Digital Dimensions

Digital
Dimensions
Tathagat Varma
Technology Strategy and
Business Operations,
Walmart Global Tech
Doctoral Candidate (EFPM),
Indian School of Business,
Hyderabad

What is Digital?
Technology-centric
view: it’s all about
technology!
Customer-centric
view: it’s all about how
a company engages
with customers
Business-centric view:
it’s an entirely new way
of doing business
Organization-Centric
View: it's all about the
new way of working
Process-centric view:
it's all about being agile
and lean
Data-centric view: it's
all about how a
company uses data
Strategy-centric view:
it's all about how a
business delivers value!

What is Digital?
• Applying the culture, practices, processes &
technologies of the Internet-era to respond to people’s
raised expectations. – Tom Loosemore @tomskitomski
• “The truth is that digital transformation is actually not
about adapting to new technology at all – it’s about
directing an organization to be more adaptive to
change itself.” - Lindsay Herbert. “Digital
Transformation.”

What’s a Digital Mindset?
“Being digital is about using data to make better and faster
decisions, devolving decision making to smaller teams, and
developing much more iterative and rapid ways of doing things.
Thinking in this way shouldn’t be limited to just a handful of
functions. It should incorporate a broad swath of how companies
operate, including creatively partnering with external companies to
extend necessary capabilities. A digital mind-set institutionalizes
cross-functional collaboration, flattens hierarchies, and builds
environments to encourage the generation of new ideas.
Incentives and metrics are developed to support such decision-
making agility."
https://www.mckinsey.com/industries/technology-media-and-telecommunications/our-insights/what-digital-really-means

Digitization, Digitalization and
Digital Transformation…
https://sloanreview.mit.edu/article/digital-transformation-on-purpose/

Digital Transformation fail!
• Bain: 95% either failed
to deliver or settled for
diluted performance
• Forbes: 84%
• HBR: 70%
Pic: https://dsruptr.com/2019/12/01/the-trillion-dollar-reason-fortune-500-companies-fail-at-digital-transformation/

Some big ones…!
• P&G (2012)
• Ford Smart Mobility (2014)
• GE Digital (2015)
• Why do they fail?

Digital Transformation is not about
technology!
• https://hbr.org/2019/03/digital-transformation-is-not-about-technology
• Digital transformation worked (for these organizations) because their leaders
went back to the fundamentals: they focused on changing the mindset of its
members as well as the organizational culture and processes before they
decide what digital tools to use and how to use them. What the members
envision to be the future of the organization drove the technology, not the
other way around.
• Lessons:
• Figure out your business strategy before you invest in anything
• Leverage insiders
• Design customer experience from the outside in
• Recognize employees’ fear of being replaced
• Bring Silicon Valley start-up culture inside

Why So Many High-Profile Digital
Transformations Fail?
• https://hbr.org/2018/03/why-so-many-high-profile-digital-
transformations-fail?
• No managers should view digital — or any other major
technological innovation — as their sure salvation
• Digital is not just a thing that you can you can buy and plug into
the organization
• It’s important to calibrate your digital investments to the
readiness of your industry — both customers and competitors
• When things are not going so well in the existing business, the
call of a new business model can become more powerful than it
should

Digital Transformation Is About
Talent, Not Technology
• https://hbr.org/2020/05/digital-transformation-is-about-talent-
not-technology?
• Contrary to popular belief, digital transformation is less about
technology and more about people. You can pretty much buy any
technology, but your ability to adapt to an even more digital
future depends on developing the next generation of
skills, closing the gap between talent supply and demand, and
future-proofing your own and others’ potential.
• Put people first
• Focus on soft skills
• Drive change from the top
• Act on data insights
• If you can’t fail fast, make sure you succeed slowly!

The $900 billion reason GE, Ford and
P&G failed at digital transformation
• https://www.cnbc.com/2019/10/30/heres-why-ge-fords-digital-transformation-
programs-failed-last-year.html
• Much has been written dissecting the reasons for digital transformation failure —
most experts have settled on people/employees, organizational culture and
leadership as weak links. But few acknowledge the real common thread:
communication breakdown.
• The truth is, people aren’t the problem; it’s the organization’s failure to
communicate effectively with its people that sets them up for digital
transformation trouble from the start.
• Focus on the why
• Create personalized communication journey
• Create targeted multimedia experiences that reach different groups
• Communicate in context
• Use data to measure and iterate
• Become a change-ready organization

Why digital strategies fail?
• https://www.mckinsey.com/business-functions/mckinsey-digital/our-
insights/why-digital-strategies-fail
• We find that a surprisingly large number underestimate the increasing
momentum of digitization, the behavioral changes and technology driving it,
and, perhaps most of all, the scale of the disruption bearing down on them.
Many companies are still locked into strategy-development processes that
churn along on annual cycles. Only 8 percent of companies we surveyed
recently said their current business model would remain economically viable if
their industry keeps digitizing at its current course and speed.
• Pitfalls
• Fuzzy definitions
• Misunderstanding the economics of digital
• Overlooking ecosystems
• Overindexing on the ”usual suspects”
• Missing the duality of digital

