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After studying many digital transformations Michael Wade and his co-authors are ready to share the results of years of applied research into how to achieve successful digital transformation in their new book Orchestrating Transformation. Here Michael speaks about the 8 key elements that need to aligned and orchestrated in order to achieve success.
Michael is Professor Innovation and Strategy at the IMD Business School and Cisco Chair in Digital Business Transformation.
So when we looked at lots and lots, dozens and dozens of transformation journeys we tried to figure out what are the key elements that need to be aligned and orchestrated in order to successfully transform? And we came to the conclusion there’s actually eight distinct elements that need to be considered to successfully transform. We divided these into three sections.The first section is a go-to-market section. This contains two instruments – the first of those is the ‘offering’. What is it that you’re offering to your customers? What is your product or service and ask yourself, “Is it really the right one in order to compete effectively in the future?”.The second instrument is the channel: How you get those products and services to your customer? Other new ways of doing it, different ways that are perhaps better than in the past and what are they?The second section is the engagement section and the engagement section really deals with how you interact and engage with three key stakeholder groups. The first is your customers, the second is your employees, and the third one is your partner. Are you engaging with them in the most effective way? Can you use digital tools and technologies to engage with them in new ways or different ways?And the third section is the organization section and here again, there are three instruments. The first one is structure – how you organize your functions, markets, geographies. Do they make sense? Are they holding you back in your transformation? How could you more effectively structure yourself?
The second one is incentives. How are you rewarding your people? Often we see in fact, that the incentives are not considered in a transformation and yet people are motivated by rewards and if you reward them in the wrong way they’re probably not going to change.The final instrument in the transformation orchestra is culture. Culture and mindset. Do you have the right culture in order to go forward and make your transformation a success? Now all these instruments form together the transformation orchestra and we use the orchestra metaphor for a very specific reason. If you go to an orchestra and you see one instrument playing – let’s just say that it’s played beautifully, but after a while, it gets kind of boring, it’s not really enough just to hear one. So you need to hear multiple but if you have many instruments in an orchestra and they’re all playing – let’s say they’re playing beautifully but they’re all playing their own tune, it sounds horrible.So the task of orchestration is really to manage the instruments, the parts across your value chain in a way that’s consistently and together achieving some kind of objective that you set up for yourself. And this is the core challenge of orchestration.
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