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The best way to learn about a subject is to study it in depth. Jeanne Ross knows that better than most. As the Principal Research Scientist at MIT’s Center for Information Systems Research, she spends her time really digging into how to get the most out of information technology. One of the subjects she’s looked at closely is the topic of digital transformation — in fact, she recently published a book on the subject titled Designed for Digital. On this episode of IT Visionaries, she tells us about the building blocks of digital transformation and takes us through use cases from Apple to Lego to illustrate how the shift to digital plays out.  

Best Advice: “Listen. Listen to executives to hear their pain and listen to employees to hear their ideas.”

Key Takeaways:

  • Jeanne’s work at MIT and how research is done
  • The building blocks of digital transformation
  • Digital transformation use cases
  • How to create a good employee experience when implementing digital change

Jeanne’s start in tech and her work at MIT

While teaching accounting at a college in Wisconsin, Jeanne was asked to teach information technology even though she had no idea about IT. In order to be an effective teacher, she got permission from the dean to get a Ph.D. in the subject. She fell in love with technology and has been involved in the subject ever since including in her current role at MIT’s Center for Information Systems Research. At the center, Jeanne and the team try to help companies understand how to get value from their investments in information technology.

“We are just trying to help companies understand how to transform to take advantage.” 

What does Jeanne’s research process look like

Jeanne focuses her research on how to get the most out of technology. In order to do so, she stays in close contact with approximately 100 sponsor companies, which provide data and use cases that Jeanne can look into. They report what kind of IT problems they have and Jeanne looks at the reports to find broad and common challenges. She also tries to use that data and prior knowledge to predict where problems may arise. Once those problems are identified, Jeanne does case studies, interviews, and in-depth research to better understand what is happening, why and how to go about avoiding or fixing the issues. Jeanne does CIO surveys, talks to other executives, does on-site visits, and over-the-phone surveys to get a full picture. She then will dig into the transcripts to look for trends and patterns and does data-reduction exercises to find the pain points. 

“My research is not unlike what a lawyer would do when they’re trying to understand some phenomenon or what caused a crime. I dig in and collect all the evidence I can as to why a certain company is having a certain result. And what I actually collect really depends on what appears to be relevant.”

Writing Designed for Digital

With a proper digital strategy, Jeanne found that there was so much more you could do with your business. You could take operational excellence to a whole new level. Jeanne found that companies that succeed were the ones that understood that digital technologies could allow you to rethink your customer value proposition. Companies that don’t realize that, or think they can wait to transform, will be left behind and overtaken by companies that put digital first. But doing a proper and complete digital transformation is extremely difficult, so Jeanne wanted to write a book that explained the process and highlighted various transformation use cases. 

One use case she points to is that of USAA, which in 2010 was realizing the potential of mobile before most other companies. By focusing on customer solutions and providing new and useful technology they were able to stay ahead of the digital curve. 

“We were quite struck when we went out to study digital transformations, how hard they are and it immediately helped me understand why enterprise architecture is both underutilized in companies and so important. What we learned pretty early on is that for a lot of companies when they said we are transforming digitally, all they meant was they were transforming to become more digitized.”

“What we observed is that there were these companies that totally understood that digital technologies allow you to rethink your customer value proposition.”

Success stories

Amazon is a great example of a company that totally understood the digital transformation. This is a company that saw what technology made possible and seized the moment. It became the way business was done and was revolutionary in adding a shopping cart, reviews, robotics, A.I., etc. They were looking at technology and asking, what can we do with that to make our customer’s lives better? 

“[It’s about] looking at technology and saying, ‘Well, what can we do with that to make our customers’ lives better?’ It’s just a gene that every single company needs. You have to now move from thinking of information technology as an enabler of your strategy to thinking of it as the inspiration for strategy. That’s a huge shift.” 

Are there best practices?

According to Jeanne, one of the most interesting questions to ask is what is the order in which we pursue digital transformation? In an effort to build a roadmap to answer that question, Jeanne revealed that they found five building blocks. They are all important, and there is not necessarily any right way to order them. Jeanne says that as long as you start with one of the top four building blocks, you can have success. The building blocks are: 

  1. A strong operational backbone
  2. Customer Insights
  3. Building some components and seeing what you can do with them
  4. Create an accountability framework
  5. Build a platform for external access

“Established businesses think they are the Steve Jobs of their industry or that they know better than their customers. Well, I’m sorry if they don’t buy it, it doesn’t matter if it was a brilliant idea. I think a lot of companies are learning the hard way. You have to go out and acquire customer insights, build on those insights, learn from those insights and keep working with customers to see what kind of new value propositions they’ll accept.”

Studying Lego

One of the examples of a company that went through a remarkable digital transformation is Lego, which went from being only a physical product to offering digital experiences to customers while still remaining true to the physical product. Despite the transformation, though, Jeanne reports that when she talked to Lego’s CEO, he told her that he believes they are not yet digital at all. Rather, he believes that other start-ups are using legos in their own digital experiences, which worries him. 

To stay ahead, Lego’s digital transformation began with Jeanne’s first building block: a strong operational backbone. They looked at their supply chain and knew they had to get that in order because they believed, rightly, that they could build a digital experience upon their supply. And in doing so, they were also able to create a workforce that was more agile and engaged. 

Employee experience through digital transformation

When talking about big, older companies, not much is going to change or at least not rapidly. They can be more gradual in their changes, and they have to be because it takes a while to absorb and become good at utilizing those digital changes. The approach is to start small with a few employees and start with the ones who love problem-solving. You can’t start at scale and try to become an entirely different company. Transformation should be gradual. 

“[Companies must think that] our whole transformation should indeed be gradual so that when we get to be as big on our digital side as say a Google, we look kind of like Google. We have a fairly flat hierarchy, we have a lot of empowered routines. We feel the chaos that comes with all that empowerment. We don’t let it overwhelm us. We’ll get there gradually, and I think recognizing that this is a learning process and you can get there, but you should start small, is actually really key to this whole transformation.”

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