Learning Journal 4

Meutia Noviyani

Leading Disruptive Change in a Digital Economy

Deirdre Silberstein

2/15/2023
 Table of Contents

1. Digital Transformation is not about Technology.....................................................................3

1.1. Summary...........................................................................................................................3
1.2. Reflection..........................................................................................................................4
1.3. Question............................................................................................................................5
2. The Transformative Business Model.......................................................................................5
2.1. Summary...........................................................................................................................5
2.2. Reflection..........................................................................................................................6
2.3. Question............................................................................................................................6
3. What is Disruptive Innovation.................................................................................................6
3.1. Summary...........................................................................................................................6
3.2. Reflection..........................................................................................................................7
3.3. Question............................................................................................................................8
4. What do you really mean by business “transformation”?........................................................8
4.1. Summary...........................................................................................................................8
4.2. Reflection..........................................................................................................................8
4.3. Question............................................................................................................................9
5. What the Best Transformational Leaders Do...........................................................................9
5.1. Summary...........................................................................................................................9
5.2. Reflection........................................................................................................................10
5.3. Question..........................................................................................................................10
6. Chapter 1 – The Gap Nobody Knows....................................................................................10
6.1. Summary.........................................................................................................................10
6.2. Reflection........................................................................................................................11
6.3. Question..........................................................................................................................11
7. Chapter 2 – The Execution Difference...................................................................................11
7.1. Summary.........................................................................................................................11
7.2. Reflection........................................................................................................................12
7.3. Question..........................................................................................................................13
8. Chapter 3 – Building Block One............................................................................................13
8.1. Summary.........................................................................................................................13
8.2. Reflection........................................................................................................................14
8.3. Question..........................................................................................................................14
References.....................................................................................................................................14

1. Digital Transformation is not about Technology

1.1. Summary

Tabrizi et al (2019) mentioned 5 Key lessons to succeed in your digital transformation

plans are:

1. Figure out your business strategy before investing in anything

You can't just use one tool and work around it. First, focus on the goal and strategy, and

then choose the best tool for the job. Leaders sometimes require a combination of multiple

visions rather than a single technology to implement a specific strategy (Tabrizi et al., 2019).

2. Leverage insiders

Don't just hire a consultant to tell the company to transform into something that doesn't fit

the company. Solutions can be found inside the company, from the people who have the most

knowledge of the business in the daily operations (Tabrizi et al., 2019).

3. Design customer experience from the outside in

If one of the goals is to improve customer experience, then the effort is fixed it will rely

on the customer input. Holding focus groups, testing, and reviewing feedback will help in

understanding customer needs (Tabrizi et al., 2019).

4. Recognize employees' fear of being replaced

When the employees know that a transformation is imminent, they fear for the safety of

their jobs, this leads to resistance. Instead, emphasize that transformation is an opportunity for

employees to upgrade their expertise for the future (Tabrizi et al., 2019).

5. Bring Silicon Valley start-up culture inside

 Since the process of transformation is full of uncertainties, it's best to be agile and ready

for change (Tabrizi et al., 2019).

1.2. Reflection

I talked about this in my previous learning journal, but this reading also reflects the

change management theory. I feel that the transformation process magnifies how the operations

model is flawed, as Tabrizi et al. (2019) mention in the article. Whenever there are changes in

the company, the operations go on with a few changes but mostly do with the same basic manual

model. I agree with the 5 key lessons that are presented by the author. It's a good way for starting

the journey of digital transformation, although not all of them are applicable in a national

company and will probably apply better inside a smaller-scale division.

1.3. Question

My company consists of hundreds of branches with its problem. How can the company

attempt to learn from their employee’s broad expertise efficiently to apply the second lesson?

2. The Transformative Business Model

2.1. Summary

A transformation doesn’t have to mean the adoption of new technology, instead, it's a

business model that can link a new technology to an emerging market need (Kavadias et al.,

2016). It explains the results of their research in six keys to successfully making a transformative

business model:

1. A more personalized product or service

2. A closed-loop process
3. Asset sharing
4. Usage-based pricing
 5. Collaborative ecosystem
6. Agile and adaptive organization

This six-step process is also supported by technological advancements in many areas of

the business ecosystem, such as sensor development, big data, artificial intelligence, machine

learning, cloud technology, and manufacturing development (nanotechnology and 3D printing)

(Kavadias et al., 2016). However, business growth is always market dependent, which is

complicated by greater diversity in customer preferences, higher factor prices, and increased

regulation for a company to gain market share (Kavadias et al., 2016).

