bricks of digital transformation

The Bricks of Digital Transformation

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The Bricks of Digital Transformation - by Giorgio Borgonovo2

About Me

My name is Giorgio Borgonovo.

I am a Knowledge Engineer and Business Coach.

I help companies to design, develop, manage and promote tools, processes and strategies to foster collaboration, knowledge sharing, innovation and creativity.

As a knowledge engineer I’m helping companies to foster innovation, develop new tools and procedures to share knowledge, ideas and experience using different channels and media, to make people able to browse new ideas, sharing them, discussing them and choosing the best.

As a business coach I'm helping companies to redefine their strategy to win in a continuously changing world, identifying their priorities and how to use the digital technologies to improve performance and deliver better services and products.

+39 348 80 67 955 [email protected] www.tavernadelleidee.it linkedin.com/in/gborgonovo


Introduction

Shaping ideas

Axis of Digital Transformation

Bits and Atoms

Value: Brand and Capital

Traditional and Digital Modes

Examples of Digital Maps

Hacking Digital Transformation

Digital Transformation on Business Model Canvas

Bricks on Axis

Conclusions

Table of Contents

Introduction


Bits and Atoms

The LEGO Group wants to embrace a digital transformation to be more attractive and exciting. To this purpose it must undertake some initiatives to mix atoms and bits harmonically and create a new kind of experience for its stakeholders, the builders of tomorrow.

This document provides a general overview of the Digital Transformation path connecting the brand with the environment in which it lives and grows.

The LEGO Group can get ideas from it, however a tailored plan and strategy can be defined after a deeper understanding of the LEGO Group culture, strategies and undertaken initiatives.

Leveraging digitalisation

We consider digitalisation as a way to make our core business – the physical LEGO play – even more attractive and exciting. To do this, we will leverage digitalisation over a broad range of topics – e.g. integrating physical and digital play, e-commerce, marketing and our business/enterprise system.

The LEGO Group - A short presentation 2015

Digital Transformation Axis


Hacking Digital Transformation

We often refer to three elements that contribute to create a company's value: people, processes and technology.

People are the individuals who, in some way, benefit from the performance of the company or actively help create it.

Processes are the structured activities through which performance is created, making it consistent, measurable and somehow independent from who performs it.

Technology is the enabling element and it influences and supports how relationships between processes and people work.

How these elements are managed, inside and outside the company, determines the way capital and brand are built. In order to make the company grow and prosper a perfect balance must be found between these elements.

In the next pages I have jotted down some ideas to involve the whole organisation in a digital transformation journey.


1

2

Consider the 3 axes of an organisation: People, Processes and Technology

3x

PEOPLE PROCESSES TECHNOLOGY1x 1x 1x

They differ when inside or outside the organisation.


3 4

We can call the external axis Customers, Relationship and Products/Services and the internal axis Collaborators, Organisation and Tools

6x

The axis are oriented (directrixes) towards the centre, the core of the company.

6x Directrixes


5 Companies keep inside and outside separated with what we can call “control filter”.

The control filter is used by companies (often unawares) to state their competitive advantage, to retain clients and to attract new ones.

control filter


6

Traditional companies keep their control filter as broad as possible.

The more distant the dichotomous positions are, the greater traditional companies perceive their own value. They think their value depends on how much they are able to create and maintain the gap between inside and outside.

How a company organises itself internally is very different from how it establishes relationships outside (possibly one-way, broadcast). Collaborators/Employees have no contacts with externals if not expected by their role. Products&Services are completely (jealously) created inside the company and proposed to external clients. Tools used internally are designed to be only functional inside.

Dichotomous positionsPEOPLE: Customers-CollaboratorsPROCESSES: Relationships-OrganisationTECHNOLOGY: Products&Services-Tools


7

In “digital companies” the poles of the internal/external dichotomous tend to get closer. In ideal digital transformation they coincide, whereas in real digital companies the filter is small but still exists.

Digital companies aim to maximise transparency and proximity with the environment in which they are immersed. They take advantage of both internal and external assets to create new value; reducing the control filter makes them more effective thanks to new connections.


Digital companies create a large community, connecting inside and outside, that is a strong base of relationships sustaining the brand and its activities.

Traditional companies keep external and internal separated because this way they have, or they think they have, a better control, but they are less flexible towards changes.


Value: Brand and Capital

Brand lives and develops in the minds of customers. It is the idea people have of the company and of its products.

