Waterwheels transformed agriculture and electricity transformed manufacturing. Today, digital technologies are transforming everything.

The scope of this transformation is truly astonishing. It's not surprising that many companies find the challenges of digital business transformation overwhelming. That's why this book is so important. It's a practical guide for navigating the rough waters ahead of us.

This book is also a potent reminder that genuine transformation is always about people and about providing tangible opportunities for real growth. Transformation is a process, and it moves along a fairly predictable path. This book will help you stick to the path and not get distracted.

From my perspective, transformation enables and empowers companies to utilize both customer data and performance data to create new revenue lines that are both vertically and horizontally integrated. Transformation sets the stage for creating new business models and new forms of commerce.

Digital transformation is necessary for success and survival in today's economy, since every company can be considered a technology company and a potential competitor. The explosion of digital technology has opened the floodgates for new entrants in every sector of the global economy, putting every established incumbent and legacy organization at risk.

The prime example of this phenomenon is Amazon, whose brilliant use of data analytics completely disrupted the retail industry. There's a harsh lesson to be learned from Amazon's rise: if existing companies neglect to embrace digital technology, new entrants will certainly attempt to disrupt their business models.

The rapid success of Amazon and other digital disruptors has left many executives in a state of shock. Many organizations seem overwhelmed by the sheer scale of change they face. From the perspective of a traditional company, the challenges can appear insurmountable.

When people feel helpless, they often make rash decisions that prove untenable over time. In their rush to “do something,” they make mistakes. Aiming for short-term victories, they sacrifice strategic goals. Reading this book will help you overcome whatever natural sense of panic you might be feeling. This book will help you slow down and thoughtfully consider the logical steps of business transformation.

From my perspective, the best approach is setting reasonable milestones and focusing on incremental gains. Establish measurable and specific key performance indicators (KPIs), benchmarks or milestones that will guide you gradually toward success.

Don't just say, “We want transformation.” Instead, decide what transformation looks like to you and how you will get there. Develop a plan ahead of time and stick to it—but don't be afraid to update it as you move along your transformation journey. Cultivate trusted partners to help you execute. Revisit your transformation strategy regularly to keep growing far into the future.

The power of technology is both exciting and compelling. Helping other people recognize what an effective strategy can create for them and seeing them getting excited about it—that's a great feeling.

We all love to read and hear about success stories, where everything works. This book will help you and your stakeholders write your own success stories.

Some people ask me, “What's next? What comes after transformation?” Frankly, I believe the next big challenge will be answering the same questions that successful, forward-thinking companies have always been asking:

• How can we provide further opportunities for our employees, our experts, our leaders, and our creative thinkers to grow and develop?
• How can we strengthen the relationship between the corporation and the people it serves, its employees, and the larger community?

These basic questions haven't changed—the best companies are always looking toward the future. What will change, however, are the ways we work toward achieving our goals, using the knowledge and resources available to us through digital business transformation.

This book is an important step toward achieving a better future, and I am confident that you will enjoy reading it.

We've all heard and read that digital transformation is changing our lives. But how precisely are we being transformed? Which aspects of our lives are changing and why does digital transformation matter? Why should you read this book? More specifically, why should you read this book right now?

Digital transformation and digital disruption are urgent concerns for all of us, all over the world. Together they have become an inexorable force of nature. Even if your organization is operating smoothly and hitting its numbers today, I can guarantee you will experience transformation and disruption in the near future.

Elon Musk talks about sending people to Mars. On every imaginable level, the act of colonizing another planet would profoundly transform human culture. Yet we are already deep into the process of transforming humanity.

For the past 100 years, we have been shifting steadily from a culture based primarily on physical labor to a culture based primarily on intellectual labor. In recent decades, the shift has been accelerated by the availability of high-speed computing and broadband communications networks, and by the emergence of data science techniques that have led to the development of practical artificial intelligence.

Soon, the knowledge workers who replaced physical laborers will be at risk of being replaced by AI bots. With alarming speed, we are transitioning from a carbon-based to a silicon-based civilization. This transformation is not a trivial matter.

