A STEP BY STEP GUIDE TO

DIGITAL TRANSFORMATION

TIME

An Essential Guide to Creating High Margin

Competitive Advantage in a Digital World

Prof Niall McKeown 1 of 14

 Are You a Super Mario Leader Capable of
Delivering Digital Transformation?
Are you a Super Mario leader? Can you create a the journey that leads to highly successful digital
high performance strategy in the digital age? businesses goes beyond tech and teams.
Have you got what it takes to avoid the tumbling
barrels of distracting digital tactics, over-hyped Transform in Stages and at a Pace That’s
technology or the belief that your market is Comfortable for You
immune to disruption? Have you allocated the The web presents businesses with an unlimited
right resources to deliver a focused plan of set of opportunities. It also presents customers
transformation? If you have, you’ll reach the with an almost unlimited set of alternatives to
platform of transformation. If not, watch out for choose from. However, the major rewards go to
those barrels! the few that dominate a marketplace.

Leadership (Not Technology) Delivers The most successful Digital Businesses redefine
Successful Digital Transformation the marketplace and displace entrenched
Most failed Digital Transformation projects start competitors. Better still, they create new
with technology or digital tactics. It’s so easy to marketplaces. It’s the role of senior managers to
do. We look for systems to integrate, data find the best play that will create or redefine a
centres to use, website personas and wonderful marketplace, generating context for and
designs. We seek out customers to engage with resonance with the customer. Regardless of the
on social media and make lots of “content size of the business, these actions require
strategies”. Our plans are often built on alignment of people, process, training,
assumptions and an extension of our current innovation and, of course, technology.
business model. While these activities are
important, they rarely create digital success. Mario gets the prize of Digital Transformation by
More often, they are digital distractions. skilfully traversing each layer. His starting point
is to move away from fire fighting, tackling the
When we look at competitors we see their strategic layer first. No matter what he does,
technology, websites, proposition and teams. We those distracting barrels keep coming, trying to
believe that it is the sum of these assets that has knock him off balance. Like all games, there are
given them competitive advantage. If you’ll techniques that make play easier. This book is
permit the Donkey Kong analogy once more, the Digital Transformation cheat sheet.
when viewing competitors we can only see the
top two layers as we look in. In other words, we
see their innovation and technology. Therefore
it’s natural to assume that if we too had
wonderful technology we could create
marketplace disruption (or at the very least make
a dent in an emerging market). The reality is that

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 Index

Page

Digital Businesses Outperform Businesses that Do Digital. So What’s the Difference? 4

The Change Blocks That Affect Digital Transformation 5

Step 1: The 7 Principles of Digital Business Strategy 6

Step 2 & 3: Culture, People & Alignment 7

Step 4: Education 8

Step 5: Agile Innovation 9

Step 6: Tactical Excellence 11

Shameless Self-Promotion 13

Attribution-Non Commercial NoDerivatives 4.0 International Creative Commons

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 Digital Businesses Outperform
Businesses that Do Digital.
So What’s the Difference?
Vision, Strategy, Culture and Approach are the answer. Any business can be a Digital Business,
whether the transition is gradual or a leap. When referring to Digital Businesses the word ‘digital’ is an
indication of speed and adaptability, not technology. Becoming a Digital Business requires informed
leaders who can create a strategy using evidence, lead teams to work in different ways, educate
themselves and their peers on how to approach challenges using data driven decision making and
create constant cycles of agile, focused innovation.

Right now you’re thinking “we do some Digital Business activities on occasion”. True high performance
Digital Businesses continuously accept and practise all of the functions listed above, without
compromise.

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 The Change Blocks That Affect
Digital Transformation

To successfully execute Digital Transformation in any business or organisation, the 5 Change Blocks of
Digital Transformation must each be understood, addressed and embraced throughout the process
and thereafter. To avoid or skip a change block would be to the detriment of a Digital Transformation
project. Let’s take a closer look at the effects of each change block:

1. Strategy & Culture

Strategy is the starting point to creating a high 4. Technology
performance Digital Business. Without strategy Digital Businesses assume technology will
the culture of the business becomes a reactive permeate every aspect of operations. While
one, rather than a proactive one, which leads to transformation should not start with a focus on
digitising services rather than total Digital technology, it should be assumed it will play a
Transformation. part. It also needs to be understood that
competitive advantage is not created by
2. Staff & Customer Engagement technology but by leaders and the strategies
Change is often met with resistance which can they devise. Technology is the enabler, rarely
come from those internal or external to the the differentiator.
business. Through better engagement,
providing clarity around the reasons for change, 5. Data & Analytics
how it will happen and each individual’s role in A vital component in becoming a high
the process, a business can counteract this performance Digital Business is being able to use
resistance. the vast amounts of data and analytics available
to make decisions, experiment and advance in
3. Process & Innovation the digital age. Without this ability, businesses
Defining and refining processes gives businesses are met with stagnation.
the opportunity to become more efficient, and
use this time to innovate. Without continually To begin the journey of Digital Transformation,
evolving processes and innovation, a business is businesses and organisations must begin with
left with incoherent action and cannot move their strategy. Ionology have developed the 7
forward. Principles of Digital Business Strategy
framework to guide users through strategy
development and review in a structured fashion.

