Dual Transformation framework will help incumbent organizations stay ahead and not get into obsolescence. One of the interesting thing, I learnt or observed from Proctor and Gamble (P&G) is Problems of predictability and How US$ 10 Billion (as of 2017) sales making Pampers was born. Dual Transformation approach is proved by solid examples from various companies such as Aetna, Adobe, Singapore Post, Amazon, GBS Bank and many more. Transformation A = Change the ‘How’ you deliver i.e. finding more effective and efficient ways to address the customer needs to maximize re-silence of your existing / historical core business Transformation B = Creating the new ‘What’ you deliver i.e. The process of making the complicated → simple, expensive → affordable always grows markets. This is based on the seminal work done by Harvard Business School Late Prof. Clayton Christensen during early 1990’s on “Theory of Disruptive Innovation”. Inspiration & Courtesy to books and research reports 1. The Innovator’s Dilemma - Late Prof. Clayton Christensen 2. Theory of Disruptive Innovation - Late Prod. Clayton Christensen 3. The Structure of Scientific Revolutions - Late Thomas Khun 4. Dual Transformation - Mark W Johnson, Scott D Anthony, Clarke G Gilbert 5. The First Mile: A Launch Manual for Getting Great Ideas Into the Market - Scott D Anthony

1. Dual Transformation
How to Reposition Today’s Business while
Creating the Future

2. Transformation means
When the fundamentals of your business changes. E.g. Caterpillar to Butterfly, Solid to Gas
i.e.
➔ It's not just replacing a fax machine with email and introducing a mobile app.
➔ Remember, your key metrics changes; else it’s not transformational (it’s just transactional)
➔ No more monolithic transformation; Transformation ≠ Good to Great
➔ It's about, “How to do you convince ‘TOP TALENT’, that there remains a viable future in a rapidly diminishing
business ?
◆ Convince not with DATA (ofcourse, data doesn't exist); but with a grand VISION & STORYTELLING
Solid
becomes
Gas

3. Dual Transformation | A + B + C = Δ
1. Re-imagining the very soul of the
organization
2. Curtail investments in legacy core
3. Repositioned, core business and quickly
growing new growth business
4. Disruptive innovation happens in the
historically constrained market, bringing new
solutions to millions of people
5. Prepare for change when you’re at the top of
the game. Refer Fitness Landscape below
A + B + C = Δ
★ Formula is simple; But execution is Complex.
Killer formula.
★ A = Change the ‘How’ i.e. finding more
effective and efficient ways to address the
customer needs to maximize re-silence of your
existing / historical core business.
★ B = Finding new way to solve a different (new)
problem. Rethinking ‘What’ we deliver. Create
a new growth engine.
★ C = Bridging the capabilities link between A
and B. Taking advantage of difficult to
replicate assets without succumbing to the
sucking sound of core.
★ Why do both A and B - because to expand the
core business without facing existential threat
Your company;at Top of the
heap. Only option is “No
direction but Go down”
Disruptor
Try Crossing the Chasm to move ★ from ⬛ After disruption, 10’s of 1000’s of Know-How
is lost
Local
maximum
Top of the
Heap

4. 4 step actions framework to start Dual
Transformation
● The courage to choose before the platform
burns
● The clarity to focus on a select few moonshots.
● The curiosity to explore even if the probable
outcome is failure
Netflix’s Reed Hastings started the transformation
before it was necessary; an action setup for a
decade of successful growth. Aetna’s Mark Betrolini
decision to reconfigure the insurance giant.
Former President. John F Kennedy, USA - send a
man on the moon and bring him back within this
decade. Call it “Pie in the Sky”
Adopting the process of ‘Trial and Error’ method;
with many failing efforts along the way
A motivational purpose and relentless separation of
work. Even when everybody is in doubt “leaders
remain firm in the face of commitment, saying “A
does A; B does B”
● The conviction to preserve in the face of
predictable crisis

5. Select examples of companies adopted the transformation
● Xerox
○ Core threat to Xerox was commoditization in its core printer and copier business. Driven by
globalization, the rise of internet, which dampened demand for physical solutions.
● Adobe
○ Everyone familiar with PDF. Software packages such as Photoshop, Illustrator, After
Effects, Dreamweaver were backbone of modern internet. But, when Shantanu took over in
2007, it lost US$ 1 B in revenue due piracy software
● Aetna
○ Healthcare spend in US (GDP)
○ 6% in 1960 to 20% in 2011
○ Obamacare put pricing pressures on pharma and medical device companies; but looked like
a panacea for insurance companies

