Leading Digital Transformation, extract from book

8 LEADING DIGITAL TRANSFORMATION
TABLE OF CONTENTS
A big thank you to... 6
Foreword by Brian Solis 10
Preface 14
Getting the most out of this book 16
OTHER STORIES OF DIGITAL TRANSFORMATION 18
Ving – From 54 retail stores to none in 13 years 20
Trelleborg – How digital transformation is the right
path for an industrial company 22
Schibsted – Lively 178-year-old takes the lead
in digital transformation 24
TV4 – From viewers to users 26
MTGx – The motor that accelerates
digital innovation 28
Doberman – An agency built on trust 30
Leila Lindholm – How passion, inspiration, vision,
and digital insight create business 32
King – From stagnation to success 34
ABOUT DIGITAL TRANSFORMATION 36
1. What surfing can teach companies 38
2. The ultimate goal: Digital nirvana 40
3. The concepts of of digitalization and digital
transformation 41
4. 10 pitfalls to avoid 44
THE DIGITAL MATURITY MATRIX METHODOLOGY 48
5. Digital maturity and competitiveness 50
6. The Digital Maturity Matrix 52
The three phases of maturity in
digital transformation 53
The three cornerstones of the
Digital Maturity Matrix 54
A conversation with Dr. John Kotter:
About change leadership in a fast-moving world 60
7. The 9 digital motors of transformation 66
Values, Vision & Mission 68
Strategy work 70
Organization 74
Processes 78
Infrastructure 80
Data & Analysis 84
Value proposition & Revenue model 90
Touchpoints 94
Relationships 98
8 Interaction and development of digital motors 104

9
LEADING AND ACHIEVING DIGITAL
TRANSFORMATION 106
9. The transformation process 108
10. Get into position 110
Identify the company’s digital position 110
Identify the industry players' digital positions 123
11 Choose the right waves 124
Compare the company’s digital position with
general best practice 124
Compare the company’s digital position with
others in the industry 125
Take account of the company’s overall strategy 126
Identify waves of change that have the greatest
effect 126
Determine the company’s digital destination 127
12. Make the most of the waves 128
Working in the Mobilization phase 128
Working in the Coordination phase 146
Working in the Acceleration phase 163
SUMMARY AND CONCLUDING WORDS 172
13. The 10 commandments of digital leadership 174
14. How we can work together to keep moving
forward 177
Concluding words 178
References 179
Footnotes 183

Ok, you’re ready for digital transformation! Everyone
is talking about it. Everyone is doing it. So now what’s
your next step? What do you do? Who do you work
with? What’s the goal and measurable ROI? Ask differ-
ent people and you’ll get different answers. Some of the
advice will be helpful, some of it not so much, and there
are also instances where you will be misled.
Among the many challenges of digital transformation
is a lack of a common definition or prescriptive set of in-
structions to follow because there isn’t just one approach
to digital transformation. It’s a term that has developed to
become all things related to competing and operating in a
digital economy.
Over the last ten years, digital transformation has
become a global trend affecting every aspect, level,
and model in businesses and organizations across every
industry. While there are many reasons for this, none is
more prevalent than digital Darwinism, the evolution of
technology, business and society, and the effects they
have on … everything.
The world is changing. People are becoming more
and more digital. Technology is accelerating. Executives
understand that change is inevitable. At the same time,
many executives in the C-Suite1
do not live life in a man-
ner that’s reflective of why digital Darwinism is rapidly
evolving. Thus, they do not lead the change of digital
transformation with a unified vision or purpose that ral-
lies the organization together. Instead, digital transforma-
tion rises up in disparate parts of the company leading to
a fragmented approach to change.
After years of research, I found that digital transforma-
tion was open to interpretation. This leads to divergent
interpretations of the problem and opportunities present-
ed by digital Darwinism and, thus, the approaches to
solve them. It’s very common, for example, to see indi-
vidual efforts strewn across the organization that includes
“the digital transformation of…”
• IT
• Marketing
• Advertising
• Sales
• Finance
• Customer Service/Support
• HR
• Supply Chain
• R&D/Innovation
Separate initiatives often lead to meandering or contrast-
ing efforts and goals. These attempts at driving change
are not ill-intended. It’s a function of design. Most or-
ganizations, unless you’re like the online shoe company
Zappos and practicing Holacracy2
, are intentionally hier-
archical and siloed through traditional architecture. But
digital transformation is most effective when it’s coordi-
nated as an enterprise-wide initiative.
I’m an optimist, so I try to see the good in everything.
Try is the keyword. Even though many digital transfor-
mation initiatives start in pockets without having a deep
understanding of what digital transformation is or why,
FOREWORD BY BRIAN SOLIS

Change.
Feel the word.
Change. Some love it, others hate it. No one is left
untouched by change.
Digitalization of a company, contrary to what intuition
might say, is less about ones and zeros than about people
and change, and fundamentally, changing a business.
All operational changes begin at the individual level.
This happens when employees, one by one, at all levels
in a company move away from old truths and develop
new ways to approach their work. When these combined
changes in behavior take place, a force is created that
can take the company in a new direction. This book is
about how such a force arises, how to steer it in the right
direction, and what forces the company needs in different
stages of development.
All industries are affected by digitalization and an in-
creasing number have gained insight that the conditions
for their business have changed. Industries develop new
value networks, new needs arise, buying habits are re-
cast, customer willingness to pay is changed, and use of
products and services become increasingly digital and
social. The list is endless.
We, the authors of the book, have always delighted in the
Internet boom and all the online startups that see oppor-
tunities in the new market conditions. Startups, whether
they are called Spotify, Alibaba, King, or something else,
are extremely inspiring.
Many have experienced tremendous growth and will
hopefully belong to tomorrow’s major employers.
The question we ask ourselves, however, is why are
there still so few success stories of traditional companies
taking advantage of digitalization and its possibilities?
These questions are important because the global econ-
omy continues to be dominated by older companies that
emerged from traditional industries.4
Therefore, even
more focus should be on helping traditional companies
succeed with digitalization.
Much has happened since the first computer was
launched in the 1940s.5
A company’s ability to manage
digitalization has become an increasingly important part
of competitiveness. Unfortunately, we encounter many
frustrated business leaders who describe feeling like
they’re sitting in the back seat of a racing car without
knowing who’s driving. We also encounter executive
boards and management teams ducking digital issues
because they don’t know the best way to take on the task
of digitalization. If they had the right support, the compa-
nies they are responsible for would be able to take sig-
nificant digital leaps, leaps that would lead to enormous
positive effects.
Successful digital transformation involves three things:
Innovation, change leadership, and digital maturity. The
transformation that companies need to undergo is usual-
ly larger than any previous change processes. Research
PREFACE

