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How the Digital Renovators are Racing Ahead

 

How the Digital Renovators are Racing Ahead

Regu Ayyaswamy
Vice President and Global Head, Internet of Things (IoT)
Suranjan Chatterjee
Global Head, Cloud Apps, Microservices & API-fication, TCS
Dinanath Kholkar
Vice President & Global Head, Analytics
P R Krishnan
Executive Vice President & Global Head, Enterprise Intelligent Automation, TCS

Numerous studies show that the majority of large, established companies are in the midst of sizable digital initiatives to overhaul their businesses: revamping key functions like marketing, sales, and operations; introducing new digital products and services; and, in some cases, a rethinking of the entire business model. Many of these incumbent industry players are in reactive mode. They are trying to fend off a flood of so-called ‘born- digital companies’: those firms launched over the last two decades as Internet-enabled enterprises.

Digital business transformation is clearly an imperative. It is one of the top three priorities for 2018 in 11 out of 15 industries, according to a Gartner survey of 3,160 CIOs across 98 countries.1 CIOs from the banking and investment services, telecom, and government sectors indicated that digital business is their number one objective this year. “Forty-seven percent of CEOs said they are being challenged by the board of directors to make progress in digital business, and this enterprise-wide focus on digital is also being felt by CIOs across industries,” says Gartner research VP Jan-Martin Lowendahl.2 The shift to digitally-driven products and services is only intensifying, according to Gartner’s 2018 CEO Survey.

• 63% of CEOs said that they are likely to change their business models between 2018 and 2020.

• CEOs expect digital revenue to grow 10.3% at a compound annual rate between 2017 and 2020.3

• International Data Corp. predicts spending on digital initiatives will grow to close to $1.3 trillion in 2018 and surpass $2.1 trillion by 2021.4

Despite the prioritization of and investment in digital transformation, a great many of these efforts are falling short of expectations. Success is the exception, rather than the rule. Just 5% of global companies had met or exceeded their digital goals, according to a 2017 Bain and Company survey of more than 1,000 companies—less than half the success rate for conventional transformations.5 Nearly half of 2,000 executives surveyed by McKinsey & Co. in 2016 said their digital initiatives had poor results, with returns of 10% or less.6

The reason many companies fail in their digital transformation is not complacency. They clearly understand that they’re operating in a disrupt-or-be-disrupted era. Rather, it’s a failure of imagination. Instead of innovating, many businesses are imitating digital native firms—and failing in their attempts. Born-digital companies have a number of unique advantages that existing companies can never emulate. They have few existing products, services, or business models to slow them down and don’t have to cannibalize existing— and often profitable—lines of business to pursue promising new opportunities. They aren’t burdened by legacy thinking and behaviors, and instead can approach problems with fresh mindsets and approaches. They don’t have armies of employees who must be retrained for the digital era. Instead, they enlist the talent they need and build entirely different cultures. They aren’t saddled by legacy information systems and disconnected data that can hinder connection and collaboration. They can start from scratch, building a brand from the ground up rather than trying to shift the market’s perception of them.

Some long-standing companies, however, are seeing significant benefits from the digital transformation. Rather than mimicking digital upstarts, these companies seized upon the transformational potential of technology early. They saw the need to make fundamental changes in their business models, operations, leadership, and culture long before their competition— in some cases, even before digital natives began to nibble away at their market share.

They saw the need to make fundamental changes in their business models, operations, leadership, and culture long before their competition...”

We call these established companies ‘digital renovators.’ They have been key but largely unsung heroes in the Business 4.0 landscape of digital transformation during the last few years. They include health care giant CVS Health, Walmart, Best Buy, ING, and a number of other firms. Their stories have often been underplayed while the Amazons, Ubers, Airbnbs and other digital natives have hogged the spotlight.

Yet the practices of the digital renovators provide just-as-valuable lessons for other established companies in how to successfully transform their businesses to not only keep up with, but also outpace the born-digital competition. In some ways, their practices are more instructive for large and long-established companies, which can be burdened in a digital age with outdated assets, cultural habits, skills, and other vestiges of the pre-digital era.

Reborn Digital

The biggest inhibitor to progress in digital transformation is “lack of appropriate talent and capability in the workforce,” according to a 2018 Gartner survey on digital initiatives. Of those companies that had launched digital initiatives, 42% said they needed significant or deep cultural change over the next three years.7

Established companies can’t simply adopt the born-digital playbook and expect transformation. They must develop their own strategies and road maps for digital reinvention, looking not at the Facebooks and Googles of the world, but to established companies that have successfully been reborn digital.