6. Transformation A = Change the ‘How’ you deliver
1. A - is for a validated / broad market. A is confronting the Innovator’s Dilemma.
2. It's a Gale of creative destruction.
3. Mostly importantly, ‘What’ you deliver remains same; Only ‘How’ you deliver changes. i.e. finding more
effective and efficient ways to address the customer needs to maximize re-silence of your existing /
historical core business
4. Note: The biggest/core problem for companies “Change the way they operate i.e. over time companies
develop rules, norms and metrics designed to perpetuate how they create, capture and deliver value”
5. First > understand at a detailed level - the jobs to be done that customers consider unique and
meaningful.
6. Second > Then innovate your business model to those jobs. Remember, customer pays not for
product; but for satisfaction
7. Third > Determine and Measure new metrics
a. Most companies do wrong in the name of Digital transformation is, simply doing what they used
to do digitally. E.g. ripping out fax machines with email, and email with text messages .
8. Fourth > Implement aggressively ie. Do Knee-deep execution . Sometimes, you have to ‘burn the
boats’.

7. Transformation B - Creating the new ‘What’ you deliver
Essence“The process of making the complicated → simple, expensive → affordable
always grows markets.”
1. B is about seizing the innovator’s opportunity.
2. B is the wind turbine to power the next wave of growth
3. Relentless focus on customer.
4. Most importantly, B is a separate entity, with a separate target market and a separate business model
5. Keys to success -Identify problems that target customer historically wanted to solve but cant’
a. Identify constrained markets
b. Identify Consumption barriers
i. Consumption pyramid - i.e. by wealth; highlight disproportionate spending and grow by simplification
ii. Consumption map - where and how consumption happens
iii. Consumption chain - take a look of the chain has potential to drive new growth
6. Beware illusionary non-consumption i.e. sometime people don't care much about the problem. Remember, not all ‘white
spaces’ want to be filled. Some ‘blue oceans’ are crystal clear for a reason
7. Use your salesforce and powerful brand to access senior leaders at significant corporations and win meaningful deals.

8. ● D - Document, your idea with all components
● E - Evaluate, in multiple lenses to identify uncertainties and
weak points
● F - Focus, on most critical areas
● T - Test, rigorously and rapidly
● H - Hypothesis, like a good scientist, start with hypothesis and
then design an experiment
● O - Objective, make sure why are running and what hope to learn
● P - Predict, make a prediction on what the right answer is
● E - Execution, Execute against the prediction.
7. Most importantly, Business Model can be learnt only by Test & Learn approach. Start with a series of experiments. Discover the
path by action and not just based on Analysis. The best predictor of future behaviour is past behaviour
8. Remember, successful innovators manage risk through’ disciplined experiments. E.g. Wright Brothers used ‘Kite’; when it fails,
nobody gets hurt. Use DEFT and HOPE frameworks from The First Mile by Scott Anthony.
9. Focus on Deal Killers, which are binary make-or-break issues. Pivot points. Confidence Boosters.
10. Assess your competition, and accelerate capability via acquisitions and external hires. Apple made 26 acquisitions between 2001 -
2010.
11. In 1962, Thomas Khun’s book The Structure of Scientific Revolutions highlighted, “Paradigm Shifts, always came from outside of
the established orthodoxy.” if you don't bring in aliens, it's unlikely you will be able to push the innovation further.
12. Involve 3 types of people for Transformation B to be successful
a. Aliens - who will push you in a new directions
b. Diplomats - who will help negotiate bilateral relationships; who can speak core and alien and arbitrate differences b/w two
c. Savvy Veterans - a person who knows the people to call to get things done, recognizes the unstated assumptions, influence
critical executives
Transformation B - Creating the new ‘What’ you deliver