15
shows that as many as 70% of all major change attempts
in companies fail.6
Achieving real change is difficult: A
clear framework is required for a good chance of success.
This book’s goal is to help companies increase their digital
maturity and with that, its competitiveness. We do this
through our methodology The Digital Maturity Matrix
together with the understanding, tools, and recommenda-
tions that come with it.
This methodology was developed in collaboration with
some forty people in the areas of science and business, and
is based on proven experience, both our own and others’.
In addition, we have availed ourselves of research and
literature, as well as conducted workshops, interviews, and
discussions with researchers, government authorities, and
experts. Our objective is to provide tools, understanding,
and recommendations for how companies can strengthen
their competitiveness by developing business digital ma-
turity.
To succeed, executive boards and management teams need
to take charge of the company’s digital investments and
thus regain control of all aspects of business development.
The book is written for those individuals and companies
that have made this decision, in other words, where if is no
longer the question but rather how, what, and when.
One thing is for sure; simply by holding this book, you’ve
taken a big step towards taking command of your compa-
To succeed,
executive boards
and management
teams need to
take charge of
the company’s
digital
investments
and thus
regain control
of all aspects
of business
development.
ny’s digitalization. Soon, your digital journey will be on
course, gaining momentum to develop a digitally mature
operation that can, faster and smarter, transform the com-
pany into one that is more competitive in the long term.

gument against employees or the board, other times you
might be in search of a good exercise for the fall confer-
ence. There are many ways to read and use this book.
The book’s structure
This book combines theory, practice, and various busi-
ness perspectives for the best conditions for quick un-
derstanding. In the next section, you'll learn about eight
companies, their digital journeys, and their lessons - all
good examples of how digitalization is used to create
competitiveness. We hope you will find one or more
companies that interest you and that you want to learn
more about.
The book's theoretical part begins with a description of
how companies can take advantage of acting like surfers.
It then describes digital nirvana - the unattainable goal of
digitalization - before we introduce the methodology and
how innovation, change leadership, and digital maturity
is linked to a company's competitiveness.
After the theoretical framework is in place, you begin the
concrete work of your company's digital journey, phase
by phase. We describe the process of work that starts
with finding out where you are today - your digital posi-
tion - and how you can learn to identify and address the
waves of change that will carry you to your digital desti-
nation, all to maximize your competitiveness.
Our hope is that you gain a deeper understanding of what
digitalization involves and how your business should
work to create value through all aspects of digitalization.
The book is intended primarily for those who work in a
traditional company in need of a digital transformation.
The book helps you to find, get, and delegate control
throughout your digital journey. In a digital transforma-
tion, methods, tools, and a cohesive transformation pro-
cess are necessary to facilitate the work and ensure that
the right things are done at the right time.
Every business has unique requirements, constraints, and
opportunities. The methodology The Digital Maturity
Matrix helps you understand your company's specific
characteristics and, based on this knowledge, you can
make the right decisions and prioritize initiatives for the
best possible result.
The methodology works for all types of companies. In
this book, however, we have chosen to focus on tradi-
tional companies and how we can best help them.
We hope the book gives practical application in your
work and can become a source you consult again and
again - perhaps when you need advice on how to im-
prove efficiency through digitalization or how to better
create and develop customer relationships. Sometimes
you might only need to find examples to bolster an ar-
GETTING THE MOST OUT OF THIS BOOK

OTHER STORIES OF
DIGITAL
TRANSFORMATION
We illustrate this book's premise
by examining eight companies and
taking part in their digital journeys.
In addition to the examples
in this book, you can find
even more case studies at
www.digitaltransformation.net.

VING SWEDEN ABPART OF THOMAS COOK GROUP
From 54 locations to none
in 13 years

21
customers. Make sure to collect the right information and
make it usable.
• Broaden your view of service – it doesn’t have to be about di-
rect, face-to-face interaction. The right information, present-
ed the right way at the right time: That’s a great foundation.
• Dare to be transparent – “At the start, a lot of people were
critical of the idea of letting customers openly review hotels
and destinations. It might be painful for us and our partners
now and then, but it helps our customers find the right travel
destinations and helps us improve,” says Johnny Nilsen.
READ MORE ABOUT VING
Chapter 12. Working in the Mobilization phase. More specifi-
cally, “Getting customer and market insight.”
Chapter 12. Working in the Coordination phase. More specifi-
cally, “Continue testing the value proposition and the revenue
model.”
WHO: Johnny Nilsen (Managing Director) and
Lisa Rönnberg (former Online manager).
WHAT: Ving along with TUI are market leaders each holding
about 30 percent of the Swedish charter travel market.
620 million EUR, of which 78 percent via Internet (2015/2016).
PROFIT: 32.3 million EUR (2015/2016).
NUMBER OF EMPLOYEES: 168.
FOUNDED: 1956.
WHERE: Offers more than 500 destinations in over 50 coun-
tries. Part of the international travel operator Thomas Cook
Group, with operations in 17 countries.
SUCCESS FACTORS: Ving dared to close its physical travel
stores and go online. The company’s straightforward and
unpretentious, open culture has been a key success factor
every step of the way.
TRIVIA: More than two million Swedes purchase classical
package trips each year, and 700.000 of them travel with Ving.
TAKEAWAYS FROM VING
At the turn of the millennium, Ving had 54 travel agencies in
Sweden; the last physical store closed in June 2017. In the early
2000’s, Ving distributed 2.4 million paper catalogs. Then, in 2015,
Ving replaced the catalog concept with a travel inspiration mag-
azine, distribution approximately 500,000 copies per issue. Today,
three of every four Ving charter trips are sold online. Throughout
their exceptional and relatively fast transformation, Ving was
able to stay on course.
THE MOST IMPORTANT LESSONS:
• Choose a path – you can’t be the best at everything.
• The customer expects to be seen and treated like an indi-
vidual – all information we have helps us learn about our VING SWEDEN: Changes in customer communication
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
650 000 visits to
Ving.se/week
Online sales 73%
230 000 Facebook followers
17 000 Instagram followers
11 000 Twitter followers
Brochures
500 000/year
600 000/year,
Telephone 65%, Chat 20%
Email 15%
1 shop
Social media
Online sales
20%
54 shops
Telephone calls
850 000/year
Traditional catalogs
2 400 000/year
120 000 visitors
Technology is
straightforward
compared to
changing people.
Johnny Nilsen,
Managing Director
Read the entire interview
with Ving.
VING SWEDEN: Changes in customer communication