Capital resides and develops within the company and its ecosystem. It is the economic evaluation of whatever actively participates in creating and maintaining the company's value.

The value of a company is the result of balanced interaction between its internal and external actions which all contribute in terms of capital and brand.

Capital is the sum of all tangible and intangible assets resulting from coherent interactions between people, processes and technology to create economic value.

Brand is the company capacity to create and maintain long term relationships with customers and to exchange value based on the identity of its products.


Traditional and Digital Modes

Next pages show examples of traditional and digital modes used to draw company directrixes. They don't consider all the elements and aspects, but provide a general guide to understand the difference between the traditional and digital modes.

A description of what the two modes look like is helpful to understand the map and to try to position the company in the directrixes space.

Once positioned it is possible to see if there are areas where the company is better and what can be done to improve and therefore be able to design a road map.


Customers

In a traditional company clients are those who buy products in shops.

In a digital company customers are all those people who interact in some way with them.

Customers also interact with open communities regarding the brand, its products and services.

Often they get access to the production line.

Traditional Digital

Indicators:● Customer Experience● Customer Satisfaction● Brand Testimonials/Referrals● Customer Success Management● Corporate Social Responsibility


Collaborators

Traditional organisation employees only interact with the boss who is responsible for work progress. They have no initiative. They give good results because of their number.

Training on the job only.

Recruitment is based on recommendation and c.v.

The digital organisation is horizontal, collaborators are entrepreneurs, oriented by the mission and vision. Best results because of their capacity to collaborate and share knowledge.

They are part of a community around the brand.

Recruitment is done within this community.

The digital organisation works on collaborators happiness.

Traditional Digital

Indicators:● HR Maturity● Corporate Culture● Talent Acquisition & Retention● Inclusion & Diversity● Career Planning


Channels and Relationships

Traditional organisations have a few touchpoints and the communication is broadcasted mainly through advertising.

Digital organisations have multichannel relationships that adapt to customer preferences (time, channel, place of the relationship).

Customer community channels run parallel to the official channels helping to communicate the brand.

Traditional Digital

Indicators:● Accessibility● Community● Customer Interaction● Omni-channel


Organisation

Traditional organisations have linear and sequential processes, focused on production.

Input resources are all owned by the company.

Digital organisations have processes focused on creating a great experience.

Big Data is largely used to anticipate stakeholders (both internal and external) necessities.

Most of the input resources are from outside the company.

Traditional Digital

Enablers:● Company Certification● Knowledge Transfer● Beyond Budgeting● Frameworks● Smart Working


Products & Services

Products are production oriented and not client oriented.

There are no links between different products (sets).

More physical products than services.

Digital pushes services instead of products.

Products are designed with customers.

Frameworks of products and services connected by open standards.

Often the company does not own the delivered products and services.

Traditional Digital

Indicators:● Customisation● Platform/Framework● Ecosystem interoperability● Social Network● Prediction Market


Tools

Manual tools, designed only for the specific task and company, developed and used only inside it.

Digital organisation shares its tools and the production platform with customers.

Tools are based on open standards, with API and well designed UX.

Virtualisation of systems, cloud, wearable devices. AI, etc.

Traditional Digital

Indicators:● UX, API● (Enterprise) Social Network● Device Policy● Accessibility● Back End e Front End integration


Examples of Digital Maps

In the previous pages the axes of transformation have been defined and now we want to understand how to use this map.

Some examples of companies in their digital transformation route can be seen in the next few pages.

Since a perfect digital strategy does not exist for anyone, the extremes of the axes must be defined by each company based on what they, or their industry, consider the minimum to the optimum.

This map can change over time because of the actions undertaken by the company itself and its market.

If the company pays attention to all the areas at the same time and in the same way its growth is more substantial instead of focusing, often following the market trends, on one or few specific areas.


Digital Marketing Strategy

This is a typical example of an enterprise at the beginning of its digital transition. The first area of action is usually marketing, with all the connected tactics such as social media presence, content marketing, improving of relationships, etc.

However, digital marketing alone is not enough, more should be done, particularly inside, because changing inside structure changes everything.


Facing out Strategy

Here is an example of a company who is managing their external environment, but forgetting to manage the internal aspects as well.

Collaborators are not involved in the company improvements therefore could feel uncomfortable.

Tools are not updated and soon this gap will make it difficult to maintain production capacity at the expected quality and rate.

