Business Transformation Requires Transformational Leaders

CxOs believe technological advances are driving the shift in the competitive environment. But there are marked differences in how they're preparing to take on digital invaders and attackers from other industries. CxOs increasingly leverage new technologies to focus on customers as individuals. And they see a need to collaborate more, with more external parties, for innovation. Although many organizations acknowledge the need to get closer to the action, as the authors describe in this article, it's "torchbearers" who are exploring new opportunities in adjacent spaces. Torchbearers do not try to emulate everything a digital invader would do, but they do have a keener sense of how the competitive arena has shifted. Torchbearers are more likely to be looking forward and looking outward to entering new markets and embracing a more decentralized management style. Torchbearers are poised to strike back.

Collaborating closely with the public employment service for the Flemish region in Belgium, VDAB, we created a digital strategy for VDAB using a novel method called Action Design Research. In this article, we present VDAB's approach to digital transformation, together with its digital strategy, the "boundary-breaking rules." Coining these rules was an important first step in VDAB's digital transformation, as they show the "boundary-breakingly" different ways in which VDAB will have to work.

Cutter Fellow Steve Andriole suggests five steps to successful corporate digital transformation. These have emerged from the DT efforts we've seen over the past few years and from the cumulative understanding of enterprise program management that has evolved over the past 50 years. Some of these steps are obvious, but some are not. Put another way, not every company can -- or should -- be digitally transformed. So before setting up an "Innovation Lab" or funding huge DT projects, do some homework.

A digital transformation isn't just launching a brand on social media, hosting an electronic storefront, or connecting the enterprise workforce. Nor is it activating big data or analytics to synthesize new differentiators. A digital transformation requires escape from the routine mindset of business strategy to discover adjacent opportunities and strategies that create an asymmetric competitive advantage (i.e., a powerful advantage that denies competitors the use of similar strategies and tactics).

In this article, Paul Clermont examines the scope of digital transformation, what kinds of enterprises are most threatened or helped by it, how to recognize threats and opportunities, and how to become a survivor — or a winner.

With this issue of Cutter IT Journal, we aim to bring more perspective to the question of how to digitally transform. All the contributing authors agree that digital transformation will be profoundly complex, but this complexity does not prevent them from bringing useful perspectives to the table and suggesting approaches for how to frame and launch transformation. This issue does not glorify startups, big-bang disruption, or Silicon Valley; it does, however, investigate what lessons incumbents can take from digital natives. It also broadens the scope to include historical framing of the challenge, as well as the authors' rich experience and expertise in working with incumbent organizations.

Tomorrow's problems and the innovation needed to solve them are likely to require multiple disciplines. One person with multiple domains of knowledge becomes increasingly valuable. 

While Agile is pretty mainstream by now in Web and app development, it is still a major challenge in system design, where software plays only a part of the game, although that piece is steadily increasing. Whether we're talking about manufacturers of cars, chips, or medical devices, they all need to respond to the increasing pace in the market. Only one or two decades ago, these industries were content with product cycles of three to five years. Today, some chip manufacturers are capable of delivering a new version of their product every second month, causing excitement for their customers and despair for their competitors.