Digital
Dimensions
• PurposeWhy
• TechnologyHow
• ProcessesWhat
• PeopleWho

Tech Stack
• A stratified representation of various technologies, components
(such as databases, tools, etc.), programming languages and
applications that go into a digital product or service such as a
mobile app or a website, etc. aka Solution Stack.
• Essentially consists of a client-side front-end and a server-side
back-end, which includes programming languages, frameworks,
databases and servers
• Examples:
• Older ones like LAMP (Linux, Apache, MySQL, PHP/Perl/Python) or WAMP
(Windows instead of Linux),and
• New ones including MEAN (MongoDB, Express.js, AngularJS, Nose.js),
MERN (Same as MEAN but React instead of Angular), MEVN (Vue.js instead
of Angular)

A Modern
Tech Stack
https://heap.io/topics/what-is-a-tech-stack

Why a Tech Stack?
LEGACY CODE DEVELOPER
TALENT
SPEED OF
DEVELOPMENT
PERFORMANCE
SECURITY SCALABILITY MAINTENANCE

Quite a bit of choices…!
https://ebaytech.berlin/picking-
technology-stacks-
2c4e138c12c8

India Stack
IndiaStack is a set of APIs that
allows governments, businesses,
startups and developers to utilise
an unique digital Infrastructure
to solve India’s hard problems
towards presence-less,
paperless, and cashless service
delivery. The Open API team at
iSPIRT has been a pro-bono
partner in the development,
evolution, and evangelisation of
these APIs and systems.
https://www.indiastack.org/

Gartner Hype
Cycle for
Emerging
Technologies,
2020
Five Trends:
• Composite Architectures
• Algorithmic Trust
• Beyond Silicon
• Formative AI
• Digital Me
https://www.gartner.com/smarterwithgartner/5-trends-drive-the-gartner-hype-cycle-for-emerging-technologies-2020/

Internet
• 1.75 B websites! (60% in English)
• 5+ M mobile apps
• 4.54 B active users (out of 7.77 B humans), 50% in
Asia
• 4.18 B mobile internet users!
• 3.8 B active on social media consume 2.24 hrs daily
• 2.05 B shop online!
• 47% global retail sales made online
• 28% online sales via mobile
• $3.53 T Retail e–commerce and $2.03 T
marketplaces (2019)
• Kuwait has highest internet penetration: 99.6%
• US is 3rd with 293m, with 100% access for 18-29 age
group
https://hostingfacts.com/internet-facts-stats/

Robotic
Process
Automation
(RPA)
Robotic Process Automation is the technology that
allows anyone today to configure computer
software, or a “robot” to emulate and integrate the
actions of a human interacting within digital
systems to execute a business process.
RPA robots utilize the user interface to capture data
and manipulate applications just like humans do.
They interpret, trigger responses and communicate
with other systems in order to perform on a vast
variety of repetitive tasks. Only substantially better:
an RPA software robot never sleeps and makes zero
mistakes.
https://www.uipath.com/rpa/robotic-process-automation

Big Data
Big data is high-volume,
high-velocity and/or high-
variety information assets
that demand cost-effective,
innovative forms of
information processing that
enable enhanced insight,
decision making, and
process automation.
(Gartner)
Pic: https://www.techentice.com/the-data-veracity-big-data/

Analytics
Analytics is the scientific process of
discovering and communicating
the meaningful patterns which
can be found in data.
It is concerned with turning raw
data into insight for making better
decisions.
Analytics relies on the application of
statistics, computer programming,
and operations research in order to
quantify and gain insight to the
meanings of data. It is especially
useful in areas which record a lot of
data or information. (Technopedia)
Pic: https://blogs.gartner.com/jason-mcnellis/2019/11/05/youre-likely-investing-lot-marketing-analytics-getting-right-insights/

AI
• Prof John McCarthy, Father of AI: AI is the science and
engineering of making intelligent machines, especially intelligent
computer programs. It is related to the similar task of using
computers to understand human intelligence, but AI does not
have to confine itself to methods that are biologically observable.
• Machine Learning: Machine learning is concerned with building
systems that improve their performance on a task when given
examples of ideal performance on the task, or improve their
performance with repeated experience on the task.
• Deep Learning is a subfield of machine learning inspired by the
structure and function of the brain called artificial neural
networks.
http://jmc.stanford.edu/artificial-intelligence/what-is-ai/index.html