Combining the six trends, technological development, and challenges of the market the

right way will transform the business into the future (Kavadias et al., 2016). A company can tick

one or all boxes. It's not guaranteed success, but it would ensure your business model links

market needs with emerging technologies (Kavadias et al., 2016).

2.2. Reflection

After reviewing these six keys to digitally transforming your business, I understand the

struggle of incumbents trying to reinvent their entire business model, brand, and mindset at the

same time to compete with entrants. This emphasizes the importance of knowing yourself before

changing because changing your business model and organization to be more agile will be

nothing more than jargon if your employees don't understand what it means to be agile.

Furthermore, transforming your business model into a collaborative ecosystem or redesigning

products into a closed-loop process is not cheap. A company must understand what it means to

"tick all the boxes" and how it can do so. Finding the fit and doing a good job at it will make a

company more successful in transforming rather than trying to check as many boxes as possible.

2.3. Question
Is it possible that an incumbent is unable to transform because none of the processes in the

business can fit into their business and operating model?

3. What is Disruptive Innovation

3.1. Summary

Despite widespread adoption, the theory's fundamental principles have been widely

misunderstood and frequently misapplied. Researchers, authors, and consultants frequently use

the term "disruptive innovation" to describe any situation in which an industry is shaken up and

previously successful incumbents falter (Christensen et al., 2015).

Christensen et al. (2015) mentioned that disrupters usually grab the market incumbents

overlook, the low-end market and the untapped market. Uber, having it mentioned by

Christensen et al. (2015) as an example, doesn't fit into the two categories that make a company

disrupter because:

1. Disruption is a process
2. Disrupters build a different business model from incumbents
3. Some disruptive innovations succeed, and some don't
4. The word "Disrupt or be disrupted" can be misguided

Christensen et al. (2015) explain that disruption can show that management decisions

should not be based on the disruption idea. Instead, it aids them in making a strategic decision

between following a disruptive or sustaining course. The characteristics of disruption are they

improve over time, compelled by the pursuit of profitability and new market share, without

emulating the incumbent's high costs (Christensen et al., 2015). The study said disruption theory

does not explain everything about innovation specifically or business success generally.
 3.2. Reflection

I believe it is critical to understand what constitutes a disruption and what does not. Some

businesses can succeed without being disruptors, and combining strategies that are incompatible

with one another will cause more harm than good. Furthermore, I agree with the fourth point

regarding the mantra "disrupt or be disrupted." This so-called mantra will cause panic within the

organization, potentially leading to a failed transformation that is not only costly but also

ineffective because it was implemented without proper understanding. Responding to threats is

expected, but reacting rashly will only harm the company.

3.3. Question

Is there any example of an incumbent who succeeds in innovation and disrupts their

industry in the process?

4. What do you really mean by business “transformation”?

4.1. Summary

According to the article, there are three efforts to define business transformation. The

first is operational. Many businesses that are "going digital" fall into this category, as they use

new technologies to solve old problems (Anthony, 2016). In a rapidly changing world,

improving an old game is simply not enough (Anthony, 2016). The next is an operational mode

or core transformation, which involves doing what you are currently doing in a fundamentally

different way. The last one is strategic it involves changing the very essence of the company

(Anthony, 2016).
 These efforts also need to be measured in different ways. Operational model

transformation should change the metrics the company uses to track performance, using the same

metric would not accurately track the transformation (Anthony, 2016).

Leaders should also combine two types of transformation: one that strengthens today's

business by reinventing the core operating model, and one that creates tomorrow's core business

(Anthony, 2016). To own their future rather than be disrupted by it, leaders must face the

existential challenge of disruptive change.

4.2. Reflection

The first effort in which a company goes digital to solve old problems occurs in my

company as well. They are attempting to solve old problems by digitizing the process while

failing to change the mindset. They were developing more web applications and dashboards to

address the jumbled business processes that had become more rigid as a result of digitization.

Furthermore, the digital process does not streamline anything, but it adds more work on top of

the manual version, with papers and word document reports, which has contributed to skepticism

among many older employees when it comes to shifting toward digital transformation. My

company's big homework is to understand the meaning of transformation before we start

working on it.

