Why Digital Transformation Transcends Technology

Digital Mindset: How to Innovate and Lead Your Business for the Future | Illustration: Norman Gracia

Digital transformation places unique demands on global business leaders. Are you ready to meet the challenge and have a truly digital mindset? | Illustration: Norman Gracia

Technology has advanced at such breakneck speed over the last decades that it’s hard to gain a sense of perspective. Think about it: corporate workspaces were void of desktop computers in the not-too-distant past and our omnipresent smartphones didn’t emerge until a mere 10 years ago.

Today’s digital landscape paints a drastically different picture. Global connections now number in the billions and will only continue to grow, triggering a paradigm shift that presents both challenges and opportunities for businesses worldwide.

In order to effectively embrace and exploit digital transformation, global firms should realize that its scope transcends technology, according to Prof. Evgeny Káganer of IESE Business School. Rather, it denotes a disruptive force that can potentially generate an organization-wide impact.

“The fall-out of digitalization can run the gamut, from shaking up certain elements of the value chain to upturning entire industries. For this reason, businesses need to pinpoint exactly where it’s concentrated since that ultimately informs the changes they’ll need to make on strategic and organizational levels.”

Where to start? Prof. Káganer advises firms to first analyze the scope of digital transformation on their business model. Will it impact our core business by altering the fundamental value proposition we offer to our customers? Will digitalization influence the types of customers we serve, or change the way we acquire, satisfy and retain them?

Companies also need to evaluate potential changes on activities related to their operating model, partnerships they rely on to create value, as well as main revenue streams. Timing is another important factor: is change already here or will it arrive a few years down the line?

Beyond the business model, building an organizational structure that fosters and supports digital transformation is key. “I always stress that digitization is not ‘just about digital,’ says Prof. Káganer. “In addition to changes in the firm’s IT architecture and digital touchpoints, it impacts human resource strategy since success will only ensue if there’s a talent pool in place with the right competencies to drive change. It also affects work practices, which is why a collective ‘digital mindset’ is so important. It aligns the organization around a shared understanding and set of beliefs on how people are going to work together to achieve common goals.”

Without a doubt, digital transformation places unique demands on global business leaders, but Prof. Káganer is optimistic.

“World markets are wide open right now and offer exciting opportunities for both new entrants and established incumbents. Those capable of seeing their organization through a digital lens will be distinctively poised to build better businesses, discover new sources of revenues and capture new forms of value.”


IESE’s focused program “Digital Mindset: How to Innovate and Lead Your Business for the Future” empowers senior executives to better design and execute strategies in a digitally driven environment. Don’t miss it! The next editions will be held in: Barcelona, May 28-30, 2019 and New York, November 6-8, 2019.

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