Transform Your Business
Digital transformation. We read about it often. Organizational leaders struggle to determine the possible threats, the impending changes needed, the opportunities that are possible.
Peter Weill and Stephanie L. Woerner’s new book, What’s Your Digital Business Model?, provides a strategic framework for thinking about these issues. Peter is a Senior Research Scientist and Chair of the Center for Information Systems Research at the MIT Sloan School of Management. Stephanie is also Research Scientist at the same institution with a specialty focusing on how companies manage organizational change caused by digital disruption.
I had the opportunity to speak with them about their research and new book.
Rate Your Digital Readiness
How would you rate most organizations readiness for the era of digital disruption that we are in and are facing?
Most organizations we talk to and research know they have to change to stay relevant and have improved in some areas (perhaps they’ve worked on business process optimization or they’ve automated a lot of processes). However, as customer experience demands have increased, we find that many older, bigger companies have not made the improvements and changes needed to address those demands. Plus the leaders of the average large company (more than $7B in revenue) identified that 46% of their revenues are under threat over the next 5 years if they don’t change.
Fact: large companies predict 46 percent of revenues are threatened in the next 5 years absent change.
How was the research developed?
The book is based around six questions we think every executive and organization has to be able to answer in order to be competitive in the digital economy. We started this research by interviewing leaders from large, global companies, asking them to describe their most important digitally-enabled business transformation initiative. From there we developed a model, tested the preliminary findings in more than 50 workshops with senior executives, identified capabilities needed, conducted several surveys to test those capabilities and show links to financial performance, and interviewed many companies to help us understand what it takes to transform a business. The book resulted from five years of research which shows that the senior executives of top performing firms honestly answered the six questions. To help, each chapter concludes with a self-assessment on one of the six questions. The reader can then compare their self-assessment results to top financial performers to help leadership teams understand the gap they have to close.
Needed: Honest Conversations about the Future
Of the six parts, is there one step that more organizations get stuck in than another?
Probably the hardest question for most organizations is having an honest conversation about whether they have leadership, at all levels, who will persevere and successfully deliver the business transformation. Along the way the culture will have to change and adapt to the new digital business model and often this means changing people at the top. But it is not just the top layer of leaders that has to change. Successful transformation requires getting the whole company to behave differently – from the board to the lowest level of employees. For example, DBS Bank in Singapore, which was one the Euromoney’s most digital banks in 2016 has managed to get 14,800 of their 22,000 people involved in a digital innovation activity every week.