4.3. Question

How do you measure success in digital transformation besides surviving? Is there any

financial metric available to track the successes of a company undergoing digital transformation?

5. What the Best Transformational Leaders Do

5.1. Summary
 Anthony and Schwartz (2017) find that companies that show substantial progress toward

transformation use three metrics: new growth, core repositioning, and financial performance.

Among the 10 companies that fit the metrics (Amazon, Netflix, Priceline, Apple, Aetna, Adobe,

DaVita, Microsoft, Danone, and ThyssenKrupp), they share similar characteristics as well as the

strategy they employed (Anthony & Schwartz, 2017). The characteristics mentioned in the

articles are:

1. Transformational CEO tend to be "insider outsiders,"

2. They Strategically Pursue two separate Journeys,
3. They Use culture change to drive engagement,
4. They Communicate Powerful narratives about the future,
5. They develop a road map before disruption takes hold.

Transformation entails more than simply changing an organization's cost structure or

converting analog to digital processes. Rather, it is a multiphase strategy for repositioning today's

business while discovering new growth opportunities (Anthony & Schwartz, 2017).

5.2. Reflection

After considering the similarities in the characteristics of those companies, I believe they

deserve to be on the list. However, some factors are not visible to the public that drive the

company to where it is now. Other companies, both incumbents and newcomers, should look up

to those ten companies. The CEO's resilience, innovative thinking, and bravery in taking risks

are admirable. Finally, the research emphasizes the importance of strong leadership, a clear

vision for the future, a commitment to cultural change, and a focus on anticipating and adapting

to disruption.

5.3. Question
Can the value of the company determine the success of a company's effort to transform digitally?

6. Chapter 1 – The Gap Nobody Knows

6.1. Summary

Bossidy and Charan (2002) believe that execution is the missing link between goals and

outcomes. Many people have excellent ideas and plans, but they fail to put them into action.

They emphasize that execution is about taking the right action in the right way, not just taking

action. Moreover, all leaders must practice the discipline of execution at all levels (Bossidy &

Charan, 2002). In its most fundamental sense, execution is a systematic way of exposing reality

and acting on it (Bossidy & Charan, 2002).

The heart of execution lies in the three core processes: people, strategy, and operations

process (Bossidy & Charan, 2002). Most importantly, the business leader must run the three core

processes with intensity and rigor, driven by execution as the part of organization's culture

(Bossidy & Charan, 2002). This involves setting clear goals, defining specific actions to achieve

those goals, and holding people accountable for their performance.

Organizations don't execute unless the right people, individually and collectively, focus

on the right details at the right time (Bossidy & Charan, 2002).

6.2. Reflection

This has happened before in my company. They continued to encourage employees to

transform digitally, but when the leader was asked what it was that we needed to transform

digitally, or even something as simple as what is digital, they had no answer. Like the CEO at the

beginning of the chapter, the transformation plan was meticulously crafted. However, execution

fails to reach all levels and is abandoned at the level of line managers, who would rather get busy
work done than execute a management plan. This is why only certain levels of the company feel

transformative, while the rest are stuck in the same loop with extra work to follow management's

orders.

6.3. Question

In a big corporation (like my company) CEO can't be hands-on in the business operation, who

should be the first executor of the business strategy?

7. Chapter 2 – The Execution Difference

7.1. Summary

Bossidy and Charan (2002) retold stories about three major corporations in this chapter:

Xerox, Lucent, and EDS. They primarily discussed the three companies' execution failures and

successes. Xerox and Lucent failed to execute their large-scale strategies and financial

objectives, whereas EDS succeeded through disciplined execution. The main difference between

those companies is knowing their capabilities before setting and executing goals.

The steps to execute the strategy were mentioned by the authors. The first thing is to

involve all the responsible people for the plan's outcome when shaping the plan. The second is to

ask those people about the hows of execution: how were they going to achieve their target on a

timely basis, their inventory, and cost and quality goals (Bossidy & Charan, 2002). Third, setting

milestones for the progress of the plan. Fourth and last, setting up a contingency plan or risk

management plan.

The discipline of execution is based on a set of building blocks that every leader must use

to design, install, and operate effectively the three core processes rigorously and consistently

(Bossidy & Charan, 2002).