KING
From stagnation to success

35
TAKEAWAYS FROM KING
Few know that King’s path to success has had its share of
twists and turns. It’s hard to believe that this entrepreneurial
online company once found itself trapped in daily operations,
focused solely on maintaining its existing business. The
wake-up call came from a dejected investor pulling out of
King.
THE MOST IMPORTANT LESSONS:
• It is possible to start over – but it takes focus and the will
to change.
• Dare to challenge yourself – leave your comfort zone and
take more risk.
• Be humble – you will make friends along the way and
stay on your toes.
READ MORE ABOUT KING
Chapter 12. Working in the Coordination phase. More spe-
cifically, “Introducing an ongoing innovation process” and
“Understanding what drives business”.
Chapter 12. Working in the Acceleration phase. More specif-
ically, “Ongoing and open innovation through small and large
steps”.
WHO: Sebastian Knutsson (Founder and Chief Creative
Officer), Magnus Kager (Game Performance Manager).
WHAT: The world’s biggest online social media gaming
company, with 405 million active users for the year of
2016. The company behind Candy Crush Saga.
TURNOVER: USD 367.8 million (2015)
PROFIT (EBITA): USD 194.3 million (2015)
NUMBER OF EMPLOYEES: 2,000 (December 2016)
FOUNDED: 2003.
WHERE: The games themselves are global. King has of-
fices in London, Berlin, Stockholm, Malmö, Barcelona,
Singapore, Seattle, Tokyo, Malta, Bucharest, San Fran-
cisco, New York, Los Angeles and Chicago.
SUCCESS FACTORS: Took a risk and had energy and cour-
age to walk away from existing business to look beyond.
Today, King’s culture supports change as well as data
analytics on a world-class level.
TRIVIA: King collects 36 billion data points daily and the
amount of data increases by a massive 1.5 terabyte
each day.
We simply
focused too
much on the
existing business
and weren't
vigilant about
changes taking
place around us.
Sebastian Knutsson,
founder, about
nearly missing
Facebook and
smartphones as
gaming platforms
Read the entire interview
with King.

ABOUT DIGITAL
TRANSFORMATION
You can’t stop the waves,
but you can learn to surf.
Jon Kabat-Zinn,
Professor of molecular biology
and mindfulness guru

CHAPTER 1
WHAT SURFING CAN TEACH COMPANIES
The transportation network company Uber launched a
beta version of its app in the summer of 2010. Less than
five years later there are more Uber cars than traditional
yellow cabs in New York City10
.
As it begins to enter industries, digitalization has a pro-
found impact in reshaping both business models and value
networks11
. Reshaping occurs through a marked increase
in rate of change, opportunities, and threats. The tradition-
al long technology and product life cycles are being re-
placed by different technologies and solutions that overlap
and remain in parallel, as the cycles become shorter.
As external change increases, internal change should
increase as well. That is, companies with an operational
excellence focus need to focus in parallel on agility, in-
novation, and entrepreneurship. The dilemma for CEOs
and management is to create a business that can handle a
combination of operational excellence and innovation -
combining today’s business with tomorrow’s.
Associated with increased rate of change, many signs
indicate that the clock is ticking for traditional long-term
competitive advantage. Companies can no longer rely on
sustainable business models: The strategy instead needs
to be based on speed, flexibility, and power to handle
transient competitive advantages.
Competitive advantage needs to be based on the creation
of a dynamic organization with the ability to tackle the
right opportunities in the right way. Companies need to
handle all the frenzied waves of change, such as: artifi-
cial intelligence, big data, and Internet of Things - and
this is where the analogy of surfing comes in. Surfing
and digital transformation, in fact, have very much in
common.
ADAPTATION
ADAPTATION
TIME
ENTREPRENEUR CULTURE OPERATIONAL EXCELLENCE CULTURE
YESTERDAY
TIME
ENTREPRENEUR CULTURE
OPERATIONAL EXCELLENCE CULTURE
TODAY

39
mately need to identify and either maximize or choose to
leave behind.
We will return to the surfer’s three tasks often in this
book. The heart of our work with these is The Digital
Maturity Matrix, a methodology described in depth in the
next section of this book. With that knowledge in mind,
we then come to grips with how digital transformation is
managed and implemented - through starting at the right
position, choosing the right waves, and making the most
of those waves.
Imagine that your company is a participant in a surfing
competition. The company exists in an ocean with un-
ending new waves: some larger, some smaller. A partici-
pant of a surfing competition has three tasks:
1. Get in position. Participants need to recognize
their strengths and weaknesses and position them-
selves appropriately to catch the best waves.
2. Choose the right waves. The participant’s view
of the horizon indicates which waves are incoming
and of those, which waves are interesting to take
and which can pass. The participant’s position and
strength determines which wave should be taken.
3. Make the most of the waves. As a wave ap-
proaches and grows, the participant must prepare
to catch it. Once on the wave, it is critical to deter-
mine where the wave is headed in order to quickly
and agilely steer, getting the most out of it before
catching the next wave.
Now, reread the three tasks above and exchange the word
‘participant’ with ‘company’. This is the essence of the
transformation process.
To win, it is not sufficient to ride one wave. Many waves
must be caught and the appropriate waves must be cho-
sen. Moreover, it’s important to maximize every wave
that is chosen. A business should operate in such a way
that the company dares to: embark on uncharted waters,
quickly see which waves are incoming, which are worth
catching, and how to best make that happen. This is done
through courage, good environmental scanning, clear
strategy, and the ability to quickly and continually adjust
the company’s resources.
Ultimately, it is about innovation. Those who are truly
innovative create their own waves - waves others ulti-
The key is to
learn to surf the
waves of change
that come at
an increasingly
rapid pace.
THE DIGITAL
MATURITY MATRIX
GET IN
POSITION
CHOOSE THE
RIGHT WAVES
MAKE THE
MOST
OF THE
WAVES

