Digital Transformation

Digital transformation: changing organizational habits is an essential guide to vision, strategy, and enterprise success. Digital transformation is a strategy that modern organizations must consider in order to remain competitive and achieve sustainable growth. In this section, we explore three key elements of successful digital transformation.

1. Digital Transformation Strategy I: Clear Vision and Strong Executive Commitment

Digital transformation is a process of continuous growth and fundamental change for a company, and it requires a clear vision and a strong drive from the top to make it successful.

1.1. The importance of having a vision

1.1.1. Providing direction

Executives need to articulate the long-term goals and direction they want to take the company through digital transformation. This vision defines the future of the company and serves as a benchmark for selling the need for change throughout the organization. If you don’t buy into this vision and direction, you might as well not start implementing it, because it’s a choice you have to make for sustainable growth.

1.1.2. Criteria for making strategic decisions

A vision should be the reference point for all strategic decisions. It helps companies stay consistent when making important technical and organizational decisions during digital transformation.

1.2. A strong sense of urgency

1.2.1. Driving change in your organization

Executives must demonstrate a strong commitment to driving digital transformation. This is critical to overcoming resistance to change within the organization and ensuring that all members are actively engaged in the change. Most employees don’t like change. They also have a built-in resistance to new organizations. A strong commitment from the CEO is critical to overcoming this resistance and ensuring strong momentum.

1.2.2. The role of leadership

As change leaders, executives must be committed to changing the culture of the organization, adopting and adapting new technologies, and realizing a long-term vision. This drives change throughout the organization and sets the stage for digital transformation success. This means that the CEO must lead by example, even if he or she is not digitally savvy.

Similarly, the success of digital transformation starts with a clear vision and strong commitment from the top. These two factors play a key role in driving digital change within an organization and motivating all members to actively participate in the change. The role of the executive team is therefore a critical success factor in the digital transformation process.

2. Digital Transformation Strategy II: Understand that DX is a long journey (1) (2)

Digital transformation (DX) is not a project that can be completed in a short period of time. It’s a complex process, and successful change requires time, patience, and strategic planning.

2.1. The need for long-term planning

2.1.1. Setting the runtime

Digital transformation takes at least three years, during which time companies must adopt new technologies, change organizational structures, and empower employees.

2.1.2. Step-by-step approach

It’s important to take a phased approach to long-term planning. In the early stages, you define key technologies and processes; in the mid-term, you execute them; and in the final stages, you adjust and optimize your strategy.

2.2. Build a sustainable strategy

2.2.1. Changes in organizational culture and processes

Digital transformation goes beyond the adoption of technology to include changes in organizational culture and operational processes. It requires the participation and support of all employees.

A long-term DX journey requires ongoing executive support and sufficient resources, including investments in technology adoption, employee training and development, and change management.

In short, digital transformation is a long journey, and it requires a long-term plan, a sustainable strategy, and the engagement and support of the entire organization to make it a success. Through this process, companies can adapt to the digital age, become more competitive, and achieve sustainable growth.

3. Digital Transformation Strategy III: A 3-Year Plan for Successful DX Projects

Digital transformation (DX) is a long-term project with short-term results. Successful DX requires at least three years of strategic planning and methodical execution. During this time, you should take your digital transformation step by step, setting clear goals and strategies for each phase.

3.1. Year 1 – Build digital capabilities and establish a culture

3.1.1. The importance of improving digital capabilities

The first year focuses on improving digital capabilities within the organization. This includes acquiring digital skills for employees and introducing and adapting to new digital tools. It’s important to provide training and hands-on opportunities for employees to become familiar with digital technologies and use them effectively in their work.

3.1.2. Expand your organization’s digital culture

Establishing a digital culture is essential to the success of DX. To make your culture digitally driven, encourage a digital mindset in your employees and clearly set out your organization’s values and direction for digital transformation.

3.2. Year 2 – Collaboration and goal setting

3.2.1. Choose meaningful assignments

In the second year, you’ll select a digital challenge that makes business sense. The importance of collaboration is emphasized in this course, and the goals of digital transformation are clearly set through effective collaboration between different departments.

3.2.2. Setting serious DX goals

Set full-fledged goals for DX and create a practical action plan. In this phase, you’ll build on the skills and experience you’ve gained in your first year and set more specific, actionable goals.

3.3. Year 3 – Scaling DX and realizing results

3.3.1. Scaling performance-based DX

In the third year, you build on the achievements of the previous two years and expand DX into new areas. In this phase, you deepen your organization’s digital transformation and apply it to different areas.

3.3.2. Establish a sustainable digital culture

It takes work to establish a sustainable digital culture. This includes ongoing training, improving work processes, and optimizing digital tools.

4. Digital Transformation Strategy IV: Select the DX Execution Model for Your Company

Choosing the right execution model for digital transformation (DX) is critical to the success of your company’s transformation. Each company needs a customized approach that fits its unique situation and goals.

