The re:think Digital Transformation Model
Part 1.1. Validation
Whenever we talked with our clients about the various transformation models, we felt like something was missing. Mostly we thought those models had a too narrow perspective on the matter. That is why we developed our own re:think Digital Transformation Model and now start to write about it in this series of articles. Also, we think our model is the most comprehensive one out there. That might be a bold claim, and let’s be honest, you can claim anything anytime but that is not how we want to work. We want to make sure our work is based on research, on experience and on facts.
That means for our Digital Transformation Model it was not enough to make claims that sound reasonable enough, but we wanted to prove it — or at least confirm it. So we partnered up with Consult One, a local student managed consultancy we like to work with. They offer great insights and perspectives, and are a good place for students to get working experience in a consulting environment.
Validating our claims
Consult One took a deep dive into six companies that went through a digital transformation and looked for success parameters, transformation tools and change strategies these companies applied. Together we analyzed how the companies planned, executed, and reviewed their transformation efforts and how they dealt with the three areas of transformation, Digital Maturity, Mindset-, and Business Transformation.
The results are clear, all companies engaged in all three areas of transformation, but to different degrees and in various stages. Those that ignored one of the areas at first soon realized that they should not and corrected their strategy. Of course, these results make us happy as they show that our Model is a very valid approach and can help avoid pitfalls along the long way of Digital Transformation.
But let us go through the research step by step.
The companies we took a good hard look at are a mix of well-known international corporations and smaller maybe not yet so well known or rising companies: LEGO, Viessmann, Zalando, PayPal, Netflix, and Bosch.
When we looked for patterns in their transformation endeavors, we could find a lot of tools, methods or approaches that were shared between companies and targeted the Digital Maturity, Mindset- and Business Transformation. Look at this overview of employed tools we could find out about:
All six companies took decisive steps to transform their mindset by realigning their company values and refocusing what leadership is all about. Usually a clear process with the involvement of all stakeholders was implemented and all companies introduced or strengthened agile methods and teams.
- For the implementation of new ways of working, a step-by-step approach was taken and feedback from stakeholders was always incorporated.
- A clear process was defined and carried out for integrating agile methods into the company.
- Corporate values were realigned, and the understanding of leadership was adapted so that leaders act as support and in a coaching role
- Introduction of cross-functional teams.
- Procedural working was replaced by trial-and-error methods and or design thinking.
- Regular company-wide meetings were introduced in which updates and questions could be communicated and an internal communication platform/app was introduced to facilitate communication.
To improve their digital maturity new digital tools, processes and internal platforms were facilitated across the board. A common strategy is to invest in or build up own digital start-ups. Especially in larger, traditional companies the freedom of a small independent organization can help to speed up development and more experimental approaches.
As we cluster digital maturity into data, information and knowledge, following the DIKW pyramid, we were pleased to see that (of course!) data generation and extraction of information from users and product data played an important role in all transformations. Only if a company is able to generate knowledge from actual user and usage data can you be sure to reach real customers with your innovations.
- To simplify cooperation, a collaboration platform was used throughout the company.
- An in-house platform was created to adapt processes and procedures to the companies’ requirements.
- Investment in digital units/start-ups to generate ideas and subsequently sponsor them or reintegrate them into the company.
- Digitalization has been strengthened through the networking of digital departments with all business areas.
- KPI as a driving force for business areas (marketing, sales, strategy) — these are used through testing procedures, data analytics to personalize products and thus become more attractive.
On the Business Transformation side we see clear movements to broaden target audiences and to enhance the user-experience with digital extensions of the products. While this is of course not relevant for purely digital products, it is very relevant for traditional industries where only through such extensions you can close the link between your product and the whole digital multiverse of data, experience, flexibility, speed and growth.
- The product was made more customizable and thus interesting for a larger target group.
- The product portfolio and the mainstays were multiplied by the transformation.
- The product strategy included a variety of business partners so that it could be integrated into a wide range of application areas.
- The product was digitally connected so that it generates data which is used to further develop the product and the associated environment.
- The product was enhanced through networking by essential functions that extend the product’s functionality.
Sure, this is a rough overview and we will go into more detail in the following articles, but it is an overview that shows some common grounds and it shows, that every transformation process is different. The big take away for us is that it’s true, a Digital Transformation needs attention on Business and Mindset as well as the Digital Maturity to succeed. We will see why when we dive right in.
Our examples all had a different starting point, a different route and a different outcome to their transformation. We wanted to place the companies we looked at in our Transformation Model and tried to show the result of their successful journey:
As you can see, the companies that produce physical goods and services around them, like Bosch, Viessmann or LEGO end up in the middle of the field. That does not mean that their transformations aren’t as successful, it just means their goals and strategies are different. As we talked about in the introduction and will see multiple times in the series, the most important part of a transformation is to have a clear vision and strategy why you want or need a digital transformation. (“Because everyone seems to be doing it.” is not good enough, sorry.)
Not everybody has to become a platform player, but every company will profit from being able to innovate reliably and consistently. And in that regard, Bosch, Viessmann or LEGO had very successful transformations and are doing better than ever.
Of course their transformations are not yet done, if there even is something like a finish line for transformation. If your siloed company’s mindset opens up for example, you will soon realize that constant change is inevitable and you might even embrace it and become a liquid organization, forming itself around changing business opportunities in an ever-changing world. Or, as re:think’s managing director and co-founder Alex Joppich often says: “Whenever you complete a Digital Transformation, you should directly be prepared to start the next one.”
In the end, it’s all about bringing together the three pillars of Business, Mindset, and Digital Maturity, that’s what we tell our clients, that what we write about, and that’s what we saw in the examples we researched together with Consult One.
So if you are ever wondering if you really need to work on your company’s mindset, or if you really also need a new business model, the answer is: “Yes.” We are now more certain than ever: “Yes, you do.”
So, let’s get started today!