THE DIGITAL MATURITY
MATRIX METHODOLOGY
Your surfing can get better on every turn,
on every wave you catch. Learn to read the ocean better.
A big part of my success has been wave knowledge.
Kelly Slater, eleven times world champion in surﬁng

supports all three of the surfer’s tasks – taking position,
choosing the right waves, and making the most of them.
The methodology is well-tested and is used for small, me-
dium, and large companies. The methodology helps with:
• including all perspectives in the company’s digital
journey,
• understanding the company roadmap and where the
company is positioned on it (finding the company’s
digital position) in order to take the right course for
the smoothest possible journey to the company’s
desired position - its digital destination,
• providing CEO and management teams control with-
out them needing to be controlling,
• doing the right things and not only doing things
right: engaging in digital initiatives in the right order
with the understanding that everything has a season,
• developing the company’s digital initiatives to
strengthen existing operations as well as generate
new business,
• creating a digitally mature business that continually
develops and in which digital initiatives don’t feel
alien, frightening, or difficult, but are seen as a natu-
ral part of the business,
• providing increased return on the investments a digi-
tal transformation entails.
The methodology was developed for general application
to business transformation, with special emphasis on tra-
ditional companies. Our ambition is to have a broad ap-
proach regarding, among other things, industry and com-
It is crucial for companies and organizations to under-
stand how digital development affects business. This
insight comes at different speeds and doesn’t really begin
until a company decides to tackle the digital transforma-
tion process from a holistic perspective. We explained in
chapter three that there is often confusion surrounding
terminology.
A prerequisite for successful digital transformation is a
shared understanding of the work that comes with it. This
is particularly important for management and key per-
sonnel whose task is to convey the shared understanding
to employees and ensure everyone is headed in the same
direction. A shared understanding begins with dialogue
around what digital transformation is and why it is impor-
tant.
The methodology described in this book helps control
how the work should be developed and assessed. To begin
with, digital transformation is not an end in itself but is
about the ability to develop and maintain competitiveness.
DEFINITION OF THE DIGITAL MATURITY MATRIX
The Digital Maturity Matrix is a methodology helping
companies in digital transformation with how they should
work, what they should do, and when this should happen.
All to continuously maximize digital competitiveness.
Answers to the questions how, what, and when are found
by looking at the digital maturity of a company as well as
the digital maturity of its environment. The methodology
CHAPTER 6
THE DIGITAL MATURITY MATRIX

53
often necessary to get to the bottom of why the company
exists - to find a higher purpose. The answers to why and
where create enthusiasm and strength to go forward. In
this phase, efforts are often limited to one or a few people
leading the work. Alternatively, the work takes place in a
smaller part of the company. The goal, however, is wide-
spread mobilization. The digital initiative is small (see the
little red ball in the image) and is often driven completely
separately from existing operational activities (see the
light orange ball in the image).
Coordination phase. In this phase, the company gains
deeper understanding of its current digital activities as
well as understanding what works. Here, focus is placed
on how the company should work with digitalization and
these questions are primarily inward in the company.
Examples of questions are: What is the company culture
and which culture does it need? What new skills need
to be supplemented? What are the processes like? Does
the IT infrastructure provide the necessary support that
processes, employees, and data analysis require? A deep-
er-level strategy for a digital initiative is often drafted and
resources allocated in this phase. Often a specific depart-
ment is created for the initiative.
This is the most difficult maturity phase and places high
demands on good leadership because digital initiatives
have grown and become increasingly important while
existing business decreases. The result is a business need-
ing clearer coordination. Conflict between traditional and
digital business operations is a common challenge. Much
energy, therefore, goes inward to the business to coordi-
nate digital and existing operations, and maximal energy
forward is not attained.
Acceleration phase. As the company makes fundamental
changes to ways of working during the Coordination phase
(the how), it becomes easier and more natural to under-
stand and develop the company’s value proposition and
pany size. As a part of this ambition you can, in this book
and on the web, get insight into widely diverse companies
and industries as good examples to learn from.
THE THREE PHASES OF MATURITY IN DIGITAL
TRANSFORMATION
We discussed earlier that a high level of digital maturity
provides increased competitiveness. Companies that have
come far in their digital transformation have a high level
of digital maturity, and in the methodology transformation
as described in three maturity phases: Mobilization phase,
Coordination phase, and Acceleration phase.
Existing
activities
Digital
activities
Merged
activities
MOBILIZATION COORDINATION ACCELERATION
Why and Where? How? What?
Existing
activities
Digital
activities
Merged
activities
The three phases have the following features:
Mobilization phase. This is where the focus should be: to
get started, test, and mobilize resources. This means one
shouldn’t be too detailed in planning, but instead should
focus on stimulating interest and acceptance of the neces-
sity of transformation. Important aspects are to answer
why the transformation is important and develop a vision
of where the digitalization will take the company. It is

