Key Points: Week 4

Your Path to Digital Transformation

Strategy Driven by Digital

• The “one-size-fits-all” approach to strategy is no longer sufficient for a
sustainable, competitive advantage
• Approaches to strategy:
• Classic- environments that are highly predictable and non-malleable
• Adaptive- environments that are unpredictable, malleable, or both
• Visionary- environments that are predictable and malleable
• Shaping- environments that are both unpredictable and malleable
• Renewal- needed in environments that are harsh where survival is
threatened.
• Companies need to choose the right combination of approaches
• Strategic ambidexterity

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 Digitize the Core Part I
• Companies need to aim for both higher operational efficiency and
better customer experience
• Critical to have an end-to-end approach to digitization
• Rethinks how value is delivered to the end user
• Shift mindset from a process to thinking about a customer journey
• Customer journey is the step-by-step experience they go through to use a service or
product
• Customer is the center of the universe- therefore all changes to a process should be
understood from the lens of the customer

Digitize the Core Part II

• How do companies develop digital end-to-end customer journeys?
• Design thinking framework
• Give the design team an empathetic understanding of the problem they are trying to
solve
• Team analyzes its observations from the first stage and synthesizes them
• Team members start to identify new solutions to the problem
• Team members produce a number of inexpensive, scaled down versions of the product
or service feature they want to change
• Team tests the prototype in real-life conditions to see the impact on the customer
experience along the whole journey

This slide handout was created by the University of Virginia Darden School of Business and is provided to
support your learning while taking this course. Please do not share or distribute it.
 New Digital Growth Part I
• Business leaders need to find new digital growth
• Incumbent industry players need to be efficient at managing the
legacy business and simultaneously building new ventures
• Run exploitation at their core and exploration of adjacencies at the same time
• Ambidexterity
• Organizations commonly fall into two traps:
• Success trap (pure exploitation)
• Perpetual search trap (pure exploration)

New Digital Growth Part II

• How can a company avoid the “trap’s” and achieve ambidexterity?
• Three ways to balance exploration and exploitation:
• Switching
• Create separate units to serve separate objectives
• Rely on a company’s ecosystem
• Acquisitions
• Partnerships
• Incubation
• Other more informal exchanges of ideas
• A company needs to make continuous adjustments of resource allocations
depending on how the environment evolves.

This slide handout was created by the University of Virginia Darden School of Business and is provided to
support your learning while taking this course. Please do not share or distribute it.
 People and Organization
• Becoming digital ready requires a massive change in how an organization thinks
and functions
• Three traditional models for how companies organize for digital transformation:
• Decentralized
• Centralized
• Excubator
• Companies need to run hybrid models
• Companies need to adopt a whole new way of working
• Agile@scale
• Reconciling two core concepts: alignment and autonomy
• Increases time to market, productivity, and employee engagement
• Multi-year journey that requires transforming a company’s operating model
• Business purpose that balances autonomy and alignment
• Translate business purpose to governance and funding principles
• Build supporting mechanisms on 3 pillars: structure, processes, and behaviors
• Measurement framework and technology platform that allows for fast iteration, and testing
and measurement

Data & Analytics Part I

• Four domains to think about when building data and analytics
capabilities:
• A clear business objective
• Creating a vision of what the company wants to achieve
• Data usage
• Translating the ambition into tangible use cases
• Data engine
• Identifying the capabilities a company needs to implement the use cases
• Full data ecosystem
• Identifying who beyond the company itself can support the development of those
capabilities

This slide handout was created by the University of Virginia Darden School of Business and is provided to
support your learning while taking this course. Please do not share or distribute it.
 Data & Analytics Part II
• Four domains to think about when building data and analytics capabilities
• A clear business objective/vision
• The vision needs to resonate with a business outcome
• Data usage
• We need to use data as a decision-making tool. To create the right use cases, it is necessary to
promote a data-driven culture in the first place.
• Data privacy is a problem for all generations. Companies wanting to collect and use their
customer’s data need to protect it against misuse.
• Data engine
• Don’t look at technology solutions from novelty lens
• Set up a strong team with a variety of skills
• Data and analytics should not live in silos, but should be embedded in the daily business
operations
• Full data ecosystem
• It’s much more efficient to rely on a wider data ecosystem for data exchange and analytics
support

Technology
• A digital-ready technology function is required to keep up with new
customer expectations and fast product delivery
• Having two speeds provides a second gear that helps businesses get
started
• Many companies have to continue managing their legacy system, and also
drive a separate digital speed execution in parallel
• Ultimate goal is to converge both execution speeds in the technology
function together with the business side in a single, unified operating
model.

This slide handout was created by the University of Virginia Darden School of Business and is provided to
support your learning while taking this course. Please do not share or distribute it.
 Ecosystems
• Ecosystem
• Network of organizations and individuals exchanging information and goods
to create a certain value
• Companies today are competing against full ecosystems, not single companies
• With falling transaction costs, ecosystems are more integrated and link
different layers of the value chain
• How can companies leverage this diversity to create more value?
• Change of mindset towards cooperation
• Find the right set of partners to ensure success
• Horizontal partnering
• Vertical partnering
• Cross industry partnering

This slide handout was created by the University of Virginia Darden School of Business and is provided to
support your learning while taking this course. Please do not share or distribute it.