Types of Learning
• In a supervised learning model, the algorithm
learns on a labeled dataset, providing an answer
key that the algorithm can use to evaluate its
accuracy on training data.
• An unsupervised model, in contrast, provides
unlabeled data that the algorithm tries to make
sense of by extracting features and patterns on its
own.
• Semi-supervised learning takes a middle ground.
It uses a small amount of labeled data bolstering a
larger set of unlabeled data.
• And reinforcement learning trains an algorithm
with a reward system, providing feedback when
an artificial intelligence agent performs the best
action in a particular situation.
https://blogs.nvidia.com/blog/2018/08/02/supervised-unsupervised-learning/

Blockchain
• Blockchain is a system of recording
information in a way that makes it
difficult or impossible to change, hack, or
cheat the system.
• A blockchain is essentially a digital ledger
of transactions that is duplicated and
distributed across the entire network of
computer systems on the blockchain.
Each block in the chain contains a
number of transactions, and every time a
new transaction occurs on the blockchain,
a record of that transaction is added to
every participant’s ledger. The
decentralised database managed by
multiple participants is known as
Distributed Ledger Technology (DLT).
https://www.euromoney.com/learning/blockchain-explained/what-is-blockchain

Cryptocurrency
• Cryptocurrency is a form of payment that can be exchanged online for goods
and services. Many companies have issued their own currencies, often called
tokens, and these can be traded specifically for the good or service that the
company provides. Think of them as you would arcade tokens or casino chips.
You’ll need to exchange real currency for the cryptocurrency to access the
good or service.
• Cryptocurrencies work using a technology called blockchain. Blockchain is a
decentralized technology spread across many computers that manages and
records transactions. Part of the appeal of this technology is its security.
• More than 6,700 different cryptocurrencies are traded publicly, according to
CoinMarketCap.com, a market research website. And cryptocurrencies
continue to proliferate, raising money through initial coin offerings, or
ICOs. The total value of all cryptocurrencies on September 2, 2020 was more
than $370 billion, according to CoinMarketCap, and the total value of all
bitcoins, the most popular digital currency, was pegged at about $210 billion.
https://www.nerdwallet.com/blog/investing/cryptocurrency-7-things-to-know/

Why cryptocurrencies?
Cryptocurrencies appeal to their supporters for a variety of reasons. Here are
some of the most popular:
• Supporters see cryptocurrencies such as bitcoin as the currency of the
future and are racing to buy them now, presumably before they become more
valuable
• Some supporters like the fact that cryptocurrency removes central banks
from managing the money supply, since over time these banks tend to reduce
the value of money via inflation
• Other supporters like the technology behind cryptocurrencies, the blockchain,
because it’s a decentralized processing and recording system and can be
more secure than traditional payment systems
• Some speculators like cryptocurrencies because they’re going up in value and
have no interest in the currencies’ long-term acceptance as a way to move
money
https://www.nerdwallet.com/blog/investing/cryptocurrency-7-things-to-know/

Types of Cryptocurrencies
The crypto world has come a long way since the introduction of Bitcoin – with 1,000 active cryptocurrencies on the
market and more being constantly added. However some of the big players include not only Bitcoin but also XRP,
Ethereum, Bitcoin Cash, EOS, Litecoin, Ripple, Tether and Stellar. Even though each currency is different in its
function, development and purpose, what unites them is the underlying meaning of a cryptocurrency. Simply, this
entails a digital currency that is created and secured by cryptography, the art of writing or solving digital
codes. Though cryptocurrencies existed even before the development of Bitcoin, it is important to note that Bitcoin
was the first to be completely decentralised and therefore completely changed the crypto space.
• Altcoins: As the name suggests, Altcoins refers to coins that are an alternative to Bitcoin. Some Altcoins are a
close variant Bitcoin, sharing the open sourced nature of Bitcoin, whilst others create their protocol on which to
operate. However, all Altcoins have a unique blockchain upon which their transactions occur.
• Forks: If you’ve delved into the Altcoin space, you would have come across the idea of Forks. Forks represent a
split in the blockchain and allow for the Altcoins to occur. Specifically, forks can be divided into: Hard Forks. An
upgrade in the protocol that cannot work with older versions, including Bitcoin Cash. Soft Forks. An upgrade in
the protocol that can still work with older versions, including the Bitcoin Improvement Proposal (BIP).
• Tokens: Finally, we have tokens. These are a fairly general term which are impacted by the context in which they
are used. As such, a token can mean: A digital asset. Including a Bitcoin or Altcoin token. A unit of
value. Including how many Bitcoins a person has, described as X Bitcoin tokens. A string of data. The transfer,
storage and creation of cryptocurrencies is done through a string of data known as tokens. A utility token. Allows
a user to access a certain product or service.
https://bitcoin.co.uk/the-four-main-types-of-cryptocurrencies/