Digital maturity. Pinpoints how far a company has
come in its work adjusting to the new playing field digi-
talization has brought. A company’s level of innovation
and change leadership's ability to elicit innovation has a
profound influence on digital maturity. Digital maturity
in turn develops the company’s digital competitiveness.
Let’s look more closely at these three cornerstones.
First cornerstone: Innovation
Okay, let’s be clear. With the risk of sounding like
doomsday prophets, it’s time to take the old cliché “In-
novate or die!” seriously. Innovation is the mother of
competitiveness, something companies in traditional in-
dustries tend to forget. Innovation is no longer restricted
to a single department in a company, but instead is driven
equally as much by a company’s external relationships
and customers.
Technical development, driven by Moore's Law17
,
contributes both to higher efficiency and to new solu-
tions not previously possible to develop. With this rate
of growth, it is not sufficient to "do what we do a little
better every day." In all corporate disciplines, businesses
must constantly reimagine and challenge themselves to
increase the rate of change and keep pace with the out-
side world.
These days, the word innovation is on everyone's lips
and is viewed as a cure-all for one thing or the other. This
has meant, in a similar way as the words digitalization
and digital transformation, the risk of people talking at
cross-purposes. Therefore, it is important to clarify the
concept.
DEFINITION OF INNOVATION
An innovation is a new solution that is used in practice
and which improves revenue, cost or creates other
values in a company, that is, increases competitiveness.
revenue model, (the what). Thus, in the Acceleration phase,
more focus can be directed outward, toward the market.
In this phase, there is no distinction between strategy
for digital efforts and strategy for existing business op-
erations. There is, then, one vision and one strategy per-
meating the entire business, digital or not. The company
has a business that is a mix between digital efforts and
the previously existing business (dark orange ball in the
graph). In this way the initiative gets a stronger foothold
in the company and all energy is directed forward, which
accelerates both change and results.
The company can now continuously adapt to changes
in the surrounding environment. This increases the possi-
bility to develop a long-term, successful company.
THE THREE CORNERSTONES OF THE DIGITAL
MATURITY MATRIX
How a company transforms from the Mobilization to the
Coordination phase and further to the Acceleration phase
is based on three things:
Innovation. New solutions that are used in practice.
Change leadership. Ensures change is created within
individual employees and within the organization as a
whole. An important part of this is how employees adapt
to innovations.
When the rate of
change outside
an organization is
greater than the
rate of change
inside, the end
is near …
Jack Welch,
former chairman
and CEO of GE
Change
leadership
Digital
maturity COMPETITIVENESS
Innovation

55
on how quickly they adapt to new innovations. He calls
the fastest group innovators, followed by early adopters
and early majority. Those who belong to the slower
half are separated into late majority and laggards. The
various groups exert sequential influence on each other,
where those who are earliest to adapt inspire the latter to
change18
.
The normal distribution curve can also be expressed
through the so-called S-curve, which is frequently used
to describe degree of adaptation, that is, the proportion
or percentage of a population or target group using an
innovation. The figure above shows clearly how adapta-
tion growth increases in the beginning, peaks when half
have adopted an innovation, and then it decreases. In our
methodology, the S-curve is used to describe digital ma-
turity in industries, companies, and individuals. It is also
used to describe how the three levels of waves of change,
(Technology, Products and services, and Behavior) are
adapted through Roger’s phases19
.
Innovation occurs in all parts of an organization, not just
the company's value proposition and revenue model. It
can also apply, for example, to processes, technologies,
or organization.
EBAY’S FIVE PRINCIPLES OF INNOVATION
Although it may sound paradoxical, creative processes,
which are an important part of the innovation process,
benefit from certain principles and rules. Meg Whitman,
CEO of Hewlett-Packard, presented five principles for
eBay's innovation when she was CEO of the company:
• Innovation is a mindset. We strive to ensure that eve-
ryone in the company is focused on innovation.
• Innovation is in our DNA. We build new products with
innovation from the inside out.
• Cannibalization does not scare us. We would rather
cannibalize ourselves than have someone else canni-
balizing us.
• Some people are gifted pioneering innovators. We
call them "Baby Tigers" and we nurture them and give
them room to succeed.
• There can only be so much structure to creating
innovations. We are always open to new ideas and
serendipitous finds.
Rogers sets the stage
More than 50 years ago, a book was released that has
become the foundation for how many companies view
their markets and how they should be managed. The
book, Diffusion of Innovations, was written by Everett
M. Rogers and introduces, among other things, the well-
known term ”early adopters”. What Rogers describes is
how customers embrace innovation at different speeds.
This can be described by a normal distribution curve
separating customers into different groups depending
ADAPTION%
0
25
50
75
100
2.5%
INNOVATORS
13.5%
EARLY
ADOPTERS
34%
EARLY
MAJORITY
34%
LATE
MAJORITY
16%
LAGGARDS

Disruptive innovation21
. Disruptive innovation is a
phenomenon and a concept coined by Harvard professor
Clayton Christensen in his book Innovator's Dilemma22
.
Disruptive innovation is new technology and new busi-
ness models breaking down existing markets and value
networks at the same time as new ones are created. The
connotation of disruptive innovation has been in flux
since the book came out in 1997 and we, among many,
have a broader view of disruptive innovation than Chris-
tensen. We refer to all innovation that through technolo-
gy and new business models significantly changes a mar-
ket or creates a new market. According to Christensen,
a disruptive innovation also requires lower pricing than
existing products and have a value proposition that exist-
ing competitors’ customers perceive to be of lower qual-
ity. For us, Uber is an example of disruptive innovation,
but not according to Christensen’s definition since Uber
is perceived by the existing market to be higher, rather
than lower, quality compared to competitors23
. The Mod-
el T Ford is an example of disruptive innovation (even
according to Christensen). It was the first car produced
on an assembly line, which greatly reduced the consumer
price and enabled many to purchase a car. This in turn
led to a huge change in transportation routines and al-
ternative transportation such as horse and buggy were
eliminated.
The market's changeability influences how leaders
balance current and future business
Companies need to manage current business (through
focus on existing operations and incremental innovation)
as well as future business (through structural and disrup-
tive innovation).20
Incremental innovation. This refers to small incremental
improvements within existing operations and offerings.
Kaizen and ISO 9001 are related concepts. Incremental in-
novation is primarily employed for short-term competitive
edge or in markets where change is not as great. One ex-
ample is when the auto industry releases a new model with
a series of smaller improvements compared with earlier
models, such as a more energy efficient motor, five doors
compared to the previous three, or back seat TV screens.
Structural innovation. Improvements that have a major
impact on a part of or on the entire value network, such as
technology or processes, are called structural innovation.
This type of innovation is more long-term than incre-
mental innovation. One example is ethanol cars that were
developed to reduce environmental impact. This affected
the market in the sense that many chose to purchase these
cars (thanks to environmental rebates in some countries),
but no complete change in the market occurred.
INCREM
ENTAL
INNOVATION
STRUCTURAL
INNOVATION
DEGREE OF CHANGE
DISRUPTIVE
INNOVATION