9. Transformation C - Capabilities link between A and B
1. C flips the innovator's dilemma into opportunity. But C is difficult to understand. And much harder to explain.
2. Late. Clayton’s Disruption theory show readers “New technologies cause great companies to fail”.
3. Only way for incumbents to succeed with disruption is by creating a separate organization and having substantial freedom
4. Medtronic (pacemaker - a small, implantable device regulates flow of electricity to heart) in India, could address the affordability
problem with a radically cheap pacemaker. Device’s $1000 price point was unaffordable for most potential customers. Hence,
Medtronic applied principles from Grameen Bank to serve previously unserved low-income consumers.
5. Digital Buyer needs a Digital Seller. Do role playing exercise to combat the biases that blind you.
6. 3 keys for successful C
a. Stocking the link selectively
b. Manage the interfaces strategically. Develop A and B systems with different set of rules
i. People may be collaborative; byt systems are not. Systems such as how you budget, allocate people b/w teams,
gather customer feedback, create products, measure and reward people.
ii. Have different set of rules for A and B
iii. Break things to move fast
iv. Create a formal exchange team. Mix people from A and B. Ensure B is succeeding.
v. Institute Transfer Pricing.
c. Arbitrate actively
i. For first few months, it looks like A is triumphing because A brings money for the present. Involve CEO 3 levels down
to establish B is succeeding.
ii. E.g. Aetna’s Mark Bertolini has driven the dual transformation aggressively .

10. Courage to Choose using 7 Early Warning Signs grouped to 3 stages
Stage 3 - Impact
6. Early Warn Sign 6 - A viable
competitor fine-tunes a
disruptive business model.
7. Early Warn Sign 7 - Slowing
revenue growth is coupled with
increased profit margins as
leaders exit volume tiers and
cut costs
Stage 1 - Circumstances
1. Early Warn Sign 1 - Decreases
in customer loyalty, driven by
overshooting
2. Early Warn Sign 2 - Significant
and Lasting investments by
Venture Capitalists
○ Overestimate technology
in short run,
Underestimate the effect
in long run
Stage 2 - Catalysts
3. Early Warn Sign 3 - Policy
Changes open the door to new
entrants
4. Early Warn Sign 4 - Entrants
emerge at the low end or market
fringes with inferior-seeming
solutions
5. Early Warn Sign 5 - Customer
habits and preferences show sign
of shifting
5 Tips
on
“How to Spot Early
Warning Signs”
1. Go to periphery - i.e. Focus on non customers
2. Pay attention to small things - Just think where was Youtube in 2005; no-one watched
3. Think about what could happen in the future not what is happening now
4. Involve Outsiders - Because, it's hard to identify our own problem. E.g. Clark and Mark conducted
a colloquium about responding to disruptive change. Intel, Kodak, US Defense dept attended.
Kodak found problems with Intel’s low-end microprocessors. Defense guys could see Kodak;s
challenge with Digital imaging. But none of the companies could see their own problem
5. Assess the cost of inaction

11. Clarity to Focus using 3 step process
1. Determining your growth gap (Remember, don’t spend too much time
and overthink the problem)
a. Set a Target
b. Estimate the potential of current operations
c. Estimate the potential of existing investments in new growth
d. Calculate your growth gap
1. Determining the goals and boundaries (Create a bulls-eye diagram
with Red, Amber, Green status)
a. What type of service should it consider?
b. How much was it willing to spend pursuing new opportunities?
c. How long is company willing to wait before a given idea had an
impact?
d. What geographies should it target?
e. Is it willing to pursue other regulated areas?
f. Are areas replete with bribery and corruption worth considering?
g. Which customer group can you target?
h. What is the offering you will provide? How will you generate
revenues?
i. Which suppliers and partners you will use ? Whats tactics and
Go-TO Market strategy you will use ?
1. Determine your strategic opportunity areas
a. Is the what compelling?
b. Is the who sufficient?
c. Is the how believable?
d. Is the why convincing?
Key to success
1. Adopt a Future-Back mindset
a. What next year will look like?
b. Get on to Time-machine and decide what
do you want to see ?
c. Create a Blurb about, how the
transformation will look like . Not $$$
d. Have executive conversation
e. Draw From and To states
f. Try 60-90 days effort
2. 5 key topics for Future
a. The most likely future environment
b. The desired state of the future company
c. The most critical strategic initiatives
d. The most critical assumptions
e. Critical near-term action items to start the
journey
3. Think across 3 frames
a. Moonshot frame
b. Lunar module (or launch pad)
c. Tuesday lunch
4. Most importantly, be will to wave Good-bye to the
past