Definition of Work Is Changing

Within an extremely brief span of time, everything we think of as “work” will be performed by physical or digital robots (scripts) guided by artificial intelligence. Any kind of repetitive task that can be automated will be automated. For human beings, work will become a blend of complex abstract reasoning and pure creativity. In other words, people will only do work that machines are incapable of performing.

What kind of work will we do? Anything that requires creativity, imagination, tenderness, affection, empathy, or love. We will be creators, innovators, inventors, entrepreneurs, artists, poets, teachers, athletes, gamers, healers, caregivers and lifelong learners.

This is not science fiction or fanciful thinking. We're no longer on the cusp of a new era. We are experiencing the opening act of a fundamental shift. Some parts of the world will arrive at this future state sooner than others. But this is our shared destiny, and we need to prepare for it.

That's the big picture, in broad strokes. The rest of this book is about the details of getting from our present state to our digital future. This book is neither a roadmap nor a theoretical treatise. It falls somewhere in between.

I'm perturbed by pundits who make false comparisons between the digital transformation we're facing today and transformations of the past. The digital disruption I'm writing about will shake the foundations of society. It will truly rock our world and change our lives. Most of those changes will be for the better. But many of the changes will leave us feeling lost and confused.

Digital transformation will create millions of new jobs. From a global perspective, I am optimistic and enthusiastic about our future. Yet I am also a realist, and I know that transformation will eliminate jobs and disrupt the careers of people in many sectors of the global economy.

“A digital tsunami is coming,” says Chetan Dube, a thought leader in artificial intelligence and the chief executive officer of IPsoft. “Overall, it's a benign tsunami. But it's like a 100-foot wall of water coming toward us. It will sweep away many of the ordinary chores and tasks we do at work. It will remove drudgery from our lives, freeing us to become our best and most creative selves. But we cannot simply sit on the beach and wait for the tsunami to hit us. We must prepare. We must move to higher ground.”

Do Not Ignore the Emotional Component

Moving to higher ground requires leaving behind anything that isn't required for immediate survival. As leaders of transformation, it's our responsibility to help people overcome the emotional obstacles they will invariably face as they shed their old work habits and adopt new methods for achieving their goals in the modern workplace.

The process of moving from the familiar past into an unknown future is difficult, to say the least. Ignoring the emotional component would be a sign of poor leadership, and a clear invitation to failure.

I had a wonderful conversation with my friend and colleague, Ben Richards. Ben is the worldwide chief strategy officer at Ogilvy, and he has vast experience helping major brands that are grappling with business transformation strategies.

Here's a brief summary of what Ben told me:

There are two ways of doing transformation; one that sets you up for catastrophe and another that usually works out quite well. The first way is to sit everyone down and offer them an extraordinarily rational explanation of your transformation strategy. That approach almost always paves the road to ruin.

The second approach is explaining to people how the strategy will impact them as individuals. Tell them how it will affect their income and their career. Explain how the strategy will help them become more successful, more fulfilled, and more satisfied.

Given the choice, Ben says, he would “pick the emotional argument over the rational argument any day of the week.”

He also recommends reaching out to all the stakeholders in the organization, especially those in the trenches and on the front lines. Make sure that you understand and address their fears and concerns. “You need to win the hearts and minds of your constituents,” Ben says.

The last thing you need during a transformation, he says, is a dissatisfied workforce. “If you think that analysts won't call your employees and ask them off the record how the transformation is going, you are mistaken,” he says.

Ben advocates in favor of an approach he calls “Platform, Program, Pulse.” In this approach, a transformational strategy is divided into time horizons:

• Platform = Long Term
• Program = Medium Term
• Pulse = Short Term

It's not too different from the idea of going for quick victories while you keep your eye on the long-range goal. I also like how the Platform/Program/Pulse model gives you breathing room. Instead of attempting to do everything all at once, you establish a logical timeline for accomplishing the various parts of your transformation strategy.

I genuinely admire Ben's approach, and I urge you to keep it in mind as you move through the stages of your own transformational efforts.