Processes. The recurring series of actions that exist to
support the organization in creating and delivering the
value proposition.
Infrastructure. The information technology available
to support the company's processes and how it integrates
with the value proposition.
Data & Analysis. The data collected, how it is analyzed
and used to make and implement decisions, and how it is
used in the value proposition.
Value proposition & Revenue model. Value proposi-
tions are the solutions that create value for the company's
customers and other target groups. The revenue model is
how the company makes money.
Touchpoints. Where target groups come into contact
with the company, and how the value proposition and
touchpoints are integrated.
Relationships. How the company interacts with its tar-
get groups, which relationships are developed, and how
these integrate with the value proposition.
All companies are on a journey of digital change, con-
sciously or not. The sooner a company acts proactively,
the better. The journey is challenging, and since the out-
side world, like the company and its employees, is dy-
namic, there is no simple roadmap. It is this complexity
the Digital Maturity Matrix aims to facilitate.
To understand the way digital maturity develops business
competitiveness, it is not enough for us to look only at
digital maturity on a general level. The subject needs
to be broken down into smaller parts. We divide digital
maturity into nine areas of activity that we call digital
motors. All of these motors are affected by digitalization
and are areas that companies must work with to develop
competitiveness. The nine digital motors are:
Values, Vision & Mission. The vision is a company's
long-term goal. How the company will reach its long-
term goal and the answer to why it exists are its mission.
The aspects that are held in high regard along the journey
are the values.
Strategy work. How the work with strategy is conducted
and how the results of the work are documented, de-
ployed, and monitored in the organization.
Organization. The corporate culture, skills, and organi-
zational structure that exist in order to create and deliver
the value proposition.
CHAPTER 7
THE 9 DIGITAL MOTORS OF TRANSFORMATION

67
The nine motors range across the company's entire op-
erational structure. They encompass everything from the
company's plans and core values that are placed in the
Values, Mission and Vision to Strategy work, and to those
motors where the day-to-day work is performed and ana-
lyzed, Organization, Processes, Infrastructure, and Data
& Analysis, to the three final motors that are nearest the
market and customer, Value proposition & Revenue
model, Touchpoints and Relationships.
Definitions, explana-
tions, and insights of
key concepts within each
motor.
Data & Analysis
Value proposition & Revenue model
Touchpoints
Relationships
Values, Vision & Mission
Strategy work
Organization
Processes
Infrastructure
Data & Analysis
Touchpoints
Relationships
Each motor has its own digital maturity journey; the
foundation in the methodology is understanding the
development of the motors' maturity and how they are
interrelated. With this knowledge in place, the company
can prioritize and coordinate the work of digital transfor-
mation. This chapter describes each motor as well as a
number of selected waves of change to keep track of.

The vision is a company's long-term goal. How the com-
pany will reach its long-term goal and the answer to why
it exists are its mission. The aspects that are held in high
regard along the journey are the values.
• why the company exists,
• what the future vision is,
• which value the company creates for its target
groups,
• what the company does,
• what the company stands for,
• what is valued.
The journey from digital immaturity to maturity is a pro-
cess and as in all such journeys, the vision is a key tool
for success.32
The vision and mission provide clarity and
helps the organization make great strides forward. Digital
transformation, in the highest degree, requires clarity in
both vision and mission.
In all the interviews we have done, it has been highlight-
ed that this motor is vitally important throughout the
transformation. If companies fail to explain to employees
why digital transformation is important and what it will
lead to, they will be left behind. The probable outcome is
that the efforts made for the desired change are fruitless.
During a transformation, the purpose and use of the vi-
sion and mission changes. During the Mobilization phase
and the Coordination phase, it is beneficial to specify a
digital vision and mission to pinpoint the value created
by digitalization and to provide greater clarity. When
the digital way of working becomes a natural part of the
business - the digital maturity is high - the specific digital
vision and mission will have performed their roles, and
can be replaced with a vision and mission applicable for
the entire company. For maximum impact, these must
permeate all activities. As a result, the digital perspective
will be part of the overall vision and mission.
VALUES, VISION & MISSION
The vision is a company's long-term goal. How the
company will reach its long-term goal and the answer to
why it exists are its mission. The aspects that are held in
high regard along the journey are the values.
There are many definitions and applications of Values,
Vision, and Mission. These definitions often overlap. It
doesn't matter which you use. What does matter is the ef-
fect they have on the company. Together, Values, Vision,
and Mission should achieve the following:
• clarify what is valued,
• create a framework for the strategy and business
plan,
• assist the company in its positioning,
• create a push forward and influence employees
to stop doing certain things and start doing other
things in their work,
• help to attract customers, partners, suppliers, and
employees.

69
Normally, values should not be adapted to achieve great-
er digital maturity. However, they are important as they
provide the framework for the vision and mission. In
addition, values are the foundation in the organizational
culture that is key to successful digitalization.
Important waves of change
The answer to the question why
More and more, people want to work with something
truly meaningful. They want something more than fi-
nancial goals like gross margins, market share, and year-
on-year growth. Employees and customers all demand
transparency as well as moral and ethical behavior. The
topics of sustainability and CSR (Corporate Social Re-
sponsibility)33
now have more space than ever on corpo-
rate agendas. This shift has been accelerated, simplified,
and developed through digitalization, where collective
knowledge of a situation or event is quickly generated.
For example, a revealing picture of a company's pro-
duction facility or an e-mail conversation with customer
service can spread like wildfire in social media.
Companies able to answer the question why they exist
and commit in a wider context will be rewarded with
motivated employees and ambassadors both inside and
outside the company. This will in turn lead to better per-
formance and clear results in P&L statements.

