What Is Digital Transformation?

Defining DX, a decade after I started exploring it.

Year ago, I was invited to speak in Italy on my 2016 book, “The Digital Transformation Playbook.” (The first book written on the topic of digital transformation, it has since become a bestseller, available in over a dozen languages).

Before I took to the stage, my Milanese host welcomed me, saying, “We are so happy that David Rogers is here to speak to us about digital transformation because it is a topic that all of us are talking about. And yet, digital transformation is like an empty briefcase…”

Pause. He smiled and continued.

“Everyone is carrying it around, but no one knows what’s inside it.”

A Brief Definition

I realized that day the importance of defining “digital transformation” (or, DX) before beginning any serious discussion of it.

My new book, “The Digital Transformation Roadmap” (2023) lays out an explicit definition of digital transformation:

Transforming an established business
to thrive in a world of constant digital change.

Three Truths of DX

Three important truths are embedded in that definition.

First, DX is about business, not technology. Too often, DX efforts are defined in terms of the technologies they intend to harness (A.I., blockchain, robotics, cloud computing, etc.). Of course, technology will be part of the implementation of any digital strategy you develop. But any DX effort should be framed around your business, your employees, and your customers—not around a list of technologies to adopt.

Second, DX is about changing an existing organization, not creating a start-up. A start-up’s mission is to search for a profitable business model and then scale up a new organization to support its growth. But an established business already has both a business model and an organization—with employees, customers, products, distribution channels, partners, and an established culture and way of working. Thus, DX is fundamentally about changing an organization that is already in motion. In physics, the tendency of a body in motion to keep moving in the same direction and at the same speed is called inertia. The more massive the body, the harder it is to change course. This is true in business as well, where your biggest enemy of transformation is inertia—the organization’s resistance to change.

Third, DX is a continuous process; it is not a project with start and end dates. This is because the digital revolution is not a single change that has happened (the birth of the internet, the shift to mobile, the rise of generative A.I.) that you must adapt to. The digital revolution is an ongoing acceleration of change being driven by successive waves of new technologies. It will continue to reinvent customer behaviors, business models, and economic systems far into the future. Buckle up for the ride!

A Formula for DX

For the mathematically inclined, the new book also offers a formula to explain DX. Digital transformation requires a combination of both digital strategy as well as organizational transformation. In short,

DX = D strategy + organizational X

The first part of this formula should be familiar to past readers. I have taught for many years that DX means rethinking strategy for the digital era across five domains: customers, competition, data, innovation, and value proposition. My last book introduced this framework of five domains, as well as a set of principles and tools to help leaders to overcome their “strategic blind spots” based on pre-digital thinking in each domain.

But it turns out that is not enough. In the years since writing that last book, I have seen that even when leaders do shift their strategic thinking to digital-first principles, their companies still struggle with organizational change.

It’s so common, it has become a cliché: The new digital strategy is laid out by senior leaders. The vision of transformation is explained, top-down, to all employees. And yet, months and years go by, and the CEO finds themselves stymied and frustrated by a lack of meaningful progress.

That common problem led me to refocus my own work—advising leaders, teaching executives, and doing research—to focus on the fundamental barriers to organizational change in DX, and to finding how they can each be overcome by any firm, no matter its age, size, or industry.

I’m delighted to share with you—in my new book and in the upcoming issues of this newsletter—what I have learned about these barriers, the five-part DX Roadmap that I have developed to address them, as well as a set of new tools to help leaders rebuild their organizations for a world of continuous digital change.

What Do You Think?

How do you define digital transformation, based on your own experience?

Is there a formula of two or three essential elements that you have seen?

Please share your own thoughts by clicking on “COMMENT” below—or by hitting “reply” to this email.

I’d love to hear your thoughts.

---