1) Digital transformation involves realigning technology, business models, and processes to create value for customers and employees in an ever-changing digital economy. 2) The author studied many leading companies and identified six common stages of digital transformation: business as usual, present and active, formalized, strategic, converged, and innovative and adaptive. 3) By following these stages, all aspects of a business can evolve, including culture, to continuously pursue digital transformation and stay ahead of technology and market trends.

1. SMPM | RMS 2016
The Race Against
Digital Darwinism:
The Six Stages of
Digital
Transformation
Published on April 26, 2016
Brian Solis, Principal Analyst, Altimeter Group (a Prophet co.), Author of X: The Experience When
Business Meets Design
We live in a time of digital Darwinism, an era when technology and its impact on business and society are
constant with varying, but inevitable, degrees of both evolution and revolution. The effect of digital
Darwinism is real and it’s enlivened though changes in people (your customers, employees and partners)
and how markets are advancing as a result. To thrive in these times, many companies are investing in
digital transformation to drive business evolution and modernization. In fact, all the big research firms
and consultancies from Deloitte to Accenture to CapGemini and also my team at Altimeter Group are
dedicating significant resources to study how companies are changing because of digital.
For all of its exposure (or over exposure), digital transformation is relatively young and still developing
with much still to understand. For example, in my previous research, I found that most companies claim
to be undergoing digital transformation (88%) but only 25% were doing so with purpose beyond investing
in new technology as a means to modernize technology infrastructures. What became clear over the years
is that many of the executives who are driving change did so from a technology-first perspective when in
fact, this work represents so much more.
Digital transformation is one of those terms that means different things to different people. After studying
the space and talking to those leading change, I sought to capture a definition based on what I heard time
and time again. The working definition for digital transformation I ended up with was this…

2. SMPM | RMS 2016
Digital transformation as the realignment of, or new investment in technology, business models, and
processes to create new value for customers and employees and more effectively compete in an ever-
changing digital economy.
What started as enterprise initiatives led by progressive CIOs and IT organizations has spread throughout
every facet of business. Now, executives in other critical functions are also leading investments to bring
their own technology roadmaps to life. In some cases, there’s internal competition between groups. For
example, CMOs are often cited as the rival to CIOs in spending when it comes to new technologies and
resources. But over time, all facets of business must work together under a common vision and aspiration
if it is to excel in an era of digital Darwinism. This, I’ve learned, is something that happens only after
departments attempt change independently. Eventually, there’s momentum and support to drive
collaboration across the enterprise.
How is it that companies start working as one entity?
Time and time again, it comes down to how people are changing as customers and employees, how their
relationship with technology impacts behavior and ultimately how companies, in addition to drive
profitability, continually invest in new and emerging tech to remove friction, create new value and scale.
This is just the beginning of the digital transformation story. As part of my latest research study, I learned
that change plays out in a series of common phases that span several key areas of most organizations.

3. SMPM | RMS 2016
Introducing a Maturity Model To Guide Your Digital Transformation
Over the last three years, I’ve studied the maturity paths of some of the world’s leading brands including
Dell, Discover, GM, Harvard, Lego, Metropolitan Museum of Art, Nestlé, Novartis, Sephora, Starbucks,
Target, among many others. The result is a new report, “The Race Against Digital Darwinism: Six Stages of
Digital Transformation.” It introduces a maturity framework that documents how companies are
advancing technology roadmaps, business models and processes to compete in the digital economy.
This model was developed to help CIOs, CMOs, CDOs, and key stakeholders follow the paths of other
successful companies. But more so, it’s meant to give a checklist of sorts to guide, justify, validate, and
effectively make the case for driving transformation.
One of the key insights I learned in the process was that mature companies establish purpose to create
the kind of holistic alignment that inspires and drives enterprise-wide change. I consistently found that
customer experience (CX) often served as a primary catalyst for driving change with CMOs and CIOs
helping them come together to jointly lead common efforts.
Through the lens of customer experience, digital transformation, I learned, organizations evolved through
six progressive stages…

4. SMPM | RMS 2016
1. Business as Usual: Organizations operate with a familiar legacy perspective of customers,
processes, metrics, business models, and technology, believing that it remains the solution to
digital relevance.
2. Present and Active: Pockets of experimentation are driving digital literacy and creativity, albeit
disparately, throughout the organization while aiming to improve and amplify specific
touchpoints and processes.
3. Formalized: Experimentation becomes intentional while executing at more promising and
capable levels. Initiatives become bolder, and, as a result, change agents seek executive support
for new resources and technology.
4. Strategic: Individual groups recognize the strength in collaboration as their research, work, and
shared insights contribute to new strategic roadmaps that plan for digital transformation
ownership, efforts, and investments.
5. Converged: A dedicated digital transformation team forms to guide strategy and operations
based on business and customer- centric goals. The new infrastructure of the organization takes
shape as roles, expertise, models, processes, and systems to support transformation are
solidified.
6. Innovative and Adaptive: Digital transformation becomes a way of business as executives and
strategists recognize that change is constant. A new ecosystem is established to identify and act
upon technology and market trends in pilot and, eventually, at scale.
Technology has empowered consumers to become more mobile, social, and connected than ever. This
has changed how they interact with each other and with products, services, and businesses. Digital
transformation opens the door to new opportunities for innovation in how to design, integrate, and
manage customer (and employee) experiences.
By following a digital transformation model, all aspects of business evolve, including management
perspectives, roles and responsibilities, operations, work, and, ultimately, culture.

5. SMPM | RMS 2016
The Six Stages of Digital Transformation represents a journey to evolve with and push ahead of technology
and market trends. This is true business transformation. It’s in the ongoing pursuit that makes change less
about resolute stages and more about an evolving vision, purpose, and resolve to engage a connected
generation of customers and employees. It is the collective efforts of individuals and groups and the
collaboration of cross-functional roles that pave the way for a new era of business, work, and customer
centricity.