Cloud
• Cloud computing is the delivery of computing services—
including servers, storage, databases, networking,
software, analytics, and intelligence—over the Internet
(“the cloud”) to offer faster innovation, flexible resources,
and economies of scale.
• You typically pay only for cloud services you use, helping
lower your operating costs, run your infrastructure more
efficiently and scale as your business needs change.
https://azure.microsoft.com/en-in/overview/what-is-cloud-computing/

Types of Cloud Computing
• Public cloud: Public clouds are owned and operated by a third-party cloud service
providers, which deliver their computing resources like servers and storage over the
Internet. Microsoft Azure is an example of a public cloud. With a public cloud, all
hardware, software and other supporting infrastructure is owned and managed by the
cloud provider. You access these services and manage your account using a web
browser. Learn more about the public cloud.
• Private cloud: A private cloud refers to cloud computing resources used exclusively by
a single business or organisation. A private cloud can be physically located on the
company’s on-site datacenter. Some companies also pay third-party service providers to
host their private cloud. A private cloud is one in which the services and infrastructure
are maintained on a private network. Learn more about the private cloud.
• Hybrid cloud: Hybrid clouds combine public and private clouds, bound together by
technology that allows data and applications to be shared between them. By allowing
data and applications to move between private and public clouds, a hybrid cloud gives
your business greater flexibility, more deployment options and helps optimise your
existing infrastructure, security and compliance. Learn more about the hybrid cloud.

Types of Cloud Services
• Infrastructure as a service (IaaS): The most basic category of cloud computing services.
With IaaS, you rent IT infrastructure—servers and virtual machines (VMs), storage, networks,
operating systems—from a cloud provider on a pay-as-you-go basis.
• Platform as a service (PaaS): Platform as a service refers to cloud computing services that
supply an on-demand environment for developing, testing, delivering and managing
software applications. PaaS is designed to make it easier for developers to quickly create web
or mobile apps, without worrying about setting up or managing the underlying
infrastructure of servers, storage, network and databases needed for development.
• Serverless computing: Overlapping with PaaS, serverless computing focuses on building
app functionality without spending time continually managing the servers and
infrastructure required to do so. The cloud provider handles the setup, capacity planning and
server management for you. Serverless architectures are highly scalable and event-driven,
only using resources when a specific function or trigger occurs.
• Software as a service (SaaS): Software as a service is a method for delivering software
applications over the Internet, on demand and typically on a subscription basis. With SaaS,
cloud providers host and manage the software application and underlying infrastructure and
handle any maintenance, like software upgrades and security patching. Users connect to the
application over the Internet, usually with a web browser on their phone, tablet or PC.

Internet of Things (IoT)
• The Internet of Things (IoT) describes the network of physical objects—“things”—that
are embedded with sensors, software, and other technologies for the purpose of
connecting and exchanging data with other devices and systems over the internet.
These devices range from ordinary household objects to sophisticated industrial tools.
With more than 7 billion connected IoT devices today, experts are expecting this
number to grow to 10 billion by 2020 and 22 billion by 2025. (Oracle)
• The primary difference between the Internet of Things and the Internet of Everything
are the pillars for the concepts:
• The Internet of Things focuses on physical objects.
• The Internet of Everything focuses on four constituents: people, things, data and
processes.
• Simply put, the Internet of Things involves the interconnectivity of physical objects and
data input and output, while the Internet of Everything is a comprehensive term that
refers to the interconnectivity of various technologies, processes and people.
https://www.salesforce.com/eu/blog/2020/01/evolution-of-the-internet-of-things-and-internet-of-everything.html

Internet of Everything (IoE)
• The Internet of Everything is based on the idea of all-around connectivity, intelligence and cognition. Unlike
computerised devices that rely on intelligent internet connections, any object can be fitted with digital features
and connected to a network of other objects, people and processes, with the goal of converting information into
actions for new capabilities and experiences.
• The Internet of Everything’s pillars are:
• Decentralisation: Data is processed in numerous distributed nodes, and not within a central system.
• Data input and output: External data can be stored on devices and returned to other components within the network.
• Connection to every technology in digital transformation: The Internet of Everything connects to cloud computing, artificial
intelligence, big data, the Internet of Things, machine learning and other vital future technologies.
• The constituent elements of the Internet of Everything are:
• People: People offer personal insights through connected devices, such as healthcare sensors and social media, and artificial
intelligence, and other technologies analyse the data to discover insights about human concerns and deliver personalised
content that’s relevant to their needs.
• Things: Things encompass the Internet of Things or the physical objects with sensors that generate data and transfer it
through the network.
• Data: Data from devices is raw, but once aggregated and analysed it can be used for actionable decisions and intelligent
solutions.
• Processes: Processes are based on other current technology, such as social networking, machine learning and artificial
intelligence to provide relevant information to a particular person. In this way, the Internet of Everything maximises the
potential of big data.
• The primary components of the Internet of Everything are hardware, software and services.
https://www.salesforce.com/eu/blog/2020/01/evolution-of-the-internet-of-things-and-internet-of-everything.html

