Strategic Management in the Age of Digital Transformation
The Editor’s Perspective – Professor John Metselaar
The Digital Transformation is in full swing, whether we like it or not, recently further accelerated by the Covid crisis. For companies to survive or even thrive in the new world they have an urgent need to make critical adjustments to their business and organization, and ultimately to (constantly) reinvent themselves. It requires a fundamental re-evaluation of their strategies, and how they go about implementing them.
Sound strategy management starts with a thorough understanding of the forces at play around us, which, in this case, means a deep understanding of arguably the most impactful one – Digital Transformation.
This book, “Strategic Management in the Age of Digital Transformation”, is a compilation of analyses and overviews by thought-leaders and practitioners in the field. It represents, together, a landscape of important dimensions of what Digital Transformation is, its potential, its challenges and watch-outs, and how it can be tapped to achieve new strategic goals.
Late last year I was asked to be editor of this book. Disclosure: it’s my first time. Of possible reassurance is that I’ve done a lot of writing in my life, mostly in my almost 30 years career Procter & Gamble – a company with a reputation for the quality of its writing to allow business decisions to be made with highest quality and appropriate expedience all around the world. In my new life post-P&G as professor of management practice in “leading & living innovation” I have continued to leverage the acquired skill and I am honored to be offered this new opportunity in the field but in the different dimension of editing.
I have reviewed a (larger) set of submissions from both academics and business leaders, selected the seven chapters you’re finding here, and helped the writers sharpen their message to make it resonate with you, the audience. I have attempted to combine and structure the individual chapters received from all around the world into a coherent ensemble with a narrative that flows. Let me introduce it to you.
Chapter 1 starts with getting us grounded on history and fundamentals of “digital” by Krassimira Schwertner from Bulgaria. In his “The Impact of Digital Transformation on Business – A Detailed Review”. Krassimira sets the tone from the outset: “Digital Transformation goes beyond the definition of process automation – it transforms the processes themselves, business models and customer expectations”.
He goes back in history to tell the story of the four industrial revolutions, and then tackles the impact of “our one” on organizational change management, strategy, employees and customers, business processes, and IT infrastructure. He for sure meets the title promise of “detailed”!
He concludes thoughtfully: “This new world shaped through Digital Transformation is enormously multicomponent and complicated – we need to constantly analyze, assess and develop it to ensure the stability and the power of our societies.” Amen.
In Chapter 2 Chijioke Nwachukwu from France/Russia and Vu, Hieu Minh from Vietnam review Digital Transformation system-wise enhancing our understanding of theories, determinants, consequences, and contingent variables by going back to prior studies. “Digital Transformation Adoption: Antecedents and Consequences” highlights five building blocks of the digital transformation pyramid: competitive advantage, employee productivity, customer loyalty and satisfaction and firm reputation.
Next, we move to an inspiring illustration of a maybe unlikely enthusiastic embrace and leverage of Digital Transformation. Patrick Furu and Jörg Reckhenrich from Germany tell, in chapter 3, the story how the Berlin Philharmonic Orchestra delivered one of the very first systematically digitalized symphony orchestra experiences in the world. Importantly, “Digital Transformation at the Berlin Philharmonic Orchestra: Creating the Digital Concert Hall” depicts the importance of the underlying but so very important factors that enable effective leverage of Digital Transformation: 1) shared leadership and democratic governance, 2) deeply held and expressed values, and 3) no compromise on quality.
Tor Claussen, Trond Haga, and Johan E. Ravn from Norway direct attention to dilemmas and paradoxes introduced by adoption of new information and communication technologies (ICT) – in particular how they affect organizational participatory philosophies. Their Chapter 4 is titled “Deliberative and Material Organizational Becoming – Sociotechnical Leadership of Digital Transformation”.
They conclude that in the era of digitalization, organizations will constantly face demands for change and need for transformation. To cope with the ensuing paradoxes and deal with the contradictions on an ongoing basis, they should consider themselves as “organizational becomings” – reflecting the need for agility and constant renewal.
Segueing more deeply into the business world, “digital” for sure is the talk of the town with the conversation often quickly zeroing in on its specific elements: AI, big data, block chain, IOT, robotics, …. But how do you turn these into business transformation and innovation in order to extract tangible value from them In “Realizing the Full Potential of Digital Transformation”, chapter 5, Charles Popper, Chander Velu, and Janet Hao from U.S./Israel/U.K./China interviewed 14 Digital Transformation Executives from some of the world’s most admired companies across 10 industries in the US and Europe. They listened to their success stories and how they got there which were then used as cases to illustrate the core principles extracted needed for successful leverage of Digital Transformation. They were three:
1. Digital transformation must be integrated within the business strategy.
2. Digital transformation is most impactful when it leads to business model innovation, fully leveraging the opportunities the new digital economy introduces.
3. Measuring and managing digital transformation requires a multifaceted approach.
A classic report of tangible insights produced and initially published by The Conference Board – I am grateful to the company for re-publication authorization to be able to provide a broader, also academic audience with these so relevant insights.
Chapter 6 reviews the implications of Digital Transformation on an interesting sector not top of mind when it comes to technology: Culture. In his “Dynamics of cultural management, artificial intelligence and global regulation: The values of the ‘Business Intelligence Culture’ model.”, George Gantzias from Greece (where else) takes on this fascinating field.
Digital cultural management and public interest have become important issues in protecting cultural products and services both locally and globally. The most widely debated issues in the areas of digital culture are the protection of the cultural diversity, freedom of expression, digital transactions, public interest and ethical standards in the info-communication globalization.
To guide the discussion George has developed the Business Intelligence for Culture framework, or B.I.C.. It represents four core values as basis for developing self-regulatory mechanisms in cultural organizations: 1) values of cultural production, 2) values of cultural process, 3) values of cultural transactions, and 4) values of public interest and ethics. Together they help cultural institutions navigate through the new age of digital transformation and info-communication globalization in a principle- and values-based manner, protecting the local diversity while leveraging the benefits of the new world’s capabilities.
Last but not least, Jim Fitzhenry from the U.S. already dives into the (quickly) emerging topic of “Green Digital” – where the two dominant forces of our era, Digitalization and Sustainability have recently started to converge. His chapter, Chapter 7, “Accelerating Growth of the “Green Digital” Company” takes a highly focused strategic look at how to leverage this best, depending on the company’s dominant strategic choice. For this, Jim goes back to Treacy’s fundamental options of Operational Excellence, Customer Intimacy, and Product Leadership.
Industrial Social Impact Innovation (ISII) is inspirational. To succeed through intersection with the opportunities Digital Transformation represents requires choiceful strategic implementation – and making choices so as to focus the resources is not always a management strength. Jim goes as far as offering a deliberate process of six steps. They serve as roadmap for “Green Digital” stars of the future to thrive into the new world with an equal emphasis on all three legs of the three-legged stool of true sustainability: financial, socioeconomic, and environmental stewardship, with appropriate choices within each.
Thank you, reader, for your interest, and I hope you find knowledge, insight, and inspiration from (elements of) the book!