12. Curiosity to explore
1. Problems of predictability at Procter & Gamble (P&G)
a. Remember, strategy is what you do and not what you say. It is how you spend time and money and allocate your resources.
b. One top P&G executive said, “we’re organized to deliver consistent, reliable results and that’s exactly the problem”
c. P&G’s leaders were worried. They peered into the development pipeline and saw a problem
i. Line extension and incremental ideas crowded the pipeline. That prospect a declining growth not next or next decade. Beyond that.
ii. P&G leaders decided to systematically and reliably create ideas that the potential to create new brands and new categories. Through
this thinking, the $ 10 Billion Pampers was born
2. How Predictability interferes with Innovation
a. Pfizer exploring the drug coded “UK-92480”; hoping it would lower blood pressure(BP) in patients. It didn’t work. I.e. did not
lower (BP). however, male patients be particular to come back and ask for more. Pfizer studied that, optimized side effects and
new a drug for the erectile dysfunction category and multibillion-dollar blockbuster Viagara were born.
b. In 1920s, Alexander Fleming brimming with ideas about how to kill bacteria. His mind was so crowded, he left the lab in
shambles and took a vacation in Aug 1928. On his return, he found something he didn't expect, a petri-dish festering with
bacteria - except for one particular part of the dish. And Fleming discovered Penicillin .
3. Explore Vs Exploit
4. Curiosity and decision making
5. Curiosity is critical. Think of difference between a Venture Capitalist Vs Corporate Planner
a. Remember, 75% of VC investments fail (median and mode) with fat ZERO.
6. 3 components of new ideas
a. The funding component
b. The focus component
c. The failure component
7. Create safe places for innovation
8. Expose leaders to new thinking (i.e. ) involve outsiders to give a talk
9. Reduce the gap between customers and leaders

13. Curiosity to explore & Conviction to preserve
10. Reinforce the curiosity in routines and rituals
a. Try “Customer Close-up” and “Get out of the building”
i. Goto the store, put the trainee badge and directly interact with customers
1. Walk a mile in the shoes of the customer
2. Simplify experiments as like “Adobe’s Kickbox”
3. Celebrate desired behaviours e.g Dare to Try by TATA group
4. Find a inverse / reverse mentor i.e. who failed and has scars
5. Learn to code e.g. NOKIA Chairman - Risto Siilasmaa is coding and expert in ML
10. These are great immersive programs and ways to develop deep empathy with customers and lead participants to question
underlying assumptions they have about the business. The larger the company is, the wider the gap between its leaders and
its customers.
Conviction to preserve
1. The mantra - A does A; B does B
2. You cannot win based on the numbers; so you ‘have to tell a compelling story at the centre of the strategy’.
3. Ground your effort towards motivating purpose
4. Remember, Theodore Levitt ‘Marketing Myopia’ ; don't focus on competition too much; because you get to obsolescence.
5. Manage 3 crises of transformation
a. Crises of commitment
b. Crises of conflict
c. Crises of identity i.e. Communicating your new identity to all.

14. Adobe
Aetna
Singpost
(Singapore Post)
Amazon
From Packaged software to subscription
(Creative Cloud)
Moving from software to marketing
services e.g. with the acquisition of
Omniture and other 2 companies
Shift from selling insurance policies and administrative services
to large companies. It created consumer-facing marketplace
that would make shopping for health insurance. fundamental
change in their pricing from Fee-for-service to Fee-for-value
Committed to providing new services to doctors and
hospitals. Help govt.and employers take better care
of their beneficiaries by offering cost-effective
access to high-quality care
From mail delivery to logistics service provider. SingPost
revenue grew $300M - 2004 to $700 M - 2014. E.g in US
mail volume dropped from 206 B - 2004 to 155 B - 2014
i.e. 25% decline
Introduced Bill payment services at Post offices,
offering mailroom management and BPO services.
Acquired Quantum solutions to power e-fulfillment
services in 10 countries
Amazon Prime, Customer reviews Amazon Web Services (Board members &
investor - John Doerr said to Jeff Bezos, its a distraction
and un-happy with AWS. Bezos ignored him)
Example of Transformation A and B
ACompany B

15. Final thoughts on Dual Transformation
1. How
2. Incremental
3. Exploit - precision
4. Piecemeal
5. Predictable, consistent and
reliable
1. What
2. Transformational
3. Explore - finding new paths
4. Big & Bold
5. Exponential and disruptive
Transformation A Transformation B

16. Inspiration & Courtesy to books and research reports
1. The Innovator’s Dilemma - Late Prof. Clayton Christensen
2. Theory of Disruptive Innovation - Late Prod. Clayton Christensen
3. The Structure of Scientific Revolutions - Late Thomas Khun
4. Dual Transformation - Mark W Johnson, Scott D Anthony, Clarke G Gilbert
5. Crossing the Chasm - Geoffrey Moore
6. The First Mile: A Launch Manual for Getting Great Ideas Into the Market - Scott D
Anthony