Mobile
• Mobile technology is technology that goes where
the user goes. It consists of portable two-way
communications devices, computing devices and
the networking technology that connects them.
• Currently, mobile technology is typified by
internet-enabled devices like smartphones, tablets
and watches. These are the latest in a progression
that includes two-way pagers, notebook
computers, mobile telephones (flip phones), GPS-
navigation devices and more.
• The communications networks that connect these
devices are loosely termed wireless technologies.
They enable mobile devices to share voice, data
and applications (mobile apps).
• Mobile technology is pervasive and growing. The
number of smartphone users has climbed beyond
3 billion¹ and the global mobile workforce is
expected to reach 1.87 billion by 2022.²
https://www.ibm.com/topics/mobile-technology

5G is coming!
5G is the 5th generation mobile network. It is a new
global wireless standard after 1G, 2G, 3G, and 4G
networks. 5G enables a new kind of network that is
designed to connect virtually everyone and
everything together including machines, objects, and
devices.
5G wireless technology is meant to deliver higher
multi-Gbps peak data speeds, ultra low latency, more
reliability, massive network capacity, increased
availability, and a more uniform user experience to
more users. Higher performance and improved
efficiency empower new user experiences and
connects new industries.
• 5G is significantly faster than 4G
• 5G has more capacity than 4G
• 5G has significantly lower latency than 4G
• 5G is a unified platform that is more capable than 4G
• 5G uses spectrum better than 4G
https://www.qualcomm.com/invention/5g/what-is-5g

Projected impact of 5G
https://www.qualcomm.com/invention/5g/economy

Augmented Reality (AR)
Augmented reality overlays digital content and
information onto the physical world — as if
they’re actually there with you, in your own
space.
AR opens up new ways for your devices to be
helpful throughout your day by letting you
experience digital content in the same way you
experience the world.
It lets you search things visually, simply by
pointing your camera at them. It can put
answers right where your questions are by
overlaying visual, immersive content on top of
your real world.
https://arvr.google.com/ar/

Social Media
• Social media is a collective term for websites and
applications which focus on communication,
community-based input, interaction, content-sharing
and collaboration. Different types of social media are
normally dedicated to forums, microblogging, social
networking, social bookmarking, social curation,
and wikis are among the.
• Many individuals will use social media to stay in touch
and interact with friends and family, while others use it
to communicate with different communities. Many
businesses will use social media as a way to market and
promote their products. In addition, business to
consumer (B2C) websites include social components,
such as comment fields for users. Other tools have been
created to aid in tracking the number of mentions and
brand perception.
• Social media has become larger and more accessible
thanks to access to mobile applications, with some
examples of social media including Twitter, Facebook,
LinkedIn. (Techtarget)

Virtual
Reality (VR)
Virtual reality is the
use of computer
technology to create
the effect of an
interactive three-
dimensional world in
which the objects
have a sense of
spatial presence.
https://www.nas.nasa.gov/Software/VWT/vr.html https://blog.frontiersin.org/2020/02/05/to-the-frontiers-of-virtual-reality/

Tech Stacks
evolve!
https://chiefmartec.com/2018/01/marketing-tech-stack-evolve-time/

Digital Business Models
• Business Model
• Digital Business Model
• B2C
• B2B

What’s a Business Model?
HOW DOES A COMPANY WORK? HOW DOES IT RUN ITS
BUSINESS?
HOW DOES IT CREATE, CAPTURE
AND DELIVER VALUE?

All models are wrong!
All models are wrong, but some are useful! – George Box

Why do
we need a
Business
Model?
From: Digital Business Models – Bernd W. Wirtz, 2019

Evolution of Business Models

Business Plan
vs. Business
Model
https://www.businessmodelcompetition.com/general-information.html

Business
Model
Levels

Components
of a
Business
Model

Describing
a business
model
• Alexander Osterwalder
created Business Model
Canvas (BMC) as a visual
tool
• It is a simple and powerful
way to describe how a
company intends to make
money
• Nine blocks cover four
main area: customers, offer,
infrastructure and financial
viability.
https://www.123rf.com/photo_129012742_stock-vector-business-model-canvas-template-with-icons.html

Drivers of
Business
Model
Innovation

Stages of
Developmen
t in Digital
Business
Integration

Digital Business
Model (DBM)
Framework
• Digitization is compelling
companies to move their
business models on two
dimensions.
• They are moving from
controlled value chains to
more complex, networked
systems.
• They are moving from less
familiarity with customer
needs and life events to a
better, closer understanding
of them, resulting in better
customer engagement.
From: What’s Your Business Model? – Peter Weill and Stephanie L. Woerner

Ecosystem Drivers outperform!
Ecosystem driver: organizer
of an ecosystem, a
coordinated network of
enterprises, devices, and
customers to create value for
all participants, which is the
destination in a particular
domain (such as shopping),
ensuring great customer
service; includes
complementary and
sometimes competitor
products

