Formula for (Digital) Change

• D = Dissatisfaction with how things are currently;
• V = Vision of what is possible and tangible;
• F = First concrete steps that can be taken towards the vision;
• CL = Creative Leadership to navigate toward the vision.

If the product of these four factors is greater than:

• R = Resistance,

• dD = Digital disruption from how things can/should be done better, faster, and cheaper;
• dV = Digital Vision of what is desirable, viable, and feasible;
• dF = First concrete digital steps that can be taken towards the vision;
• dL = Digital Leadership to navigate toward the digital vision.

If the product of these four factors is greater than:

• R = Resistance,

then change is foreseeable.

dD, dV, dF, and dL are multipliers; because of that, if a particular factor is missing or low, then the product will be low, and the resistance to change will be stronger. The idea is that if you are seeking some significant, system-wide change, several core elements need attention.

We need a critical mass of the organization to:

1. Being disrupted (dD) by how things can be done digitally (concerning the current state). This often doesn’t come until some force from outside the organization creates a crisis for the organization.
2. To have a digital vision (dV), an image or an idea of what improvement would look like grounded in the hopes and dreams of employees or members. An old saying among leaders is – “Being right is only one-quarter of the battle.” It’s not uncommon for leaders to have a vision of what improvements are needed. The problem is that just communicating the digital vision (or digital mission or digital strategic plan) will not bring change.
3. With a clear sense of what needs to be done as the first digital steps (dF). This means having a picture of what we can do differently in the short term that will move us toward that vision. Four major factors for leaders to take into account are:
   1. What digital competencies and capabilities need to be developed or strengthened for people to function in the changed situation? People don’t like to feel incompetent, and change often creates that feeling.
   2. People are often hesitant to accept and implement the change because they fear losing friends and colleagues in opposition.
   3. Having the needed resources to make the change.
   4. Beginning to create an alignment of structures, processes, and practices in harmony with the new way.
4. Digital Leadership could be a digital agency, consultant, mentor/coach, or other measures. It is most often an outside set of eyes.
5. Extensive corporate research, discussed in the book Leading Digital by George Westerman c.s., revealed that Digital Masters excel through digital leadership: they have a strong overarching vision, excellent governance across silos, initiate many digital initiatives generating tangible business value, and create a strong digital culture.

Resistance (R) is likely to be present in all change efforts. The combined weight of the disruption, digital vision, first steps, and digital leadership needs to overcome that resistance. That means if any of those elements (dD, dV, dF, dL) is “0”, the change will not be possible.

Impact analysis

Obviously, to understand the deeper impact of change, we may need to analyze how primary and secondary activities of the value chain may be affected by digital change, and even extend our analysis beyond the boundaries of the organization and include the larger value network.

According to Michael Porter’s theory on building ‘Competitive Advantage,’ the primary activities are inbound logistics (upstream), operations, outbound logistics (downstream), marketing and sales, and customer service. The secondary activities support the primary activities and include procurement, finance, human resource management, infrastructure, technological development, data management, legal management, security management, and housing.