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 Step 1: The 7 Principles of
Digital Business Strategy
Do you want a high performance, evidence-based Digital Business Strategy? Of course you do. The
7PDBS has been through academic peer review and has been implemented by over 200 businesses.

1: Know Yourself: - A clear diagnosis of the situation,

an easily understood strategic ambition and well
articulated value proposition.

2: Customer: - An empirical value for customer

volume, the tasks they wish to complete and their
motivations.

3: Marketplace: - Who is the competition and what is

their momentum?

4: Resources: - The Time, Talent & Cash that can be

dedicated to fulfilling the strategic ambition. Micro Analysis

5: Current Position: - Use your web analytics to

6. Members 8. Industry leader
find your starting position.
Hot (Passionate)

Authority Prime
6: Engine of Growth: - Once you know where you
mforted)

5. Omnipresence 7. Smooth are, you can make ‘a play’ and move your market
f
Warm (Comf

position.
Earned media All media

Exclusive
Nichhe or
limited audience Mainssstream
t Mass market 7: Tactics: - Create Mile Markers. Break them into
Projects. Break the Projects into Tasks.
Owned media Bought media

Advocacy - Slow but steady growth.

nfformed)

1. High 5 3. Over here

Authority - The preserve of a few focused and
Mild (Inf

dedicated innovators in any market sector.

Advocacy Attention
Cold (Rational)

Attention - The default choice for those who need

2. Handshake 4. Shout loudly quick wins and have yet to truly innovate or disrupt.
Prime - The largest, most well known dominant
Macro Analysis Using the Ionology
Digital Strategy Quadrant player in your market (should one exist).

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 Steps 2 & 3: Culture, People & Alignment
Nothing kills a good transformation project like Finding the Right Internal Advocates
disenfranchised staff. They resist change and
kill the chances of effective Senior managers aren't always the right
implementation. Similar to Maslow's advocates for transformation. They are
Hierarchy of Needs, a transformation often more susceptible to resisting
project must meet the individual change because business
team members' hierarchy of realignment affects their
needs. departments, their teams and
their own sense of
The compelling story, importance.
focal points and vision of Many team members trust
where change will take us must come from the peers they believe to have the same to lose and
Digital Business Strategy. Ensure that each gain when it comes to understanding how to
individual’s understanding of the strategy and handle change.
the role they will play in creating the new vision.
Explain how their input will be measured and
validated. Give them the tools, training and
support they’ll need to achieve their personal
purpose and explain how they stand to progress
in their careers by transforming with the new
opportunity.

If your Digital Business

Strategy has been created
correctly there should be a
list of the major Mile
Markers, projects and
tasks involved in creating Seek those with emotional commitment and an
the new vision. Allocate intellectual connection to the project. The
every individual one task pragmatic supporter as opposed to the over-
Focus on tactics each week that is enthusiastic doer. Nurture these ambassadors
which solve
strategic, but not part of and they will influence the bystanders, helping to
diagnosed
business their normal job. Small, adjust the overall temperament of an
challenges organisation in realignment.
frequent but important
tasks allow the
organisation to change at a continuous, Finding the connected, influential Ambassador
comfortable pace. can come from modelling internal social and
email traffic.

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 Step 4: Education
Important/Not Urgent

The smartest, most focused teams tend to own industry and appreciate how business
outperform the hardest working teams. Those models are evolving and changing because of
who spend time preparing themselves and their digital disruption.
teams for change tend to have much more
success in transforming the business than those For examples and case studies of changing
who lead from the front. business models and how digital is transforming
industries, read ABCDisrupted.
Steve Jobs famously said “People think focus
means saying yes to the thing you've got to focus Individual team members should have a clear
on. But that's not what it means at all. It means training agenda. The training requirements
saying no to the hundred other good ideas that should focus on filling in gaps to allow people to
there are. You have to pick carefully. I'm actually best complete the challenges laid out in the
as proud of the things we haven't done as the Digital Business Strategy.
things I have done. Innovation is saying no to
1,000 things.” Online learning platforms should be created to
resolve the educational skills gap.
The 7th Habit mentioned in the #1 best selling
book, The 7 Habits of Highly Effective People by Content can be:
Stephen Covey, states that we should sharpen 1. Created: - Expensive, slow but very tailored.
the saw. The book explains how important 2. Curated: - Picking the best content from the
learning, reading, writing and teaching are to a abundance of quality programmes that
already exist online.
3. Procured: - Buy in training for specific needs.
For example, digital tactics training courses
can be purchased online as needed.