Components of a Digital Business
Model
https://sloanreview.mit.edu/article/optimizing-your-digital-business-model/

Sources of
Competitive
Advantage in
Next-
Generation
Enterprises

Key
questions for
transformati
on in the
digital
economy
Threat: How strong is the digital threat to your business model?
Model: Which business model is best for your enterprise’s
future?
Advantage: What is your competitive advantage?
Connection: How will you use mobile technologies and the
internet of things (IoT) to connect and learn?
Capabilities: Are you buying options for the future and
preparing for the necessary organizational surgery?
Leadership: Do you have the leadership at all levels to make
transformation happen?

Digital
Business
Model
Innovation

A Businerss
Model
Innovation
Framework

B2C Digital
Business
Model:
4C-Net

Developing Hybrid Business Models

Drivers for
Developing
Hybrid
Business
Models

B2B Digital
Business
Models:
4S-Net

Assessing
Your Digital
Business
Model
https://sloanreview.mit.edu/files/2013/03/a0741a07b2.pdf

Success
Factors of
Digital
Business

From Pipes to Platforms…
Pipeline businesses create value by controlling a
linear series of activities—the classic value-chain
model. Inputs at one end of the chain (say, materials
from suppliers) undergo a series of steps that
transform them into an output that’s worth more:
the finished product. Apple’s handset business is
essentially a pipeline. But combine it with the App
Store, the marketplace that connects app
developers and iPhone owners, and you’ve got a
platform.
Shifts involve:
• From resource control to resource orchestration
• From internal optimization to external interaction
• From a focus on customer value to a focus on
ecosystem value

Network Effect
• AT&T Annual Report, 1908:
“A telephone — without a
connection at the other end
of the line — is not even a toy
or a scientific instrument. It
is one of the most useless
things in the world. Its value
depends on the connection
with the other telephone—
and increases with the
number of connections.”
• 70% of value in tech is driven
by network effect!
https://www.nfx.com/post/network-effects-manual/

Digital Organization
• Structure: What is the right organizational structure for
a digital transformation or business?
• Leadership: Which leaders should “own” digital (for
example, do I need a Chief Digital Officer)?
• Culture: What cultural mind-sets are important in a
digital transformation, and how can I build them?
• Operating model: How do I set up my teams’ operating
model to be more agile?
• Talent and skills: What digital talent do I need and how
should my HR processes be different for this population?
• Sequencing the journey: How do I get started on the
digital organizational change process? How fast should I
move? When are the most challenging phases?
https://www.mckinsey.com/business-functions/mckinsey-digital/how-we-help-clients/digital-organization

Changing nature of work…
If the nature of
work (“what we
work”) is
changing so
radically, could
the way we work
(“how we work”)
stay the same?

From Traditional to Lifelong
Learning…
https://www.researchgate.net/publication/306235068_Lifelong_learning_in_knowledge_society

Digital Skills
• Digital skills are defined as a range of abilities to use digital devices, communication applications,
and networks to access and manage information. They enable people to create and share digital
content, communicate and collaborate, and solve problems for effective and creative self-
fulfillment in life, learning, work, and social activities at large.
• Entry-level digital skills, meaning basic functional skills required to make basic use of digital
devices and online applications, are widely considered a critical component of a new set of literacy
skills in the digital era, with traditional reading, writing, and numeracy skills.
• At the advanced spectrum of digital skills are the higher-level abilities that allow users to make use
of digital technologies in empowering and transformative ways such as professions in ICT. Major
digital transformations such as Artificial Intelligence (AI), machine learning, big data analytics,
change skills requirements and, in turn, impact capacity building and skills development for the
21st century digital economy.
• To thrive in the connected economy and society, digital skills must also function together with
other abilities such as strong literacy and numeracy skills, critical and innovative thinking, complex
problem solving, an ability to collaborate, and socio-emotional skills.
https://en.unesco.org/news/digital-skills-critical-jobs-and-social-inclusion

Lack of Digital Skills…
• When questioned, the professionals revealed the ways
in which the digital skills gap is negatively affecting their
firm’s current performance:
• decreased productivity (56%)
• inability to implement time/cost-saving technology (47%)
• less agile/adaptable (43%)
• reduced competitiveness (41%)
• lower profitability (37%)
https://www.themanufacturer.com/articles/what-are-the-digital-skills-businesses-most-lack/

https://www.themanufacturer.com/articles/what-are-the-digital-skills-businesses-most-lack/

