Insights / Does Digital Transformation go hand in hand with saving the world?

Does Digital Transformation go hand in hand with saving the world?

18 January 2021


It's obvious to most people: We're growing ourselves into the grave. 

Join our Webinar "Getting Started with Sustainable Digital Transformations" on February 25, 2021. Sign up, send us an email: info@strategy-alliance.com

Over billions of years, the Earth has changed from a wild place where only bacteria and viruses could live, into an incredibly rich breeding ground for evolution. An interplay of all kinds of processes caused toxic substances (radioactive material, cyanides) and greenhouse gases (methane, CO2) in the Earth's crust to disappear. After that, life on Earth became strong enough to regulate the living conditions on our planet itself. Like temperature and quality of water, soil and air. Billions of years of gradual improvement of the liveability of the Earth. And we, humans, who thanks to these processes have been able to originate and further develop, reverse this process within a few hundred years. Why? Because we have created an economic system with a number of flaws. If we don't fix them soon, we will irrevocably go under.

Fortunately, we are smart enough to understand what the problem is, and we know what we can do about it. But we need a clear guideline, and there it is: The Framework for Strategic Sustainable Development (FSSD). In our previous blog In our earlier report we briefly mentioned the four pillars of the FSDD: Systems thinking, Basic Principles of Sustainability, the ABCD process and the 5-level model. We then zoomed in on systems thinking. Systems thinking is one of the steps needed to fix the flaws in our system. In this article we focus on the next two crucial steps: applying the four Basic Principles for Sustainability and the ABCD process, which works with Backcasting.

Strategy Alliance has put Sustainability at the centre of its value proposition! Why? Because Digital Transformations are taking place on a large scale in all organisations, the opportunity to include sustainability in this change. Just like defining your new business model, thinking about strategy and business architecture is the moment to make the choices that can have a real impact on sustainability. Therefore, sustainability needs to be incorporated into digital transformations and the entire architecture of an organization. The FSSD makes this possible, by making clear what needs to change. And the state of our technology is not the problem. All the solutions are already there.

The Four Fundamental Principles of Sustainability

When you start with a Digital Transformation, you determine what can be done better or differently now, and design your business architecture accordingly. The FSSD is the tool to do that for the Sustainability aspects, it clearly shows what the four woeful errors are that lead to systematic unsustainable behaviour, and what is therefore needed:

  1. Society systematically extracts and distributes raw materials from the earth's crust (e.g. fossil fuels and heavy metals) at a much higher rate than the rate at which these substances are returned to the earth's crust. So substances like CO2 accumulate, with all its consequences. So we need to get back to a level that the Earth can handle, and become largely independent of fossil fuels and mining.
  2. Society systematically produces more (substances foreign to nature) than nature can process in its natural cycles (e.g. dioxins, DDT and PCBs, but also nitrogen). Consequently, these (toxic) substances also accumulate and poison or eutrophy our environment. That is why zero waste systems are so important and why our emissions must become nature-friendly.
  3. Society is systematically depleting the Earth's ecosystems faster than they can regenerate and damaging them beyond repair (for example, through overfishing, large-scale logging, cultivation of fertile land with major infrastructure, or other forms of manipulation of ecosystems). So we undermine the Earth's ability to keep itself habitable. Sustainable use of ecosystems is therefore crucial, both on land and in the oceans.
  4. We subject people to circumstances that systematically undermine their ability to meet their basic needs (e.g. through exploitation, exclusion and oppression). FSDD's basic human needs are: health, influence, competence, meaning and fair treatment. If these needs are not met, people become unhappy and sick. Communities fall apart and people start displaying increasingly unsustainable and unhealthy short-term behaviour. We can prevent this by actively combating inequality, exploitation, exclusion and oppression.

These four woeful errors and basic principles are found in the illustration below as the planets we must keep a close eye on to navigate toward a sustainable system. They are the landmark for Backcasting and the ABCD process.

Backcasting and the ABCD process

Backcasting and the ABCD process are the third pillar of the FSSD. From a vision of the future, based on the four basic principles, we reason back to the current situation. This method provides tools for a long-term vision and facilitates step-by-step innovation within an organisation. The power of Backcasting is that it stimulates out-of-the-box thinking and anticipating future (unknown) situations. The ABCD process works with, you guessed it, four steps:

  1. Awareness. Awareness and forming an image of what the future of the organization looks like when the sustainability principles are applied. This image is created by looking ahead for a long period of time and letting go of all restrictions, such as regulations and technical barriers.
  2. Baseline analysis. Current reality: using the sustainability principles to provide insight into the organization's current situation.
  3. Compelling vision. By reasoning from the future image (A) back to the current situation (B), creative solutions and actions emerge with which the difference can be bridged. These form the basis for a vision of the future organization that is based on what is desirable, taking into account - but not limited by - the current situation.
  4. Decide on priorities and Down to action. Decide on priorities: the solutions are incorporated into a sustainability strategy with action points for the short, medium and long term.

In addition to the four basic principles for designing a sustainable organisation, the FSSD has four other principles of a different order, which are of great importance throughout the process. These are transparency, inclusiveness, accountability and fairness. This refers to involving stakeholders in the dialogue on sustainability and communicating openly and honestly about an organization's ambitions, progress and dilemmas.

Figure 1: Our vision of combining Digital Transformation and the FSSD model.

FSDD and Realize: a framework to support digital transformation and a stepping stone to really integrate sustainability.

We believe that there is no new panacea that will magically improve the transformational capacity of organizations. We analyzed real-world projects, analyzed existing frameworks and looked for commonalities and best practices. The result is a simple framework for Digital Transformation with its roots in both theory and practice: Realize. We have used this approach in various settings. The starting point is to align the (digital) baseline of the organization with the wishes and needs of the business and the customer and the context of an organization. The Realize framework offers an excellent framework for integrating the pillars of FSSD in the transformation process.

The Realize approach is not just another framework, it's more of a philosophy based on best practices that have been proven in practice to support organizations in implementing strategy.

In summary, this means that the ABCD process runs parallel to the Realize steps and can be integrated to support the implementation of a sustainable strategy. They are therefore not two separate processes, Digital and Sustainability, but one improvement cycle which together lead to an improved future.

Figure 2: Realize and ABCD combined. KT, MT, LT: Short and (medium) long term.

How Realize works

Each business transformation initiative has five main activities, with and Governance as a connector:

  1. Strategy development and stakeholder mobilization,
  2. A Business Blueprint and Operating Model,
  3. Adaptive architecture and design,
  4. Migration Strategy,
  5. Implementation and management.

These activities take place partly in parallel and partly simultaneously. Modern business transformation requires fast results, which means that the business transformation process is interactive, short-cycle and workshop-based. Decisions are data-driven, rationalized and taken quickly. With data-driven we mean in this case, decisions are made based on figures and quantitative data. Short-cycle: Initial results must be delivered very quickly and updated regularly. Iterative: Several cycles are used to deliver the final result. Each cycle is a refinement of the one before. And workshop support promotes rapid and interactive delivery of results and increases support.

Webinar: Getting started with sustainable digital transformations

It is clear that our current system, and therefore how almost all organisations work, is not sustainable from a sustainability point of view. What can you do? You can take the 4 basic principles as orientation for the next change in your way of working and make Digital Transformation a Sustainable Transformation too! That is not a separate task, but something to start as soon as possible.

You are cordially invited to participate in the Webinar 'Getting started with sustainable digital transformations' that we are hosting on Thursday, February 25, 2021.

Sign up, send us an email: info@strategy-alliance.com