Digital transformation programs do not have an enviable track record of success. The technical potential of digital technologies is seemingly limitless but it must be grounded in a clear understanding of how the firm creates fundamental values. Systems thinking and modeling provides a powerful approach to developing dynamic business models for operationalizing and communicating the utilization of innovative digital technology. (Further information: https://www.researchgate.net/publication/322096243_And_Then_a_Miracle_Occurs_-_Engaging_the_challenge_of_operationalizing_theories_of_success_in_digital_transformation)

1. Mapping ‘Theories of Success’ for Digitalization
Applied Research at FHNW
Michael von Kutzschenbach, PhD
01.09.2018

2. Prof. Michael von Kutzschenbach, Ph.D. 1st September 2018 2
Going “digital” is an adventure …
Digital business transformation is one of the significant managerial
challenges in organizational development.

3. Prof. Michael von Kutzschenbach, Ph.D. 1st September 2018 3
We all have our Theory of Success
Source: Drucker, P. (1994, p.96). “The Theory of the Business.”
Harvard Business Review, September-October, pp. 95-104

4. Prof. Michael von Kutzschenbach, Ph.D. 1st September 2018 4
The Challenge of Business Model Innovation
“I think you should be more explicit here in step two.”
(Picture Source: modified from https://pmpaspeakingofprecision.com/2015/03/17/unknow
n-controls-to-protect-you-epa-and-ozone-overreach/)
Then A Miracle Occurs …
If this is true, how good are we at developing, sharing and adapting
useful theories of success?

5. Prof. Michael von Kutzschenbach, Ph.D. 1st September 2018 5
Report from Reality
Source: Kane, G.C., D. Palmer, A.N. Phillips, D. Kiron, and N. Buckley (2015). “Strategy, not Technology, Drives Digital
Transformation: Becoming a Digitally Mature Enterprise.”
http://sloanreview.mit.edu/projects/strategy-drives-digital-transformation/
Feedback
Systems
Thinking and
Modeling
addresses
these issues
{

6. Prof. Michael von Kutzschenbach, Ph.D. 1st September 2018 6
Is there an Approach to Make the Theory
of Success More Explicit?
We think, yes it is.
The tool to becoming more
explicit is applying feedback
systems thinking and modeling
to the problem.

7. Prof. Michael von Kutzschenbach, Ph.D. 1st September 2018 7
What Feedback Systems Thinking means…
Target Condition
intentional action
unanticipated action
NonTarget Condition 1
coincident action
NonTarget Condition 2
secondary inspired action
NonTarget Condition 3
tertiary inspired condition
Intentional action
is taken here.
All actions leave traces ...
Some are
intentional,
most are
unintentional ...
All traces inspire
further actions ...

8. Prof. Michael von Kutzschenbach, Ph.D. 1st September 2018 8
Mastering Complexity and (Un)Intended
Consequences
When experiements in the real world are impossible, systems
thinking and modeling become the main way we can learn effectively
about the dynamics of complex systems.
(Picture Source: personal exchange with Federico Cosenz)

9. Prof. Michael von Kutzschenbach, Ph.D. 1st September 2018 9
Readings:
Contact:
 University of Applied Sciences and Arts Northwestern Switzerland (FHNW)
michael.vonkutzschenbach@fhnw.ch,
T: +49 172 15 23 713; Twitter: @MvKutzschenbach
Systems Thinking and Modeling Resources
Meadows, H.D. (2008). Thinking in Systems: A Primer. Vermont: Chelsea Green
Publishing.
Morecorft, J D.W. (2015). Strategic Modelling and Business Dynamics: A feedback systems
approach. 2nd edition, West Sussex: John Wiley & Sons Ltd.
Sterman, J.D. (2000). Business Dynamics: Systems Thinking and Modeling for a Complex
World. McGraw Hill.
von Kutzschenbach, M. (2018). “And Then a Miracle Occurs … - Engaging the challenge of
operationalizing theories of success in digital transformation”, Journal of Systemics,
Cybernetics and Informatics (JSCI), 15 (6), pp. 101-105.