Global
• Globally, 85% of respondents said they need digital skills in their job, but 56%
said their skills need expanding and only 29% said their skills are sufficient.
• 78% of respondents in China and 70% in Bulgaria see a need to expand their
digital skills, in contrast to 42% in the USA, 42% in the UK, 43% in Germany.
• Only 32% of European respondents learned their digital skills at work or during
their studies, with 67% saying they had to teach themselves.
• 83% of Indian respondents and 76% in China get up to five or more hours of
digital training each week, compared to less than 50% in Western Europe.
• In China, 53% of respondents spend between one and five hours of their own
time per week improving their skills, with 14% spending longer. In Germany,
only 35% and 6%, respectively, would do the same.
https://www.vodafone-institut.de/studies/global-study-finds-that-56-of-employees-lack-the-digital-skills-they-need-for-jobs-in-the-future/

India
• The People Matters report highlights that 87 percent of
companies agreed that digital skilling is important for
the future. Despite this, 65 percent of companies
admitted that they do not have a clear roadmap to this
process.

T-shaped
https://joannekoosg.com/2017/09/01/vs-i-vs-t-vs-x-shaped-skills/

Why not?
https://devopsinstitute.com/2017/11/15/from-i-shaped-to-t-shaped-why-devops-professionals-need-to-be-multi-skilled/

Self-organizing teams
“Self-managing and self-designing
teams...when well designed and well
led, they can be a self-correcting and
renewable collective resource, an
organizational feature that builds
rather than expends human capital.
But when they go sour, they can do real
damage both to organizations and to
people. Managers who clearly specify a
team’s authority, and who make certain
that team members understand both
the extent and the limits of their
responsibilities, go a long way toward
making the former outcome more
likely than the latter.”
Source: Leading Teams: Richard Hackman

…leads to High Performance
http://www.stevedenning.com/Radical-Management/most-high-performance-teams-are-self-organizing.aspx

Social Alignment
• Improving Social Alignment During Digital Transformation -
Andrew Burton-Jones, Alicia Gilchrist, Peter Green, Michael
Draheim, Communications of the ACM, September 2020,
• Social alignment among groups of stakeholders occurs when
different stakeholder groups share understanding of a business
outcome and commit to the outcome and the means to achieve
it.
• We had a unique chance to learn answers to these questions
through our involvement in a longitudinal case study of a digital
transformation. The case involved the launch of one of Australia's
first large-scale digital hospitals, one of the most significant
organizational changes ever undertaken by an Australian health
service.
https://cacm.acm.org/magazines/2020/9/246940-improving-social-alignment-during-digital-transformation/fulltext

Research Findings
• We found in our research that the process of achieving social
misalignment involved four phases as did the process of
achieving social alignment. These processes were linked, such
that stakeholders moved through misalignment and alignment
in a non-linear fashion.
• When we studied the trajectory closely and mapped it out, we
noticed improvements in the trajectory due to practices that
managers adopted.
• We also noticed poor trajectories when managers enacted these
practices ineffectively or not at all.
• Through analysis, we identified three practices that help improve
social alignment—Ramping, Holding, and Peaking.

Ramping
Ramping practices accelerate alignment by getting
stakeholders to commit at a faster rate than they otherwise
would. Three practices appeared to improve Ramping. The
common idea underlying all three is that to commit early and
strongly, stakeholders had to believe the project
was credible—that it would go ahead and succeed. There was
a long history of failed IT projects in that region, and in EMR
projects globally. No one wanted to be part of a failure.
• Creating multifunctional teams with recognized leaders
• Motivating attention to operational matters as the foundation for
innovation
• Managing not avoiding risk

Holding
Holding practices maintain alignment in the face of pressures
to separate. Figure 2, where the second fall in the curve for
HoldThis is shown in ing falls slower and shallower than the
second fall in the Baseline curve. We observed three practices
that facilitated Holding at the hospital. The common idea
underlying all three is the transformation was now owned by
the business and the business needed to partner with IT to
"bed down" and improve the system. In short, these practices
gave the motivation and the structures to stay together.
• Adjusting governance structures
• Reallocating funding and resources
• Managing expectations and knowledge-sharing

Peaking
Peaking practices increase alignment to even higher levels. This is
shown in Figure 2, where the second rise in the curve for Peaking
rises higher than the corresponding rise in the Baseline curve. To
achieve peaking required team members to be more able and
motivated than previously. When we observed practices that
facilitated Peaking, the common factor was that they related to the
base of the pyramid in Figure 1—connection and respect.
Connection gave teams a common identity and motivation and
facilitated mutual learning that enabled members to perform to
even higher levels, while respect enabled staff to put differences
aside, trust each other, and focus on achieving the best solution
possible.
• Co-locating teams
• Getting the right people at the right time in the right roles
• Understanding the 'why?'