Senior Managers don’t want to be tested. They

shy away from being scored.

Operatives see being scored as an addition to

their CV and therefore prefer a different kind of
educational regime.

successful person and team.

The book also describes how successful people
put first things first. They spend time on the
Important, Not Urgent tasks.
As well as personal betterment, a leader needs
to understand the latest thinking beyond their
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 Step 5: Agile Innovation
Shooting the Show Pony

Why is Innovation so Damn Important? peer review publications must reference and
People want new. They want different. They quote you. For that to happen, you must
only talk about stuff they find inspiring. have something new to add to the
conversation that will lead to commercial
success. You must innovate!

Innovations = New Ideas Commercialised

If new, ‘innovative’ ideas could be stacked on top
of each other, they would fill any company
warehouse within a week. The challenge isn’t
getting new ideas. It’s getting ideas that
overcome diagnosed business challenges
extending from the Digital Business Strategy.

Innovation is now a necessary component of any

business that wants to become an Authority
within its industry. To become an authority, a
business must gain earned media from other
industry authorities or influencers. That means
your ideas must be published and recognised as
thought leading. Your ideas must be shared
Advocacy driven businesses have 3 choices:
online. Your ideas must spread. Simply being
good at what you do does not make you a
1. Stay in Advocacy and accept the growth
thought leader.
potential as slow and in-line with changes in
customer behaviour. Advocacy works at the
Not All Ideas Are Born Equal
speed of doing tenders, partnerships or the
Ideas can be scored.
sales force bringing in new customers.

2. Seek out new customers by using paid

methods like Adwords (Attention). This only
works if the cost of acquiring a customer is
less than the margin being made. In many (3 Year $ value) is the potential financial return
mature markets, this is no longer the case. over 3 years. (Strategic alignment) is scored
between 1 and 5, where 1 has low relevance to
3. Move to become an Authority or Prime. The your strategy and 5 is exactly what the strategy
Authority business gains many more needs. (MVP Time To Test) is the amount of time
customers than Advocacy or Attention driven it would take test the idea with a Minimal Viable
businesses. We seek out the Authority. To Product. If maths isn’t your thing, invest in
become an Authority, other authorities or Propulsion Ideas Management Software.
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Giving innovation teams free reign to come up reassembling a team and inspiring them to do
with wild and ambitious plans (or moonshots, as great things when they know their next show
they're called at Google) is the preserve of the pony could face the same fate at any time.
filthy rich and inexperienced. Approaching
innovations should be focused on solving Most leaders make excuses to finish out the
challenges diagnosed in the Digital Business current project. Good leaders kill the pony.
Strategy. Selecting the right innovation to Brilliant leaders inspire the team to apply the
pursue should be mathematical calculated and same passion toward the next innovation.
easy to evaluate.

Using an evaluation model has great advantages:

1. Contributors know why their ideas were
rejected.
2. Contributors focus on what’s important to
the business if their idea is to become
worthy.
3. Shooting show ponies becomes less of a Every Business Can Innovate
team killer. Good service isn’t an innovation, it’s an
expectation. Being known for something positive
Successful Leaders Shoot Show Ponies that has a differentiating, tangible marketplace
Once the latest innovation has been picked and proposition is essential in a digital world. Maybe
the team brought together to make it a reality, it your restaurant makes the world's best soufflé
soon becomes the lighthouse of change. The or you have the best predictive modelling
new idea is paraded around the organisation software on buying habits. Whatever it is, focus
with accompanying whispers of “this is our all marketing on highlighting your innovation. If
future”. The new project has become an internal a customer is on your website they probably
show pony. It is loved, it is exciting and it know what you do. They want to know what you
contains the hopes and dreams of a prosperous do differently.
future.
Three Types of Innovation
Then along comes a better opportunity. One the 1. Closed: - Do it in-house (Old school)
business could exploit faster, which has better 2. Collaborative: - With selected partners
alignment with the Digital Business Strategy, less (Fashionable)
risk and better opportunity for yielding more 3. Open: - With customers and anyone that
revenue than the current innovation. It could wants to join in (All-the-rage)
open a new market and propel the business
toward being the thought leader. But there are
no resources to take advantage of the new idea.
That is, unless someone shoots the much loved
show pony…

The death of the pony results in mourning, but

everyone gets over it. The real challenge is

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 Step 6: Tactical Excellence
Delivering The Strategy