4.1. Selecting an execution model

4.1.1. Analyze your organization’s current situation

Before choosing an implementation model, you should carefully analyze your current situation, existing systems, organizational culture, and capabilities. This will help you select the DX model that best fits your needs and goals.

4.1.2. Criteria for model selection

Factors to consider when choosing an execution model include technical requirements, budget, your business goals, and organizational flexibility. Based on these factors, you should choose a model that is effective and feasible.

4.2. The importance of small wins

4.2.1. Momentum from early success

It’s important to experience small wins in the early stages of digital transformation. These early successes help to create a positive response within the organization and build support for the change.

4.2.2. Learn and improve

The experience and feedback gained from small successes become important lessons to adjust and improve future DX strategies. This contributes to the organization evolving and growing during the digital transformation process.

Choosing the right execution model for digital transformation and experiencing small successes are essential to the success of an organization’s digital transformation. This approach plays an important role in helping companies adapt to the digital age, become more competitive, and achieve sustainable growth.

Digital transformation (DX or DT), a two-year process, was completed in two months during the COVID-19 pandemic, and many companies are now well aware of its existence. However, while everyone agrees on the need for digital transformation, there is still resistance to DX in the enterprise.

The myths and realities of digital transformation

Conceptually, we all agree. But when you ask them to change the process (or sequence) of what they’re doing, to use digital tools to do things differently than they’ve done before, they come up with all sorts of reasons why they don’t need this, they don’t need that.

Here’s another scene: I’m in a line of business, I see the trends in the market, I’m 100% aware of the need for digital transformation, I’m receptive/open to it, but I don’t understand what these DX people and DX consultants are doing. They say they’re going to teach you, they say they’re going to explain things well, but they just throw a manual at you and leave. 

These two scenes are still happening in many organizations today. DXers say they can’t DX because the field isn’t helping them, and the field says they can’t DX because the DXers aren’t teaching them enough. 

Over the course of this blog, I’d like to dive into the following key elements of digital transformation:

Over the course of this blog, I’m going to unpack a lot of different stories about digital transformation, but I’m going to start with what the CEO needs to do. Because DX is a kind of constitutional change, there is nothing more important than the leadership of the CEO. Next, we’ll talk about how to select the members of the DX organization and who should be the leaders. Then we’ll talk about how to communicate with the frontline departments, how to gain their trust. Then we’ll talk about what experiments should be done with DX, how they should be done, how much time should be given to experiment, and what should be done as a first step.

I’ll also share tips from the field that I’ve experienced while driving digital transformation in traditional companies that are far from digital. (I’ve led various DX efforts at LG Electronics and now at SK discovery and SK bioscience)

Digital Transformation Strategy: An Essential Approach to Transformation

1. Vision and strategy: You need a clear vision and strong executive commitment.
   • A clear vision and strong commitment from the executive team is required.
   • Understand that DX is a long journey.(1) (2)
   • Requiring at least three years of execution time and support.
   • Select a DX execution model that works for your company.
2. Talent and organization: It is important to build an expert organization for DX execution and acquire talent.
   • Creating a Center of Excellence (CoE) for DX is the starting point.
   • Having the right people with the right expertise is a critical key to DX success.
   • Think about market-driven, not company-driven, systems for DX organization leaders and members.
3. Process change: Process change and the adoption of digital tools for work transformation.
   • Transforming work through DX starts with process change.
   • We recommend introducing digital tools as the first DX task, and it is important to manage change among employees.
   • If you can’t identify process issues, run process visualization.
4. Culture: Improve the user experience of your employees and change your culture.
   • The user experience of employees is just as important as the UX of consumers.
   • Change the external elements of your organization that can affect your DX, such as reporting culture and office location.
   • If there is a limit to how much you can change internally, look to external partners to expand the experience.
5. Introduce technology: Introduce technology elements for DX and integrate technology for work efficiency.
   • Introducing technology elements for DX (AI, big data, cloud)
   • Incorporating various technologies to streamline work (PPA, LowCode)
   • Changing internal company standards to apply DX, such as security regulations to adopt the latest technologies, is also necessary.
6. Business model transformation: the importance of streamlining operations and developing new business models
   • It is necessary to clarify the target of innovation: operational efficiency, core business competitiveness, and new business models.
   • Operational streamlining can generate short-term results and is a driver of DX.
   • Completion of new business models is an area that requires significant investment of time and money.

My one-line summary of digital transformation is, “Digital transformation (DX) is about changing organizational habits.” It’s a definition that captures the essence of how we should be looking at DX. After all, if we’re going to look ahead to the next 10 or 20 years, we’re going to need to make sure that our people are agile and open-minded, and that we’re adopting new technologies and solutions to truly innovate in this fast-moving world. That’s how I’ve interpreted DX as “changing organizational habits.” Good habits make a company stronger. Let’s look at how digital transformation can be used as the first mission to change organizational habits.

“Digital transformation is not a one-time project.”

“It’s a corporate habit for sustainable growth.”