The reality is stark. Most digital transformation projects just don’t deliver the value we expect. Why does this happen? It’s a strategic mistake. Companies mistake digital transformation for a simple IT upgrade or an efficiency fix. This is just digitization not transformation. True digital transformation needs a CEO Mandate to break down the old structure and totally reinvent the core Business Model. If the strategy doesn’t change how your company makes money it isn’t transformation.
The main problem is the “technology trap.” Leaders look inward focusing on technical goals like “50% of apps in the cloud.” They stop measuring results in the market. This always leads to the digitization of old often wasteful processes creating digital waste. To win you must shift the focus from internal efficiency to creating external value and beating your competitors.
Successful digital transformation leadership means the executive team must enforce these three minimum rules:
- Define the future value curve by setting a clear vision for the Target Operating Model (TOM). This model must clearly show the new revenue streams and customer relationships that are impossible today.
- De-risk and decommission the legacy because you must create transformation capital. Aggressively move resources away from the past by systematically shutting down old technology and processes.
- Enforce data sovereignty because the data layer is the base for all future AI. Leaders must set company-wide rules for governance and quality.
Digital transformation is a strategic move not a technical checklist. The mandate is clear. Actively replace the current business model because it won’t last forever. Before approving the next budget ask your team this question, ‘Are we reinventing our business model or just making our current one slightly faster?’