These companies span industries—from retail and financial services to airlines and industrial manufacturers. They all had the foresight to look outside the way they had always done things to embrace the opportunities of digital technologies before they became threats.

They broadened their perspectives, looking at the new digital ecosystems in which they could play a leadership role. They recognized early the changes they had to make and realized that they often had to create new digitally-enabled business models to succeed. They did not wholly abandon what had made them successful in an ill-guided attempt to emulate digital native companies. Instead, they identified their most valuable assets—their customer data and relationships, their geographic footprint, global supply chains, existing information systems, brand value—and amplified them with new digital approaches. They embraced agile ways of working to design new business systems, processes, and operating models. They demonstrated a commitment to experimentation and continual learning. And they exhibited strong change management, enlisting employees in driving digital change.

Digital Renovators in Action

While such fundamental transformation takes time, the results have been far from incremental. These digital renovators made big bets early on about the prospects for their organizations adapting in their quickly evolving industries and what unique role they might play in those digital futures—and are already seeing returns.

To be sure, each of these digital renovators developed their own unique digital transformation strategy, we found seven elements that helped them succeed. Established companies that want to successfully transform the enterprise recognize that the status quo can’t hold and that insular thinking and behavior will only breed complacency. Bringing the outside in is a great way to create the sense of urgency needed for transformation, according to best-selling author and leadership consultant John Kotter.8

Digital renovators were not necessarily flailing when they began to look beyond themselves. However, they recognized that what got them to where they were would not necessarily get them where they needed to go. In order to overcome legacy thinking, they brought new leaders into the executive ranks—often from born-digital companies. They tapped into the expertise of thought leaders in academia and industry to change their mindsets and get the leadership team primed to make big bets. They worked with leading consultants and ‘applied futurists.’

 

CVS Health. More than a decade ago, leaders at CVS Health, a U.S.-based drugstore and retailer, recognized that the company could not continue to grow as simply a traditional drugstore. The specter of Amazon.com entering prescription pharmaceutical sales loomed large for years, but the company did not wait to act. Nor did it attempt to simply out-Amazon Amazon—an impossible feat. Instead, it forged its own digital plan. “Our strategy starts with being part of the digital ecosystem,” says Brian Tilzer, CVS’s chief digital officer who oversees its Digital Innovation Lab.9 The $184 billion company is shifting from a traditional pharmacy into a key provider of health services, both in stores and within its customers’ homes and lives. In 2006, CVS purchased a pharmacy benefits management company as well as a fast-growing chain of health care clinics it could locate in its retail stores—a service that a digital-only drugstore could not touch.10,11 By 2017, its more than 1,100 Minute Clinics had recorded more than 37 million patient visits. In 2018, the company bought health insurance giant Aetna for $69 billion.12

ING. In 2013, European bank ING embarked on its own digital transformation with a ‘customer-centric purpose,’ according to CEO Ralph Hamers. “It’s about empowering people to stay a step ahead in life and in business.”13 The $17 billion bank announced in 2016 that it would spend nearly $1 billion on digital transformation efforts over the next five years, naming its chief operating officer Roel Louwhoff as chief transformation officer. A decade on from the financial crisis, ING has the number one Net Promoter Score for retail banking in seven countries. The company believes it achieved this score by offering a differentiated customer experience in an increasingly commoditized industry—one that goes beyond the borders of the banking industry. “It’s connected to the other platforms and ecosystems where consumers spend most of their online time, providing easy access to financial services where and when users need them,” says Hamers.