Something has been done on the Organisation axes therefore, if they listen to feedback, they can adequately adapt the other areas.


Equilibrated Transformation Strategy

Here a full digital transformation is not yet complete, however this company is well balanced and is doing a good job in all areas.

Their strategy should be to continue the transition trying to stay focused on all the aspects.


Digital Transformation Strategy

Here is a company following a good digital transformation process, the control filter is small and all the areas have been adequately managed.

New ideas for improvement will arise thanks to the involvement of people, internally and externally, both through the organisation and relationships.

Shaping Ideas


Bricks on Axes

It is now time to explore how all these concepts can blend together and be useful for the LEGO Group.

What do the internal and external axes represent for the LEGO Group? Who are its customers and collaborators? What are the relationships and the organisation processes? What products and tools is it using?

If we find answers to these questions It's possible to see how they are linked together and how they can mutually interact and strengthen. It is also possible to understand which of the factors should be eliminated or reduced and which factors should be raised or created to adopt a winning strategy.


Digital Vision

What is the LEGO Group's value? What is its competitive advance?

What is the LEGO Group's digital vision in a digital world?


Customers

Why are they customers? What make them happy?

What are they talking about? How can LEGO engage customers? How can LEGO create a neverending experience?

How can LEGO create connections between them?

Is there any customer or customer segment which can become a partner?

AFOLs

Parents

Teachers

Business people

...

Kids (2-5 years old)

Juniors (6-12)

Teenagers (13-18)

...


Products & Services

Duplo

Lego Sets themes

Lego Technic and Lego Mindstorm

Board games

...

Lego videogames

Ideas

Film

Serious play

...

How can the LEGO Group create customised products or services for each customer/stakeholder or segment?

How can the LEGO Group share the production line with customers?


Channels and Relationships

Traditional

Stores and Parks

Call Center

Brochure

Product

Agents

TV and Cinema

Branded Digital

Digital content

Company website

Mobile and Tablet

External Digital

Web

Social Networks

How can customers get in touch between themselves?

Where do customers want to interact?

How can physical and virtual enforce each other?

How is the LEGO Group listening to its customers? How is it replying to them? How is it talking to them?

How is the LEGO Group reacting to feedback and inputs?

Are there new channels the LEGO Group can use to engage them?


Collaborators

Product development

Marketing

HR

Operations

Business enabling

Retailers

...

Can the LEGO Group employees be contacted by customers?

Can customers become (external or internal) collaborators?

How do collaborators interact each other?

Where do they find inspiration?

How do they learn and share knowledge?

How is LEGO culture spread?

What makes collaborators happy?


Does the LEGO Group anticipate customer needs? (i.e. using Big Data)

Can the LEGO Group create personalized journey for both customers and collaborators?

Is the LEGO Group using external assets and resources effectively?

Is the LEGO Group creating a “platfirm”?

Organisation

Creating new Sets

Producing Sets

Selling Sets

Procurement

Training

...

Platfirm is a plug-and-play business and organising model that openly allows digitally-networked beneficiaries to co-create and exchange value.


Tools

CAD & PLM software suite

Stereolithography machine

Lego Digital Designer

Moulding line

Back end and Front end tools

Intranet & ESN

...

Is the LEGO Group sharing its internal tools with external stakeholders to enable their creativity, to allow cocreation?

Is the LEGO Group creating a framework connecting inside and outside?

Is the LEGO Group considering user experience in developing internal tools? Is it creating open API? Is it using open standards?

Is the LEGO Group creating tools easy to scale and further develop?


Conclusions

In this document we have seen how important is to consider all the internal and external components when planning the digital transformation. A scheme to organise those components and a way to describe the present status and the vision have been presented along with some questions to begin a discussion.

This document illustrates the elements of a comprehensive digital strategy that must be created in the LEGO Group overall strategy and vision, in its culture and in other initiatives.

It'll be a real pleasure for me to discuss the LEGO Group digital transformation plans further and to explore how I could contribute with it.

Sincerely,

Giorgio Borgonovo

+39 348 80 67 955

[email protected]

www.tavernadelleidee.it

linkedin.com/in/gborgonovo

LEGO©, the LEGO logo, the Minifigures, MINDSTORMS and LEGOLAND are trademarks of the LEGO Group.All rights reserved.

bricks of digital transformation

Leadership & Management