One of the main promises of the methodology is to help
businesses figure out when to do what and how it should
be done.
Let's dive in and see how the different motors relate to
each other in the digital transformation journey. There is
no one-size-fits-all solution to all situations, but there is a
basic working order that serves as a good reference point
for most companies. We call it general best practice.
The arrows in the figure indicate the maturity each motor
should have in different phases. In early phase (red part
of the arrows), it is, for example, advantageous to prior-
itize Values, Vision & Mission. In the next phase (yellow
part of the arrows), Values, Vision & Mission remain in
the forefront while, at the same time, the focus should be
on how the company works. Thus, motors such as Organ-
ization and Data & Analysis should be given preference.
In the third phase (green part of the arrows), maturity of
the various motors levels out.
CHAPTER 8
INTERACTION AND DEVELOPMENT OF
DIGITAL MOTORS

105
Working in the Mobilization phase
The main task is ensuring that all
levels of the organization understand
why digital transformation is im-
portant and where it will lead. The
goal is to mobilize the will to change
and the force for change - to create
a sense of urgency. Central to this
phase is a willingness to try, test, and
learn, and in this way become more
digitally mature, paving the way to
the Coordination phase.
Working in the Coordination phase
Here, lessons from the Mobilization
phase are applied in order to start the
implementation of long-term initi-
atives. It is important to get others
on board and bring about a distinct
change in how the company works,
above all through a focus on Strategy
work, Organization, Processes, Infra-
structure, and Data & Analysis. To
a large degree, the focus here is the
coordination of existing operational
activities with digital initiatives.
Working in the Mobilization phase
In this phase, the emphasis is on
what needs to be done to fully meet
the target groups' needs, regardless
of touchpoints or technology. Here
the work is done as one company
with one plan and with one organ-
ization where everyone is working
towards the same goal.
Chapter 12, Make the most of the
waves, contains an in-depth review
of work in the different phases.
Values, Vision & Mission
Strategy work
Organization
Processes
Infrastructure
Data & Analysis
Touchpoints
Relationships
Why and Where?
How?
What?

LEADING AND ACHIEVING
DIGITAL
TRANSFORMATION
It’s a cakewalk, when you know how.
Gerry Lopez, surf legend, about surﬁng

Get in position (the starting point). You have to start
from the right position. To do so, the company must
understand their own digital maturity and that of other
industry stakeholders (digital positions).
Choose the right waves (the plan). This is done by
starting with general best practice and adjust according
to the company's digital position relative to the indus-
try, company strategy, and whether there are waves of
change significantly impacting the company. Altogether,
the company's best practice answers what the company
should focus on, more or less, in any given situation. The
last part of this step is to determine how far you want to
progress in each motor, and the time frame in which it
should happen. This desired position is called the digital
destination.
Make the most of the waves (implementation). It is now
time to act on the waves of change. This is done through
the company’s development of its digital maturity in the
three phases: from the Mobilization phase to the Coor-
dination phase and finally to the most mature stage, the
Acceleration phase.
In this section, we look at how digital transformation
is led and carried out - step by step. It is a long and
demanding process requiring much from you and your
organization. In our experience, the process itself is an
important part of the journey. The process provides an
understanding of the work involved and why the digital
journey needs to be implemented. Our intention with the
methodology and the book is that you relatively quickly
get a clear picture of where you are today and, with this
insight, acquire ideas and recommendations for your
onward journey.
Let’s return to the surfing analogy to describe the digital
transformation process. We’ll provide an in-depth, step-
by-step description of how the work is managed and
implemented - all to make the process as quick and effi-
cient as possible.
CHAPTER 9
THE TRANSFORMATION PROCESS

THE DIGITAL
MATURITY MATRIX
GET IN
POSITION
CHOOSE THE
RIGHT WAVES
MAKE THE
MOST
OF THE
WAVES • Identify the company’s
and the industry players'
digital maturity (digital
positions).
• Company maturity vs best practice
• Maturity in relation to industry players,
strategy, and waves of change
• Company best practice
• Digital destination
• Working in the
three phases

Maturity test on www.digitaltransformation.net. This test
is recommended if you would like more detailed feedback
and responses based on your company's specific setup. After
completing the test, you can see where your digital maturity is
distributed and how it differs from general best practice. Note
that the test should not be seen as an absolute way forward.
Instead, think of it as you would a personality test in a recruit-
ing process. The purpose of the test is to point companies in
the right direction and serve as a basis for good discussion.
In-depth analysis of the company. The most extensive
work and that which provides the best groundwork for anal-
ysis, discussion, and choices for paths forward is to combine
the test in the last point with an in-depth analysis of the com-
pany's digital maturity. That involves interviewing key people
and reviewing existing documentation and operations, motor
for motor. Once this is done, you will have a very good idea
of your company’s digital position and a starting point.
DIGITAL MATURITY INDEX PUTS A NUMBER ON
YOUR MATURITY
To quantify where you are, to use that in relation to your
market, and to see how your digital maturity evolves over
time, it is useful to track your Digital Maturity Index (DMI).
A company's DMI ranges from zero to one hundred per-
cent and is relative to the world outside the company. This
means that as the outside world's digital maturity develops,
your company also needs to mature to maintain position
and digital competitiveness.
The first thing a surfer needs to do in a surf competition is
throw herself into the water and swim out to get into posi-
tion. The position is selected based on the surfer's knowledge
of the water (for example, where the waves break and how
the seabed looks), what the surfer knows about the other
competitors, and his or her own strengths and weaknesses -
all to increase the chances of choosing the right wave.
Positioning takes place in a similar way for a company
that wants to transform. You start from the current situation.
The first step is to find out how far the company has come
in its digital transformation. You need to determine your
strengths and weaknesses and whether there are motors lag-
ging behind or motors that should go before others. These
answers also need to be put into context by comparing them
with the rest of the industry. A company may, for example,
be relatively well advanced in its digital transformation, but
still remain last in the field in relation to its competitors.
IDENTIFY THE COMPANY'S DIGITAL POSITION
There are three approaches to identifying how far a compa-
ny has come in its transformation:
A quick estimate based on the characteristics of each mo-
tor and phase is one way. There is a template you can copy
and use on page 122. Review the summary at the beginning
of the section The phase's characteristics and the in-depth
descriptions of each phase. Then fill in the template to best
describe your company and industry.
CHAPTER 10
GET INTO POSITION
What's your company's
Digital Maturity Index? Take
the digital maturity test on
www.digitaltransformation.net.