Air France-KLM. As with other digital renovators, the delivery of high-quality customer experiences is driving Air France-KLM’s embrace of mobile, cloud, big data analytics, and wearable technologies as it transforms to a digital organization. The company replaced its legacy network, with a superfast intelligent network across 170 sites to power mission-critical systems such as passenger check-in, flight operations, and departure control applications.14 A data platform to enable a 360-degree view of its customers underpins more targeted, timely, and tailored customer interactions.15 It was the first airline to use artificial intelligence to manage the increasing volume of interactions with customers over social media channels.16 The airline also developed its own predictive analytics tool to identify potential problems and schedule repairs on aircraft and engines before they break down. Doing so avoids costly, unplanned maintenance.17

Mitsubishi Hitachi Power Systems. Power generation company Mitsubishi Hitachi Power Systems has taken advantage of Internet of Things (IoT) technologies and artificial intelligence to keep the gas turbines that drive power plants up and running. The company began running remote monitoring centers in 1999 to track turbine operations, which have now accumulated two decades worth of historical operating data. Combining that with IoT sensors and machine-learning algorithms, the company can now offer its customers predictive maintenance alerts and intelligence on how to operate their plants more effectively, competitively, and safely.18

Walmart. Walmart may be the world’s biggest retailer but it must compete with digital trailblazer Amazon and other online merchants. In 2016 it acquired online retailer Jet.com for around $3 billion and made the company’s CEO Marc Lore the chief executive of its digital commerce business, which includes overseeing a voice technology partnership with Google Home and a number of additional e-commerce acquisitions. Lore also has emphasized the importance of customer centricity, making the customer experience and customer care departments report directly to him.19,20 For its most recent year-end report, Walmart noted its e-commerce sales grew by 44%.21

So what did these companies do right? How did these digital renovators survive and actually thrive in an era in which many digital native companies have ripped up industries and toppled once-mighty leaders from their perches?

From our research and client experience, seven moves appeared time and again— themes that differentiated the successful digital renovators from the fading stars:

1. They viewed the broader ecosystem of opportunities, partners and competitors

2. They embraced radically different business models

3. They embraced agile methods of developing software, and updating their entire business operations

4. They pursued narrow but lucrative niches

5. They identified key assets others viewed as legacy burdens— and then built on them

6. They conducted purposeful and powerful experimentation

7. They mastered organizational change

We now take a look at each of these moves, and illustrate them with real examples.

1.Tapping the Greater Digital Ecosystem

Companies that succeed in their digital transformations look at the world not simply from the perspective of their own company or even their own industry. They look at the larger digital ecosystem in which they operate and make investments to stake their claim within it.

Nokia, for example, in its transformation from a mobile phone and network provider into a full-service network infrastructure provider, has taken an ecosystem approach and is now innovating in such areas as virtual reality and digital health.22 It offers a wide range of opportunities for companies and individuals to get involved in its vision of a ‘connected world beyond borders.’23

Microsoft sees itself not just as a software player, but part of a larger digital business ecosystem. The once insular company bought digital business networking company LinkedIn (tapping CEO Reid Hoffman for Microsoft’s board) and recently stated that its partners would be at the center of its $4.5 trillion transformation opportunity.24,25

2. Embracing New Business Models

Digital renovators realize that a one-size-fits-all business model is insufficient for the digital age, often establishing a portfolio of business models that expand or change over time. Digital technologies enable companies to reimagine every aspect of their business—but only if they are capable of experimenting with them and rolling out those that have real value.

CVS, for example, has expanded beyond retail to health services. “We think of it as creating a new front door to health care in America,” CVS CEO Larry Merlo told The New York Times.26 In April 2018, CVS Health announced it was working to make a new digitally enabled and monitored medical device that it hoped would increase the number of consumers who could do kidney dialysis in their homes. “We are basically taking health care closer and closer into the community. Digital is going to bring it into the home. It’s also putting the patient in control, in a way that wasn’t possible before,” says CVS Chief Digital Officer Tilzer said. “We’re trying to weave digital into every aspect of our operations and business model.”27

Industrial manufacturers Rolls-Royce and Michelin are deploying sensors to implement digital business models. By collecting data generated by IoT sensors and analyzing it using machine-learning algorithms in the cloud, Rolls-Royce has gained in-depth insight into the real-time performance of its jet engines, power generation systems, and marine turbines. It has built a new business of aftermarket services “from showing airlines how to optimize their routes to keeping a survey ship in position in heavy seas.”28 Similarly, Michelin has transformed its tire business into a service business. Using IoT sensors inside vehicles to collect data, like fuel consumption, tire pressure, temperature, speed, and location to be analyzed in the cloud, Michelin offers fleet operators recommendations and training to lower costs and improve efficiency.29

Even born-digital companies continually seek out new business model opportunities. Amazon, of course, broadened its business model from online book retailer to multi-category online retailer to cloud services provider (AWS), grocer, and more. Google evolved from an Internet search engine company to online advertising provider to mobile phone provider to cloud provider and now driverless vehicle supplier.