 7.2. Reflection

The most important thing Dick Brown did, aside from executing the entire thing with

unrivaled discipline, was how he got into people's heads by sending weekly emails to the entire

organization. A CEO who does this will boost employee morale by letting them know who he is

and how he plans to help the company succeed. This is what many transformations lack: the

people in charge of everything are incapable of carrying it out with discipline. Not every CEO is

capable of reaching out to the entire organization; most CEOs, as mentioned by the authors, are

indeed high-level thinkers. Even so, not every employee will deem emails from a CEO as

personalized; to be honest, I've received one as well, but it was one of those once-a-year emails.

Another thing I took away from the reading was the importance of hiring the right person for the

job. Not only that, but it's difficult; it takes bravery to deny an underperforming executive the job

for which they were supposed to be qualified.

7.3. Question

If many CEO are high-level thinkers, is it better for the company to make an exclusive execution

team or use the other c-suites to execute the management plan?

8. Chapter 3 – Building Block One

8.1. Summary

This chapter talked about the seven essential behavior that forms the first building block

of execution (Bossidy & Charan, 2002).

The authors outline seven essential behaviors that leaders must exhibit to drive execution

success:
 1. Know your business - To set clear goals and execute strategies effectively, leaders

must have a thorough understanding of the business, including SWOT analysis, and

building personal connections.

2. Insist on realism - Leaders must be honest and realistic in setting goals and assessing

progress, understanding the capability of the company.

3. Set clear goals and priorities - Leaders must establish specific, measurable, and

achievable goals for their teams and ensure that they are understood.

4. Follow through - Leaders must keep promises and hold themselves and their teams

accountable for results.

5. Reward the doers - Leaders must recognize and reward those who can execute

effectively and deliver results.

6. Expand people's capabilities through coaching - Leaders must develop their people

and build capabilities through training, coaching, and mentoring.

7. Know yourself - Leaders must be aware of their strengths and weaknesses and work

to improve in areas where they are lacking.

Additionally, the authors mention emotional fortitude as a way to improve oneself as a

leader or person. Emotional fortitude is comprised of four characteristics: authenticity, self-

awareness, self-mastery, and humility (Bossidy & Charan, 2002).

8.2. Reflection

Execution is the responsibility of the entire organization to successfully achieve the goal.

I identify more with the emotional fortitude section because it is applicable not only as a leader

at work but also in everyday life. Having this four-fold emotional fortitude as your personality as

a leader will lead you and your team to greater success. As a person, this will lead to a greater
sense of purpose in life. People will generally believe you if you are genuine. Knowing your

limit and how far you can push it will help you in the long run. Self-mastery will assist you in

developing accountability and confidence. Humility teaches you to admit your mistakes rather

than be arrogant. Overall, a leader must be more than just intelligent; they must also recognize

that turning an idea into reality necessitates the most difficult step, known as an execution.

8.3. Question

Leaders can't always reward people or divisions that keep delivering results; when or how is it

appropriate to reward them, the employees?

References

Anthony, S. D. (2016, February 29). What Do You Really Mean by Business “Transformation”?

Harvard Business Review. Retrieved February 15, 2023, from

https://hbr.org/2016/02/what-do-you-really-mean-by-business-transformation

Anthony, S. D., & Schwartz, E. I. (2017, May 8). What the Best Transformational Leaders Do.

Harvard Business Review. Retrieved February 15, 2023, from

https://hbr.org/2017/05/what-the-best-transformational-leaders-do

Bossidy, L., & Charan, R. (2002). Execution: The Discipline of Getting Things Done. Crown.

Christensen, C. M., Raynor, M. E., & McDonald, R. (2015, December). What is Disruptive

Innovation? Harvard Business Review. Retrieved February 15, 2023, from

https://hbr.org/2015/12/what-is-disruptive-innovation
Kavadias, S., Ladas, K., & Loch, C. (2016, October). The Transformative Business Model.

Harvard Business Review. Retrieved February 15, 2023, from

https://hbr.org/2016/10/the-transformative-business-model

Tabrizi, B., Lam, E., Girard, K., & Irvin, V. (2019, March 13). Digital Transformation Is Not

About Technology. Harvard Business Review. Retrieved February 15, 2023, from

https://hbr.org/2019/03/digital-transformation-is-not-about-technology?

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