and delivers value, and innovates into the future. What sets business transformation apart from digital transformation? Digital transformation was focused on fixing and improving the past to optimize and scale capacity during the digital revolution. That is still a key first step in business transformation, but transformation goes further. First, AI tools and capabilities can already improve processes and drive efficiencies to optimize and reduce costs and resources. But this is the new status quo. To go further, take the time and resources that are freed up to creatively explore opportunities and focus on transformation. Second, these are the early days of the AI revolution. Businesses need to be forward-looking and reimagine their organizations to thrive in an AI-driven future. This is not about just making things in your business work better through digitization. It is about doing the things that businesses have never done before or didn’t know to consider and completely rethinking the game in terms of organizational processes, value creation, and performance. Embracing a transformation mindset Business leaders should embrace a different way of thinking to avoid repeating the reformation/evolutionary, not revolutionary, patterns of the digital era in today’s AI era. An iterative mindset dominated during the digital era. It focused on using new technology to do the same things better and faster and less expensively. This iteration mindset focused on questions centered around “what” and “how.” Iteration mindset: • How could I do this faster? • How could I increase frequency or performance? • How could I do this with less effort? • What is the maximum reduction we could achieve? • What is the optimal way to increase efficiency? If leaders apply an iteration mindset to AI and agentic AI, the full potential of the technology and businesses will remain unknown. Instead, a transformation mindset can help push leaders and businesses to imagine what’s next and question business as usual. The transformation mindset focuses on questions centered on “why” and “what if.” Transformation mindset: • Why do we operate this way? • What are today’s biggest problems and why can’t we address them? • What are things that could transform, not fix, my business and why am I not pursuing them? • What data do we have and what data do we need? • Do I understand all the processes that keep my company running and do I understand why they run the way they do? With a transformation mindset, innovation results from asking questions that explore root causes, obstacles, and opportunities: • Do I get more insight into my business by having multiple systems managing multiple workflows at a departmental level or using a single system that shows me how all these workflows were being coordinated? Would that yield better oversight and insights? • What if we had to achieve better, more exponential results with less time and resources or via an entirely AI-driven approach? • What if we stopped assuming that the products we have used and the processes we developed over the last decade are optimized for a world that is not constrained by human boundaries? By asking “why” and “what if…” or “how might I N N O V AT I O N B R I E F Alexis Walker Thought Leadership Manager Dave Wright Chief Innovation Officer Brian Solis Head of Global Innovation and delivers value, and innovates into the future. What sets business transformation apart from digital transformation? Digital transformation was focused on fixing and improving the past to optimize and scale capacity during the digital revolution. That is still a key first step in business transformation, but transformation goes further. First, AI tools and capabilities can already improve processes and drive efficiencies to optimize and reduce costs and resources. But this is the new status quo. To go further, take the time and resources that are freed up to creatively explore opportunities and focus on transformation. Second, these are the early days of the AI revolution. Businesses need to be forward-looking and reimagine their organizations to thrive in an AI-driven future. This is not about just making things in your business work better through digitization. It is about doing the things that businesses have never done before or didn’t know to consider and completely rethinking the game in terms of organizational processes, value creation, and performance. Embracing a transformation mindset Business leaders should embrace a different way of thinking to avoid repeating the reformation/evolutionary, not revolutionary, patterns of the digital era in today’s AI era. An iterative mindset dominated during the digital era. It focused on using new technology to do the same things better and faster and less expensively. This iteration mindset focused on questions centered around “what” and “how.” Iteration mindset: • How could I do this faster? • How could I increase frequency or performance? • How could I do this with less effort? • What is the maximum reduction we could achieve? • What is the optimal way to increase efficiency? If leaders apply an iteration mindset to AI and agentic AI, the full potential of the technology and businesses will remain unknown. Instead, a transformation mindset can help push leaders and businesses to imagine what’s next and question business as usual. The transformation mindset focuses on questions centered on “why” and “what if.” Transformation mindset: • Why do we operate this way? • What are today’s biggest problems and why can’t we address them? • What are things that could transform, not fix, my business and why am I not pursuing them? • What data do we have and what data do we need? • Do I understand all the processes that keep my company running and do I understand why they run the way they do? With a transformation mindset, innovation results from asking questions that explore root causes, obstacles, and opportunities: • Do I get more insight into my business by having multiple systems managing multiple workflows at a departmental level or using a single system that shows me how all these workflows were being coordinated? Would that yield better oversight and insights? • What if we had to achieve better, more exponential results with less time and resources or via an entirely AI-driven approach? • What if we stopped assuming that the products we have used and the processes we developed over the last decade are optimized for a world that is not constrained by human boundaries? By asking “why” and “what if…” or “how might The First Step in Business Transformation Is Your Mindset Summary • For most companies, the digital revolution was actually reformation (less digital transformation and more digitization). They digitized their enterprises to make them faster and better, but they did not reinvent them. • During the digital era, innovative companies stood out because of their approach and results. Instead of using new technology to iterate on existing processes, they unlocked new opportunities through digital to transform their business models and reimagine their industries. • The AI revolution introduces the next opportunity to deliver on the promise of transformation. Only now, AI’s limitless potential is poised to enable even more profound business transformation. • Some companies will repeat the past, treating AI like they did digital, resulting in more reformation efforts instead of transformative initiatives. • To meet this moment, companies should adopt a transformation mindset focused on reinvention and innovation. • Those who embrace business transformation will be at the forefront of redefining business in an AI era. 2 Remember the excitement when digital cloud solutions were gaining momentum and promising to transform businesses from top to bottom? The embrace of new digital solutions and the movement of legacy processes to the cloud seemed like such a sea change that it sparked a digital revolution around the world. Technology leaders rallied behind the idea of “digital transformation” to describe the massive effort it would take to revolutionize their organizations for the digital era. In 2011, Capgemini, in partnership with MIT, officially coined the term, defining it as “the use of technology to radically improve performance or the reach of businesses.”1 Fast forward to today and that digital revolution isn’t looking so revolutionary. Instead of digitally transforming, many companies prioritized the modernization of legacy functions. They didn’t set out to actually transform them. Sure, companies digitized, but complex, frustrating processes that stretch across departments and siloed systems of record remain. If anything, things feel more complex as legacy, modern, aging, and customer layers of apps and delivers value, and innovates into the future. What sets business transformation apart from digital transformation? Digital transformation was focused on fixing and improving the past to optimize and scale capacity during the digital revolution. That is still a key first step in business transformation, but transformation goes further. First, AI tools and capabilities can already improve processes and drive efficiencies to optimize and reduce costs and resources. But this is the new status quo. To go further, take the time and resources that are freed up to creatively explore opportunities and focus on transformation. Second, these are the early days of the AI revolution. Businesses need to be forward-looking and reimagine their organizations to thrive in an AI-driven future. This is not about just making things in your business work better through digitization. It is about doing the things that businesses have never done before or didn’t know to consider and completely rethinking the game in terms of organizational processes, value creation, and performance. Embracing a transformation mindset Business leaders should embrace a different way of thinking to avoid repeating the reformation/evolutionary, not revolutionary, patterns of the digital era in today’s AI era.