3. Going Agile All Over (Not Just in Software Development)

Digital renovators understand that the IT organization is the engine that powers their ongoing digital transformations. As a result, they have been early adopters of both agile development and DevOps practices to accelerate the delivery of new systems and innovation in a more streamlined, automated, and iterative fashion.

Air France-KLM CIO Jean-Christophe Lalanne says that implementing agile and DevOps practices within the company’s 200 product teams is driving innovation as the airline experiments with such technologies as IoT, AI, and augmented reality. “The aim is to develop a minimal viable product to serve a business case,” he says. “The role of IT is to maximize platform sharing, data sharing, APIs and the web services that allow consistency across different products and which are absolutely critical to the success of digital transformation.”30

Digital transformation, however, is about more than just technology. Digital renovators abandon sequential, siloed, and bureaucratic methods in favor of agile approaches across the business to designing new business processes, products, services, and business models.

ING CIO Ron Van Kemenade is a firm believer in agile methods and his DevOps teams are evolving toward a state of continuous delivery. The goal is more than just faster software deployment or more frequent mobile app functionality releases. ING is now planning to roll out the agile approach across the entire company. “It’s about culture and behavior as well,” says Van Kemenade. “It’s about a way of working. How do you create an agile organization that is actually able to learn from customer behavior, to be responsive to that, to have the fail-fast mentality … and if you’re not successful, try and improve it?”31

4. Expanding into Underserved Yet Lucrative Niches

A key move we have seen frequently used by successful digital renovators is shifting from offerings that address broad needs to narrow products and services catering to niche needs. Two companies come to mind here: Nikon and Garmin. To get there, they considered the needs and problems of the end user—both before and after they become customers. Then they create more valuable and differentiated offerings and experiences in the face of increased commoditization.

Take camera maker Nikon. The market for digital single-lens-reflex cameras (DSLRs) has fallen dramatically in recent years as amateur photographers opted to stick with their smartphones for photography.32 While Canon dominated this shrinking market for the last 14 years, Nikon opted to focus on the higher-end-professional market instead. Understanding the needs of its advanced and professional users, the $7 billion company took the number one spot for market share and sales in the full frame digital cameras with interchangeable lenses (DCIL) category.33

Or consider Garmin, the $3 billion navigation system manufacturer whose operational headquarters are in the U.S. and parent company is in Switzerland.34 In the 1990s, it was a pioneer in the market for automobile GPS devices for cars, which at one point accounted for nearly three quarters of the firm’s revenue. Then along came the smartphone in 2007 which, when paired with a navigation app, threatened to put Garmin out of business. Sales plummeted by nearly $1 billion in three years, and the company lost nearly 90% of its market value.35

But while it no longer owns the market on automobile navigation, Garmin has pivoted quickly since 2013 to design wearable navigation devices for distinct market sectors—golfers, runners, bikers, swimmers, hikers and more. The company made the shift because it saw writing on the wall: that the smart phone makers would apply their embedded GPS devices for mainstream uses such as driving cars and walking. The niches were where Garmin could thrive by tailoring its GPS to the demanding needs of different outdoor customer segments.

By 2017, Garmin’s annual revenue surpassed $3 billion—returning to the level it had been in its glory days of 2007.36i And it’s highly profitable once again, with 22% operating margins last year.37 Garmin’s niche strategy and organizational model are its key competitive differentiators.

5. Identifying—and Amplifying—Assets

In digital transformation literature, legacy is often used pejoratively. Much is written about the existing systems, processes, and business models that are said to stand in the way of moving toward a digital future. Digital renovators, however, look at their existing portfolios differently, envisioning how to overcome burdensome aspects of the business and identifying key assets worth building upon with their digital plans. They see legacy as an asset, whether it is their global supply chain, their customer data and relationships, their geographic footprints, their existing information systems, or their brand value.

