444: Executive leadership and digital transformation challenges – with David Rogers

How established organizations can overcome barriers to digital transformation – for product managers Today we are exploring digital transformation in large organizations as well as other challenges leaders are facing in a digitally transforming business environment. With us is David Rogers, an expert on digital transformation, a member of the faculty at Columbia Business School, and the author of five books, including The Digital Transformation Roadmap. Summary of some concepts discussed for product managers [1:38] What kind of problems are executives of organizations talking about now? There’s a tension between the external and the internal. Established organizations are seeing a lot of external change—new technologies, new behaviors among customers and employees, and digital change. The pace at which each new wave of change comes is speeding up. On the other side, businesses find it hard to adapt internally to respond to change. Many companies are working on digital transformation, but they’re struggling to see results. Seventy percent of large organizations are failing in their efforts to transform. I’ve been diving into the key problems that are holding organizations back from digital transformation. They understand the urgency to transform, but inertia is holding them back. [5:43] What is digital transformation? Digital transformation is the transformation of an established business to thrive in a digital age of constant change. This is about established businesses. Creating a new startup is a different challenge. In an established business, you have a business model, customers, ecosystem of partners and distribution channels, employees, and a brand reputation. The challenge is adaptation. How do we turn a giant battleship in the water? Digital transformation is not, at its heart, about technology. We need to change because of changes around us, which are driven by new technologies, but to change our organization, we have to focus much less on the technology and much more on the customer and our own business. To respond when things seem to be changing so fast, keep an eye on the technology, but don’t lose sight of your real mandate, which is to solve customer problems, solve business problems, and pursue opportunities for sustainable growth. [7:36] What part does artificial intelligence (AI) play in digital transformation? The current wave of change is around generative AI. A lot of companies are pumping out demos of AI passing the bar exam or creating a marketing plan in 30 seconds. It’s uncanny how an algorithm can put things together that are shockingly similar to what a person might write. Is it actually useful though? Most of the examples I see are not useful. The marketing plan created in 30 seconds is not good enough to implement. It’s a B-minus student’s effort. Other people are using AI to actually solve problems. Khan Academy is using large language models to provide one-on-one tutoring. There is a lot of evidence that learners perform and progress better and faster if they have one-on-one tutoring, but human tutors aren’t scalable. Khan Academy is building an incredible application to provide tutoring that is as good as or even better than what a human tutor can provide. We have to follow and track these fast-moving changes, but we cannot be distracted by them from the strategic question, “What problems are we trying to solve?” [10:51] Tell us about your framework for digital transformation. My framework address five barriers to digital transformation: * Lack of shared vision: A lot of companies have a generic intent to become more digital or futureproof the business, but those phrases are meaningless and generic, as opposed to a vision that is specific to the company. Where do we see our world, context, customers,