Ambidextrous Organization
• To flourish over the long run, most
companies need to maintain a variety of
innovation efforts. They must constantly
pursue incremental innovations, small
improvements in their existing products and
operations that let them operate more
efficiently and deliver ever greater value to
customers.
• Companies also have to make architectural
innovations, applying technological or
process advances to fundamentally change
some component or element of their
business.
• Finally, businesses need to come up
with discontinuous innovations—radical
advances like digital photography that
profoundly alter the basis for competition in
an industry, often rendering old products or
ways of working obsolete
https://hbr.org/2004/04/the-ambidextrous-organization

Three Box Solution
In his seminal book The Three-
Box Solution, Vijay Govindarajan
offered an amazingly simple
and highly effective framework
for leading innovation:
• Execute the present core
business at peak efficiency (Box
1)
• Avoid the inhibiting traps of past
success (Box 2)
• Build a future day by day
through breakthrough
innovations (Box 3)
http://www.3boxsolution.com/book/

Open
Innovation
“In the new model of open
innovation, a company
commercializes both its own
ideas as well as innovations
from other firms and seeks
ways to bring its in-house
ideas to market by
deploying pathways outside
its current businesses. Note
that the boundary between
the company and its
surrounding environment is
porous (represented by a
dashed line), enabling
innovations to move more
easily between the two.”
https://sloanreview.mit.edu/article/the-era-of-open-innovation/

Closed vs. Open Innovation
https://sloanreview.mit.edu/article/the-era-of-open-innovation/

Organization Design (OD)
• Organization Design sets out to answer the question, ‘What
is the best way to organize a group with a shared purpose to
get things done and achieve its strategic intent?’ The aim of
organization design is to find the optimal form for an
organization to maximize its performance. Form is much
more than structure; organizations need to be viewed
holistically with many more dimensions considered and kept
in alignment. If not enough change is made across these
dimensions the desired progress will not be made.
• Organization Design: A guide to building effective
organizations by Patricia Cichocki and Christine Irwin ?(2011)

Galbraith’s Star Model
Jay Galbraith developed his "Star Model™"
framework for analyzing organizations in
the 1960s.
“The Star Model™ framework for
organization design is the foundation on
which a company bases its design choices.
The framework consists of a series of
design policies that are controllable by
management and can influence
employee behavior.
The policies are the tools with which
management must become skilled in
order to shape the decisions and
behaviors of their organizations
effectively.”
https://www.jaygalbraith.com/images/pdfs/StarModel.pdf

Implications of Star Model
• The Star Model™ shows the levers that managers can
control, and as a result, can affect employee behavior. By
choosing the desired behavior, managers can influence
the organization's performance as well as its culture.
• Implications of the Star Model™:
• Organization design is more than just structure
• Different strategies lead to different organizations
• For an organization to be effective, all the policies must be
aligned with one another
https://www.jaygalbraith.com/services/star-model

Organization Design affects
Behavior and Culture…
“Different strategies
lead to different
organizations.
Although this seems
obvious, it has
ramifications that are
often overlooked. There
is no one-size-fits-all
organization design
that all companies–
regardless of their
particular strategy
needs–should
subscribe to.”
https://www.jaygalbraith.com/images/pdfs/StarModel.pdf

The Reconfigurable Organization
https://www.jaygalbraith.com/component/rsfiles/download?path=whitepapers%252Freconfigurableorg.pdf

Holacracy
• Holacracy is a new way of structuring and running your
organization that replaces the conventional management
hierarchy. Instead of operating top-down, power is
distributed throughout the organization – giving individuals
and teams freedom while staying aligned to the
organization’s purpose.
• HOW ARE HOLACRACY-POWERED ORGANIZATIONS
DIFFERENT?
• THEY’RE PURPOSE-DRIVEN
• THEY’RE RESPONSIVE
• THEY USE EXPLICIT “RULES OF THE GAME”
• THEIR ROLES & RESPONSIBILITIES ARE TRANSPARENT
https://www.holacracy.org/explore/why-practice-holacracy

https://www.mountaingoatsoftware.com/blog/holacracy-and-the-search-for-agile-organization

Designing a Holacratic
Organization…

Any many many more…
• Requisite Organization
• Sociocracy
• Beyond Budgeting
• Teal Organization

Continuum of Leadership Behavior
https://hbr.org/1973/05/how-to-choose-a-leadership-pattern

Digital Culture
• Organizations that
focus on transforming
culture and building
capabilities during a
transformation are 2.5
times more likely to
succeed. (McKinsey)
https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/culture-for-a-digital-age

https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/culture-for-a-digital-age

Core Elements of a Digital Culture
A digital culture empowers people to deliver results
faster. Digital organizations move faster than traditional ones,
and their flatter hierarchy helps speed decision making. A
digital culture serves as a code of conduct that gives
employees the latitude to make judgment calls and on-the-
spot decisions.
• It promotes an external, rather than an internal, orientation.
• It prizes delegation over control
• It encourages boldness over caution
• It emphasizes more action and less planning
• It values collaboration more than individual effort
https://www.bcg.com/publications/2018/not-digital-transformation-without-digital-culture

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