Big box retailer Best Buy is another example of a successful digital shift. Best Buy easily could have folded in the face of digital pressures—particularly Amazon’s entry into consumer electronics. Instead, the $42 billion company is thriving thanks to a renewed focus on customer service and turning its brick-and-mortar footprint into a key aspect of its digital strategy. The company turned its 1,000-plus stores into mini warehouses that can get products (now priced competitively) quickly to customers. As of September 2017, about 40% of online orders were shipped or picked up from Best Buy’s stores.38

Data—and lots of it—on customers, products, and services can also give digital renovators a leg up on their younger competition. CVS Health has an enormous amount of data on consumers’ health, from retail transactions (5 million customers a day), prescriptions filled (2.5 billion a year), its pharmacy benefit management business (94 million members), its in-store clinics, and soon its health insurance business. ING Bank mines its growing troves of customer data to reshape its customer experiences, its financial products and services, and its future business models.

The digital renovators also know they must capitalize on key assets that exist outside their four walls: the abundance of capital, talent and capabilities. Investors favor companies that paint a compelling vision of the future, and are run by leaders with strong character and the boldness to pursue that vision. And while these companies need to employ highly skilled people, they must also be proficient at tapping into the enormous pool of skills and knowledge that can be crowd-sourced on the internet. As well, these organizations understand they must wire themselves into the capabilities of other companies—the business partners that increasingly are on the periphery of their industry, not inside of it.

Looking broadly at the capabilities they need to win, senior executives of these digital renovators do not regard themselves as being in a narrow industry—a limiting notion that blindsides managers with tunnel vision. Rather, they see themselves as being in a larger digital ecosystem of competitors, partners, and customers. For example, Ford Motor Co. defines its vision as “making people’s lives better through automotive and mobility leadership”39—i.e., providing products and services that get people from one place to another, whether that’s through self-driving vehicles, renting shared vehicles on demand, or some other offering. That’s a much bigger strategic canvas for Ford than its prior one of building attractive, high-quality cars and trucks for people to drive.

6. Promoting Purposeful and Powerful Experimentation

The best digital renovators are grounded in relentless experimentation and execution. They create the kind of organizational structures that enable them to test new digital processes, products, and business models, learning from those attempts that don’t work and scaling those that do. Their executives and business units are open-minded and curious—and willing to take on both opportunities and risks, even when that means overcoming the fear of cannibalization. In fact, rather than fear risk, they embrace it because they know that a risk-mitigation mindset puts a damper on innovation.

In the midst of what a recent Wired article called “the biggest strategic shift in the paper’s 165-year history,” The New York Times embraces what its deputy publisher described as “endless waves of experimentation.”40 In recent years, it became clear that digital advertising alone would not be enough to pay the bills, let alone fuel growth in the future. In an effort to transform the Times’ digital subscriptions into the driving force of its business, the company is investing heavily in its core capability— the highest-quality journalism—while continuously expanding its new digital capabilities and services, from personalized fitness advice and intelligent newsbots to virtual reality films. The goal is to become so ingrained in its readers’ increasingly digital lives that The New York Times is indispensable.

Or look at hotels. As Airbnb has shaken up what was a seemingly stalwart hospitality industry with a new type of business and a new type of market segment, Marriott International has thrived by placing bold bets and integrating a host of digital products and services to appeal to new and growing customer segments. By last May, nearly a third of the company’s record $17 billion in revenue was made via digital channels according to George Corbin, the company’s senior vice president of digital.

“Ultimately, what you need to consider is the fundamental shift that is occurring in customers’ needs and expectations. It is the job of any company, ours included, to ensure that we are adapting to the customer,” Corbin says, noting that Marriott has grown from a 12-brand company to a portfolio of 30 in recent years. “This shift in needs and expectations means that we have to change the product, change the service, and continue to evolve.”41

Marriott has focused significant attention on mobile testing and roll-out. Services like mobile check-in and check-out, mobile service requests, keyless experiences, and experiments in the areas of mobile food and beverage are all geared toward customers’ needs. “The bottom line is, as long as you keep listening to your customers, and that is something that we do religiously, you will get the same cues as anybody else who is entering the industry,” Corbin says. “Then it comes down to, can you adapt? Can you adjust?”

7. Mastering Organizational Change

Adaptability is hardly a given. Digital renovators must have stellar organizational change capabilities to introduce and sustain digital transformation. Employees at all levels must live with uncertainty and adjust to a dynamic environment. The human aspect of digital change is critical—and often overlooked.

