June2023McKinseyExplainersWhatisdigitaltransformation?Digitaltransformationistherewiringofanorganization,withthegoalofcreatingvaluebycontinuouslydeployingtechatscale.Digitaltransformationisthefundamentalrewiringofhowanorganizationoperates.Thegoalofadigitaltransformation,asoutlinedinthenewMcKinseybookRewired:AMcKinseyGuidetoOutcompetingintheAgeofDigitalandAI(Wiley,June20,2023),shouldbetobuildacompetitiveadvantagebycontinuouslydeployingtechatscaletoimprovecustomerexperienceandlowercosts.Likemanycommonlyusedphrases,“digitaltransformation”hasdevolvedintoacatchalltermthatmeansdifferentthingstodifferentpeople.That’saproblem.Digitaltransformationiscriticalfororganizationstonotonlycompetebutsurvive.Ifleaderscan’tbeclearaboutwhatadigitaltransformationis—andaligntheirorganizationaroundaspecificprogram—theycan’texpecttobesuccessful.Digitaltransformationsaredifferentfromregularbusinesstransformations,inbothsmallandbigways.Foronething,businesstransformationsusuallyendonceanewbehaviorhasbeenachieved.Digitaltransformations,ontheotherhand,arelong-termeffortstorewirehowanorganizationcontinuouslyimprovesandchanges(andthatmeansreallylongterm;mostexecutiveswillbeonthisjourneyfortherestoftheircareers).That’sbecausetechnologyisnotonlybecomingfurtherintegratedinbusinessbutalsoconstantlyevolving.Forexample,giventhegrowingimp...
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