain. Doing well (for the economy), by doing good (for society).
The impact of the Covid crisis on our society and economy cannot be underestimated. In part 3 of this series, we dive deeper in two key lessons we have learned.
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If you have a transformation challenge and you are looking for a vision for your company in the New Equilibrium, don't hesitate to contact us as well. We might be able to help you.