How to Create a Tactical Plan of Action systems and buying ‘platforms’ to perform jobs
better.
As described in The Change Blocks:
• Take the innovations at hand
• The capabilities available
• Align the business resources
• Answer individual needs, create clarity and
inspire
• Review the diagnosed challenges defined in the
strategy.
• Select the appropriate course of action to solve
the near term challenges.
Digital Businesses, however, look for the near
term challenges that need to be solved. While
We all want to 'get stuff done’. It’s rare that a
the solution to the challenge may be digital, it
company focuses on the strategy as they favour
doesn’t have to be. For example, wholesalers or
tactical ‘outputs’ over strategic ‘inputs’. The
manufacturers wanting to sell directly to
quality of those tactical outputs depends very
consumers online and bypass their retail channel
much on the quality of the leadership and their
won’t solve the big issue of channel conflict using
ability to articulate their strategy.
technology. That requires diplomacy. On the
other hand, logistics companies wishing to solve
With a Clearly Defined Strategy, Trained
their information flow with customers do need
Marketing and Technical Professionals
technology to overcome their challenge.
Usually Deliver Superb Tactical Work

Tactical Excellence is achieved when the

UCLA Management Professor Richard Rumelt
diagnosis is accurate and the guiding policy is
suggests in his highly acclaimed book, Good
clearly articulated, creating coherent action.
Strategy/Bad Strategy, that a good strategy
should contain a strategy kernel.
Using the Ionology Digital Strategy Quadrant, a
‘play’ is typically selected where a company is
The Diagnosis defines the nature of the
challenged with creating brand warmth or
challenge, the Guiding Policy is the overall
increasing reach (or both).
approach that can be taken to overcome defined
obstacles, and Coherent Action is a set of
coordinated actions and resources which
overcome the diagnosed challenge.

Most businesses in their haste to achieve tactical

outcomes start with Incoherent Action. Tweeting
and Facebooking, website designing, integrating

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A typical play can have lots of major Mile
Markers. Creating clearly defined mile markers
is the responsibility of senior managers. The
Mile Markers are broken into projects which are
handled by Project Managers. The projects are
then broken into tasks. The tasks become the
coherent action. An individual or team is
allocated a task with guidance on why they are
embarking on that task and what success looks
like.

In small businesses, it’s not uncommon for the

senior manager to be the project manager, and
even the person taking on tasks.

In any project there are always assumptions. We assume that customers want to hear what we have to
say. We assume that customers want to buy what we are selling. We assume that bloggers want to
publish our content. We assume that we can depose a competitor and win a position in natural search.
We assume that once we have enough attention, our payment models will simply work. We assume a
lot of things when creating a strategy. We have to make assumptions in the early stages of strategy
development. It is imperative that the project manager seeks to resolve the assumptions as a priority of
any tactical plan.

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 What we do at Ionology?
We Help you Build a Digitally Innovative and Transformed Organisation

Successful organisations have helped their people develop the digital mindset, the skills to create

data-enabled strategies and the ability to leverage emerging technology through cycles of

innovation.

We can help you do the same. We deliver expert led executive education programs to enterprises

and governments. Our courses bridge the gap between business strategy and technology helping

you gain new competitive advantage that aligns with your business transformation strategy.

How we do it
Transformation Starts with Education

• We teach the most practical methods for delivering digital transformation, AI, digital innovation
and data-driven decision making online and in your premises, worldwide.
• We help rapidly develop the ‘digital mindset’ across your organisation, exposing your teams to
the latest techniques and tools for creating data-driven roadmaps.
• We build confidence, enabling you and your decision-makers to deliver real, tangible
transformation, using evidence-based insights to create new products, services and business
models.
• We help you select, create and leverage the right AI or emerging technology that delivers a
digitally transformed organisation.

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 About Ionology
Since 1999 we have been involved in developing transformational programmes for some of the most
successful enterprises, governments and niche businesses. Digital transformation strategy is a team
effort, it decides whether a business flourishes or wilts.

Digital transformation means different things to different people. Some view it as simply ‘remaining
relevant’ in a changing environment. Others perceive it as a radical change of business model in order
to win new customers. Regardless of the interpretation of digital transformation, the one constant we
know to be true is that competitive advantage is won or lost in the boardroom. It is the leader's role to
ensure their industry knowledge is used to maintain competitive advantage and is not overshadowed
by the pursuit of technology. The company’s market position and ambition must be clearly articulated
before technology is considered. Technology is the enabler, not the differentiator.

Our framework, models, software and courses offering ensures that your business can evolve over a
manageable timeframe to best exploit the new opportunities in the digital economy.

Prof Niall McKeown, Founder & CEO of Ionology

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