“If a company is adapting, they are trying to change their operating model, and that touches everything,” says Marriott’s Corbin, who spends 70% of his time on change management and transformation activities. “A CDO has to be able to drive a change effort forward across multiple parts of the organization, not just the so-called digital part or the IT part. Most of change management is much bigger than technology. Technology is one of the ten things that you have to get right to get transformation right,” he says. “The necessary soft skills are: How do you build coalitions? How do you develop talent and teams? How do you communicate? CDOs have to be able to communicate with impact, it is the seven times seven rule; you have to tell people seven times in seven different ways why we are going in this new direction.”42

In addition to communication, digital renovators benefit from enlisting the active participation of ecosystem partners. For example, as GE has progressed in its ongoing transformation from an industrial company to a digital one, it has needed everyone— employees, partners and suppliers, even customers—to buy into the new vision.

Cate Gutowski, vice president of GE’s ‘Digital Thread’ initiative, a set of interconnected technologies that will enable the $122 billion company to be more responsive to customers and market trends in the Industrial IoT ecosystem, says collaboration is key. GE brought people in from different levels of management, functions, and business units to devise and launch the program. To succeed, companies must “make change a groundswell, not a mandate,”

Gutowski says, noting that an initiative simply won’t work if it is only mandated and directed from the top down. She adds: “When ideas originate from the bottom up, they tend to gain more traction and get stronger buy-in.”43

For a digital sales transformation, for example, GE crowdsourced ideas and had its 7,000 sales professionals vote on them and help build the product roadmap. Technology teams and domain experts work together early and often to ensure high user adoption. That’s the only metric that matters in the digital age, according to Gutowski. “Technology can’t do this alone. They need partners with a deep understanding of the function so we can ensure that whatever we build delivers high user adoption,” says Gutowski. “Companies that crack the code on enabling rapid, real-time collaboration will be the ones that innovate faster and win with customers.”

Overcoming the Obstacles to Digital Transformation

Much of the attention in the digital era has been on the Davids-turned-Goliaths of digital industry who were into this era and rose to dominance, or on the newer digital upstarts poised to disrupt industry incumbents. It is perhaps an easier—or sexier—story to tell.

After all, fundamentally changing people, process, and technology in a decades-old company takes significant time, effort, and resources. The odds are seemingly stacked against transforming existing entities. They’re built for stability, not innovation. They’re slow and inflexible. Their legacy systems, people, and processes can hold them back.

Yet, it is possible. There are instances of successful digital transformation within traditional companies in nearly every industry today. And their narratives—of digital renovation and how to achieve it—have more value to the vast majority of enterprises than those of the digital natives. They offer a digital transformation playbook for the rest of us.

Others can follow their lead by taking actions that increase the likelihood of a successful and sustained digital transformation, including:

Lead with transformation. Digital disruption should not be left to the digital natives. Companies that want to remain competitive in the years ahead will have leaders who embrace digital opportunity—or bring in new executives that do. They will harness data and intelligence to get better views about operations, to make them more efficient, to understand customers better, to increase employee engagement, and to recognize both opportunities and threats on the horizon.

Expand the playing field. Digital renovators reimagine business’ strategy within the bounds of broader ecosystems. They explore new ways to work with existing ecosystems or create their own, identifying and adopting the emerging and enabling technologies required to do so.

Take a portfolio view of business models. It’s become clear in recent years that no business model is safe from disruption. Digital leaders recognize this and are willing and able to expand and shift business models in a dynamic marketplace. Product companies expand into services. Industrial manufacturers become technology providers.

Turn “liabilities” into assets. Digital renovators seek out the value in their existing businesses—brand value, popular products and services, underappreciated customers or business units, corporate culture, legacy systems teeming with valuable data, brick-and-mortar operations—and incorporate them into their digital strategies.

Embrace agile approaches. IT organizations are increasingly adopting new approaches to technology innovation, development, and implementation. Digital leaders take an agile approach across the enterprise when designing new business systems, processes, and operating models.

Establish a culture of experimentation. Some companies, particularly young startups, can adapt quickly and experiment with new approaches. Within established companies, the primary focus is on existing products, services, and customers. Digital renovators must make a deliberate effort to test new ideas— often creating new processes for doing so—to ensure they are pushing their boundaries.

Put people first. Technology itself is only a small part of digital renovation. Those companies dedicated to long-term transformation invest in change management, enlisting employees in visualizing and driving the change.

Don’t wait. It’s always more beneficial in the long run to disrupt yourself before you are disrupted. A successful digital transformation requires the courage to take calculated risks before things get bad. Successful digital renovators made fundamental changes in their business models, operations, leadership, and culture before they had to—and those seeking similar results will do the same.