Ecosystems of Disruption

It's also imperative to remember that transformation and disruption do not occur in a vacuum. At the risk of stating the obvious, everything is connected. Instead of thinking about transformation and disruption as free-standing events, I urge you to envision them as constituent parts of a much larger and continually evolving ecosystem of organizations and their stakeholders.

I found the experience of Goran Kukic, head of IT innovation at Nestlé, to be highly instructive. In a wide-ranging conversation, Kukic described how Nestlé built a specific program for dealing with the startup community, which is a prime source of disruptive innovation and transformation.

“Dealing with a startup can be exceptionally challenging,” Kukic says. “You can't send a 40-page contract to a startup. They are simply not traditional companies.”

Even when there are clear business reasons for collaborating, cultural mismatches between startups and traditional companies can lead to disastrous relationships. To improve the odds of success, Nestlé created a Silicon Valley Innovation Outpost to scout opportunities for collaboration and build essential relationships on the ground.

“We realized there was so much more to be learned from startups,” he says. Today, Nestlé has a team of innovation managers in the San Francisco Bay area. They have become familiar faces in the startup community; they are part of the landscape.

From my perspective, Nestlé's approach is absolutely brilliant. Instead of regarding innovation, disruption, and transformation as alien or unnatural, the company sees them as natural and integral to continuing success.

Hope for the Best, Prepare for the Worst

Part of our general uneasiness about digital disruption, however, arises from our sense that it is occurring quite suddenly. In fact, it is the tail of a larger transformation that's been going on since the beginning of the twentieth century. We tend to think of the most recent advances in technology as being the most significant and the most influential, but the reality is more nuanced. Each of the previous advances was essential, and we wouldn't be where we are today without them.

Moreover, the pace of transformation has been logarithmic, not linear. Each of the five advances in computing can be rightfully considered a paradigm shift, and each advance contributed exponentially to the growth of computing power.

I mention this because it's important to dispel any notions that digital transformation is some kind of magical event or sudden break with the past. Digital transformation is both a powerful force and a natural leap forward in a process that's been going on for quite a while.

If digital transformation is merely another step in a natural process, why do so many people find it confusing? The answer is simple and somewhat embarrassing: the business technology community has done a less than stellar job of explaining what digital transformation is and how it will affect the lives of everyday people.

A world-renowned creative leader who works with technology companies on defining their brands puts it eloquently:

We talk about digital transformation and we know it's coming, but nobody really knows what it means, it's a loose term. Most of us don't know exactly how digital transformation will change our lives and our jobs, so we assume the worst.

His comments echo the sentiments of many people we interviewed for this book. I cannot offer answers to the existential questions raised about digital transformation. I will, however, provide specific steps and processes for assuring the best possible outcomes from your business transformation efforts.

We do not live in a deterministic universe. I do not believe the future is carved in stone. Technology is a tool and we get to choose how we want to use it. This book lays out some of the choices. It offers suggestions for moving forward in a thoughtful and responsible manner. I hope you find this book helpful in your transformation journey.

I conclude my introduction with wise words from Lauren Crampsie, president, Ogilvy New York:

Change of any kind, digital or human, is always about managing expectations, setting goals and defining clear responsibilities for executing against those objectives. Given the pace of change today, organizations have to respond with a tenacity which often means questioning every precedent and definitely changing the status quo.

Thank you to all my colleagues, friends, and advisors for sharing of your precious time and brilliance to this project; this body of work would not be the same without your real-life experiences and inputs: Mitra Best, Lauren Crampsie, Chetan Dube, Sonia Fernandes, Anna Frazetto, Steve Goldstein, Nalini Guhesh, Carla Hendra, Nikhil Jinghan, Goran Kukic, Adam Morris, Ben Richards, Rajesh Sinha, Atle Skjekkeland, R. Sridhar, Steve Sterin, Jonathan Stern, Tiger Tyagarajan, Phil Wiser, and Sigal Zarmi.

Special thanks to Arup Das, Vineet Jain, Thornton May, and Meredith Whalen for your extended contribution, counsel, and the immeasurable amounts of time that you offered to this endeavor.

Special thanks to Mike Barlow for your patience in the writing process and helping me keep it real.

And thanks to Sheck Cho, who made this project possible.