The DX Roadmap: a brief introduction

In the seven years since publishing my last book, I have focused my work on understanding the differences between the large majority of businesses that are struggling and losing ground in their efforts at digital transformation vs. those established businesses that are driving real transformative growth and change through their digital efforts.

The good news is that we now have many examples to learn from in terms of digital transformation (DX) success: Disney, Walmart, Air Liquide, Mastercard, Acuity Insurance, the New York Times Company, National Commercial Bank Saudi, and many others.

In my new book, The Digital Transformation Roadmap, I introduce a practical roadmap for any leader attempting to transform their organization for the digital era.

The DX Roadmap is a framework of five iterative steps to navigate your own path to DX success for your business.

I developed the DX Roadmap based on my experience advising CEOs and Chief Digital Officers at companies in varying industries and locations and with different sizes and ownership structures, as well as the experience of scores of other companies that I have followed in my research.

The Five Steps

Each of the five steps of the DX Roadmap relates to one of the key barriers to effective digital transformation which I described last week: vision, priorities, experimentation, governance, and capabilities.

It is important to understand that the steps of the DX Roadmap are not like steps on a ladder that you climb once and leave behind. Although there is a sequence to starting them (begin Step 1, then begin Step 2…), the work of each step continues as you advance to the others.

DX is not a finite project. Its change will be iterative and cumulative as you deepen and broaden the transformation of your organization over time.

With that said, let’s take a look at the five steps.

Step 1. VISION: Define a Shared Vision

In the first step of the DX Roadmap, your goal is to define a shared vision of the digital future for your organization.

This starts with describing the future landscape of your industry, shaped by digital forces. It includes defining the unique advantages that give you a right to win in this digital future. It means choosing a North Star goal for the impact your work will have on customers and others. And it means spelling out a business theory of how you will capture value and earn a return on your digital investments.

When done right, this step will enable your business to lead proactively rather than react to external trends, to invest only in digital initiatives where you have a competitive advantage, to clearly define the business impact of digital investments, and to win the backing of investors as well as the employees who will drive your digital agenda forward.

Step 2. PRIORITIES: Pick the Problems That Matter Most

In the second step of the DX Roadmap, your goal is to define the strategic priorities that will guide your digital growth agenda.

This starts with looking at strategy through the twin lenses of problems to solve and opportunities to pursue. This step uses a variety of tools (such as customer journey mapping and interviews) to identify the most valuable problems and opportunities for your business. And it uses problem/opportunity statements to define strategy and spark ideas for digital innovation at every level of your enterprise.

Done right, this step will enable you to provide direction to teams across your organization, focus digital on solving problems and not adopting technologies, ensure digital delivers growth, and accelerate change with new ventures at every level and in every department.

Step 3. EXPERIMENTATION: Validate New Ventures

In the third step of the DX Roadmap, your goal is to rapidly test new digital ventures in order to validate which ones will create value for your customers and the firm.

The step starts with thinking like a scientist: defining your hypotheses and designing experiments to test your business assumptions. It uses iterative metrics to gather data directly from customers. It uses iterative prototypes and minimum viable products (MVPs), each designed to answer a specific question. And it uses a new model, the Four Stages of Validation, to sequence learning and guide any venture on its path from new idea to business at scale.

When done right, this step will enable your business to test many new ideas and learn which work best, make decisions based on data from customers, keep your failures cheap and your bias toward risk taking, and iterate quickly to build innovations with value at scale.

Step 4. GOVERNANCE: Manage Growth at Scale

In the fourth step of the DX Roadmap, your goal is to design governance models to scale digital growth across the enterprise.

This means defining rules and decision rights for small, multifunctional teams; creating structures (like labs, hackathons, and venture funds) that provide flexible pools of resources; establishing boards that green-light new ventures and oversee iterative funding; and managing three paths to growth—inside the core, partnered with the core, and outside the core—with the right rules and governance for each.

When done right, this step will enable you to empower teams to drive growth, allocate resources flexibly, quickly shut down ventures that are not working, and manage a steady pipeline of digital innovations both in your core and beyond it.

Step 5. CAPABILITIES: Grow Tech, Talent, and Culture

In the last step of the Roadmap, your goal is to invest in the technology, talent, and culture that will be critical to your digital future.

This includes investing in technology with a modular architecture, data assets, and effective governance. It means growing your digital skills by managing the talent lifecycle from hiring to training, retaining, and exiting. It means defining the culture—shared mindsets and behavior—that will support your strategy; communicating that culture with stories and symbols; and enabling that culture through everyday processes.

When done right, this step will enable your business to integrate tech across silos and partners, use data to provide a single source of truth to managers, give teams the skills to build their own digital solutions, and empower employees at every level to drive bottom-up change.

Putting the Roadmap to Work

Because digital transformation must happen at every level of the organization, the DX Roadmap is designed to zoom in or zoom out. Each step is applicable whatever your role—whether you are CEO, CDO, directing digital for a business unit, leading a functional team like human resources, or designing a new digital product.

Lastly, the DX Roadmap is designed to be started quickly so that you can learn by doing and see immediate results.

Remember, real DX is iterative in nature. Once started, the five steps will repeat, overlap, and support one another. As you progress, your transformation will both deepen and broaden in scope. The main point is to get started and to learn by doing. Don’t wait for a five year plan; start something in ninety days!

DX is not about spending months planning a multiyear process and then faithfully carrying it out. It is about starting the first steps now and learning as you go.

In future issues of this newsletter, I will dig into more of the specifics of the five steps of the DX Roadmap. In the book, each step is explored in great detail and illustrated with real-world case studies from a range of industries: banking, insurance, retail, consumer goods, media, telecom, technology, automotive, energy, health care, nonprofit, industrial manufacturing, and even container shipping.

Keep in touch

I’d love to hear your thoughts on what you have seen that had the most impact in a truly successful digital transformation that you have experienced.

Please feel free to comment, or to hit reply to this email.

See you next week!

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