111
Values,
Vision & Mission
No vision
No answer to why
Comprehensive vision and mission
Digital vision and mission
One company, one vision, and one mission
There is a higher purpose
Strategy work Comprehensive strategy
Inflexible strategy
Lack of clarity in goals and KPIs
Overall and digital strategy
Relatively static strategy work
Uses the customer journey
One overall agile approach
Masters the customer journey
Clear objectives and KPIs completely clear
Organization Digital alibi
Departments in silos
Maintenance culture & competence
Active management
Coordinates digital and traditional
Increased innovation and digital skills
Digital leadership
One open and competent organization
Change culture
Processes Poor process mapping
No innovation process
Process mapping
Measures processes
Internal innovation process
Optimizes processes
Automation
Open innovation process
Infrastructure High technical debt
Missing a plan
Limited IT policy
More focus on core business
Module based
Modern work tools
Control, flexibility, and speed
All relevant data is made available
Needs-adapted tools
Data & Analysis Does not see waves of change
Intuitive decision-making
What happened?
Ongoing environmental scanning
More fact based
What will happen and why?
Automation
Facts & intuition
What is the best thing that can happen?
Value proposition
& Revenue model
Product and function
Usage and income bases
Transactional revenue
Digital value-added services
User experience
Recurring revenue
Ecosystem
Situational value propositions
Balance in the value proposition portfolio
Touch points Purchased touchpoints
Touchpoints viewed separately
Own, earned, and borrowed touchpoints
Coordinate online and offline
Automation
Omni-channel
Relationships Transaction
Mass marketing
Company to customers
Relationship
Lifetime value
Companies and customers
Value-adding relationships
Community
Companies with customers
The phases' characteristics
The current state is the first thing to identify. In the figure
below, you can see common characteristics of companies
with different digital maturity levels. Can you identify
where you are?

WORKING IN THE MOBILIZATION PHASE
What should be achieved in this phase: Ensure that
all levels of the organization understand why digital
transformation is important and where it will lead. The
goal is to mobilize the will to change and the power to
change - to obtain a sense of urgency. This phase is
about learning and daring to explore, in order to become
more digitally mature and pave the way for entry into the
Coordination phase.
• Engaging the owners, board, and management team
• Getting customer and market insight
• Developing the vision and mission
• Describing how the company should work
• Organizing the transformation
• Building the transformation team
• Eliminating barriers
• Demonstrating achievements
• Increasing the organization's digital competence
• Laying the foundation for process work
• Building infrastructure to grow into
• Exploring value proposition and revenue model
• Exploring touchpoints and relationships
Time for action! Now that the plan is formed, it's finally
time to put it into practice. In this chapter, we make rec-
ommendations based on general best practice: These are
the recommendations from the previous chapter that you
adjusted according to your company's specific situation. In
addition to the recommendations below, additional, more
company-specific activities will surely follow. Evaluate
these based on your digital maturity and the company's
best practices. The overall goal is for you to reach your
digital destination as efficiently as possible at the same
time as the company's competitiveness increases.
CHAPTER 12
MAKE THE MOST OF THE WAVES

129
you should ask yourself. When these insights fall into
place, enthusiasm grows for adapting and meeting custom-
ers’ changing needs and behaviors. Also, a keenness devel-
ops for giving new competitors a run for their money.
This generates momentum helping the transformation
work in many ways. More focus on the customer and the
outside world means less attention to conflicts between
departments and workplace politics. The customer and
competitors’ digital behavior rub off on the organization -
the ball is rolling.
The digital transformation begins in this phase, and the
stronger the foundation, the easier the change will be
going forward. It's essential to create understanding,
enthusiasm, and commitment in this phase, especially
within management teams.
Keep in mind that the efforts required are in reverse
proportion to the company's digital maturity. It is a bit
like pushing a car to get it rolling. It requires the most
power when it stands still. When it starts to roll, it's eas-
ier. Be careful with timing to foster and create energy in
the organization so that it can be well managed and guid-
ed in the right direction. Below are our recommendations
for the Mobilization phase:
Engaging the owners, board, and management team
Management's commitment to digital transformation is
the single most important success factor79
. The CEO,
management teams, and other key personnel need to take
the lead early on and emphasize that the business is in-
creasingly affected by digitalization. The better the lead-
ership, the more power it will have in the organization.
Despite these lessons, it is all too common that good
leadership is absent.
It's not enough that the CEO and management are in-
volved; the board and owners must also be along for the
journey. A long-term commitment that reaches beyond
the results of individual initiatives is critical.
The way to involve owners and directors often begins
with our following recommendations.
Getting customer and market insight
Digital transformation begins with the realization that
the world looks different and most importantly, with an
understanding of how customers and the market have
changed. What are the waves of change and which of
these should your company take? These are questions
SCHIBSTED'S OWNER SUPPORT
LAYS THE FOUNDATION FOR SUCCESS
One of the linchpins of Schibsted reaching the position
they have today was owner support. "We had a good
working environment early on, in that the largest owner
stood behind us. It was extremely important," says Sverre
Munck, former Director of Strategy at Schibsted. He re-
calls a meeting at which a colleague argued before the
board: "The money we spend on the Internet is a known
cost. But what we don't know is the cost of not spending
money on the Internet." This says quite a lot about the
reasoning early on.
The dotcom crash came around the year 2000, putting
the brakes on much of the world’s economy, with one
result being severe dives in advertisement revenue. Af-
tonbladet, for example, suffered a loss of 34 million SEK
in 2000. "They were tough times, but we were emphatic
with the owners that we must hang on because we knew
things would turn around. We received a lot of criticism,
and both Kjell Aamot (former CEO)80
and I were close to
losing our jobs," recalls Sverre. "However, we managed
to get the owners with us and we persevered, above all
focusing on VG, Aftonbladet, and Finn.no. Seen in retro-
spect, this was the best decision we've made. It gave us
the edge we still have today," he explains further.

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