 

1 Gartner, Smarter With Gartner, “Is Digital a Priority for Your Industry?”, March 6, 2018, accessed May 22, 2018 https://www.gartner.com/smarterwithgartner/is-digital-a-priority-for-your-industry/

2 Ibid.

3 Gartner, 2018 CEO Survey: CIOs Should Guide Business Leaders Toward Deep-Discipline Digital Business, Mark Raskino, April 6, 2018, accessed May 22, 2018, https:// www.gartner.com/doc/3870869/-ceo-survey-cios-guide

4 IDC, IDC Forecasts Worldwide Spending on Digital Transformation Technologies to Reach $1.3 Trillion in 2018, December 15, 2017, accessed May 22, 2018, https:// www.idc.com/getdoc.jsp?containerId=prUS43381817

5 Bain Brief, Orchestrating a Successful Digital Transformation, November 22, 2017, accessed May 22, 2018, http://www.bain.com/publications/articles/orchestrating-a-successful-digital-transformation.aspx

6 Digital/McKinsey Insights, Reinvention Through Digital, July/August 2017, accessed May 22, 2018, https://www.mckinsey.com/~/media/McKinsey/Business%20Functions/McKinsey%20Digital/Our%20Insights/Digital%20McKinsey%20Insights%20Number%201/Digital%20McKinsey%20Insights_Issue%201.ashx

7 Gartner, 2018 CEO Survey: CIOs Should Guide Business Leaders Toward Deep-Discipline Digital Business, April 6, 2018, accessed May 22, 2018, https://www.gartner.com/doc/3870869/-ceo-survey-cios-guide

8 HBR Webinar, Four Ways to Increase the Urgency Needed for Change, April 15, 2009, accessed May 22, 2018, https://hbr.org/2009/04/four-ways-to-increase-the-urge.html

9 Innovation Leader, How New CVS Digital Lab Proves Value, Collaborates with Business Units, accessed May 22, 2018, https://www.innovationleader.com/cvs-health/?print=pdf-search

10 The New York Times, CVS to Buy Caremark in All-Stock Deal, November 1, 2016, accessed May 22, 2018 https://www.nytimes.com/2006/11/01/business/01cnd-drug.html

11 CVS, Minute Clinic History, accessed May 22, 2018, https://www.cvs.com/minuteclinic/visit/about-us/history

12 The New York Times, CVS to Buy Aetna for $69 Billion in a Deal That May Reshape the Health Industry, December 3, 2017, accessed May 22, 2018, https://www.nytimes.com/2017/12/03/business/dealbook/cvs-is-said-to-agree-to-buy-aetna-reshaping-health-care-industry.html

13 Global Finance, Best Bank In The World: Q&A With ING CEO, April 15, 2015, accessed May 22, 2018, https://www.gfmag.com/magazine/october-2017/ing-best-global-bank

14 Computer Business Review, Air France-KLM Readies for Emerging Market Take-off with Tata Communications Digital Transformation Deal, April 5, 2016, accessed May 22, 2018, https://www.cbronline.com/cloud/air-france-klm-readies-for-emerging-market-take-off-with-tata-communications-digital-transformation-deal-4856794/

15 Talend, Air France-KLM: Change is in the Air to Delight Customers with “made-just-for-me” Travel Experiences, January 6, 2017, accessed May 22, 2018, https://www.talend.com/blog/2017/01/06/air-france-change-air-delight-customers-made-just-travel-experiences/

16 Forbes, Artificial Intelligence From Salesforce Partner DigitalGenius To Boost KLM Customer Service, October 5, 2016, accessed May 22, 2018, https:// www.forbes.com/sites/gilpress/2016/10/05/artificial-intelligence-from-salesforce-partner-digitalgenius-to-boost-klm-customer-service/#67c4c69075e7

17 Journal-Aviation, AFI KLM Invests In Predictive Maintenance With Prognos, July 20, 2017, accessed May 22, 2018, https://www.journal-aviation.com/en/news/37580-afi-klm-e-m-invests-in-predictive-maintenance-with-prognos

18 Spectra, IoT is Helping Power Plants Run More Efficiently, November 16, 2017, accessed May 22, 2018, https://spectra.mhi.com/iot_is_helping_power_plants_run_more_efficiently

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