Maximizing the Potential of Digital Transformations:

Master Thesis

MSc International Business & Management

Maximizing the Potential of Digital Transformations:

‘A study of critical drivers and obstacles for the successful

implementation of digital transformations from a managerial

perspective’

June 2019

[Word count: 15.870]

ABSTRACT

The purpose of this research was to investigate critical barriers and drivers influencing the implementation success of digital transformations within large multinational enterprises. The phenomenon of digital transformation has been increasingly studied in the last years, but many transformation attempts are still unsuccessful. However, the firm’s survival is more and more dependent on digital transformations; thus, implementation success is critical. Although the implementation of different forms has been widely studied, digital transformation is still a new topic for many managers leading this type of transformation. A wide range of various new technologies enabling the change is implemented impacting the entire organization, which has to be coordinated and managed. This suggests that unique influences, impacting the implementation success, arise. The study aimed to fill this research gap and contributes to previous findings by analyzing novel influences perceived by managers leading the digital transformation. A multiple-case study has been applied by conducting ten interviews with managers responsible for leading ten individual digital transformation projects in eight firms. The most common influences are organizational culture and habits, prioritization of tasks and targets, scarce resources, agility, employee involvement, and outside-in focus, having either a positive or negative impact on the implementation success. Specifically, outside-in focus having a positive influence and prioritization of tasks and targets having a negative influence have been identified as novel factors. Regarding the latter, a moderating effect has been found by misaligned targets, strengthening the negative influence. Old habits institutionalized in industry environments demonstrate a challenge for managers and extends prior findings, which previously has focused more on the organizational culture in general. Finally, the importance of customer involvement in agile work methods has been stressed in this study, driving the successful implementation.

KEYWORDS: digital transformation, implementation success, challenges, barriers, drivers,

ACKNOWLEDGEMENT

I would like to take this opportunity to thank all the people who have supported me during my studies and my Master Thesis at the University of Groningen. This study would not have been possible without the support and guidance of several people.

First of all, I would like to express my gratitude to my supervisor Prof. Dr. Olof Lindahl form the Uppsala University in Sweden for his constant support and helpful advice before and during the process of writing my thesis. Prof. Dr. Lindahl has always been available for any questions at all times and has provided me with valuable feedback during the process of writing my thesis.

Secondly, I am sincerely grateful to all the interview partners, who took their time to participate in this research, despite their demanding schedules. The interviews have provided me with interesting insights and valuable information for my findings.

Last but not least, I would like to thank my parents for providing me with unfailing support and continuous encouragement throughout my years of study and the process of writing my thesis. Without their support, the last years would not have been possible.

TABLE OF CONTENTS ABSTRACT ... 2 ACKNOWLEDGEMENT ... 3 LIST OF TABLES ... 6 LIST OF FIGURES ... 6 LIST OF ABBREVIATIONS ... 7 1. INTRODUCTION ... 8 2. LITERATURE REVIEW ... 11 2.1. Digital transformation ... 11 2.1.1. Definitions ... 11

2.1.2. The importance of digital transformation ... 13

2.2. The impact of digital transformation ... 14

2.2.1. Customer experience ... 14

2.2.2. Operational processes ... 15

2.2.3. Business models ... 15

2.3. Managing digital transformation ... 16

2.4. Challenges during the implementation ... 18

2.4.1. How digital transformation differs ... 18

2.4.2. Possible obstacles ... 19

2.5. The role of the manager ... 21

3. METHODOLOGY ... 24

3.1. Research approach and design ... 24

3.2. Research strategy: Multiple-case study ... 24

3.3. Research sample ... 25

3.4. Data collection ... 29

3.5. Data analysis ... 30

3.6. Validity and reliability ... 30

6. DISCUSSION ... 45

6.1. Organizational culture and habits ... 45

6.2. Agility ... 46

6.3. Outside-in focus ... 47

6.4. Employee involvement ... 48

6.5. Scarce resources ... 48

6.6. Prioritization of tasks and targets ... 49

7. CONCLUSION ... 51

7.1. Scientific relevance ... 52

7.2. Managerial relevance ... 53

8. LIMITATIONS AND FUTURE RESEARCH ... 55

REFERENCES ... 57

APPENDICES ... 62

Appendix A: Interview guideline English ... 62

Appendix B: Interview guideline German ... 64

Appendix C: Coding framework of possible challenges ... 64

Appendix D: Coding framework of possible drivers ... 67

LIST OF TABLES

Table 1: Definitions of digital transformation ... 12

Table 2: Case overview ... 27

Table 3: Frequency analysis of possible challenges ... 33

Table 4: Frequency analysis of possible drivers ... 34

Table 5: Cross-case analysis ... 35

LIST OF FIGURES Figure 1: Approach for digital transformation ... 18

LIST OF ABBREVIATIONS

BPR Business Process Reengineering CDO Chief Digital Officer

CEO Chief Executive Officer CIO Chief Information Officer DT Digital Transformation ERP Enterprise Resource Planning

1. INTRODUCTION

Strategy formulation has been a widely discussed research topic in previous studies (Dess & Origer, 1987; Govindarajan, 1988; Miller, Kets de Vries & Toulouse, 1982; Porter, 2008). The successful implementation can be a source of competitive advantage (Tawse, Patrick & Vera, 2019). However, a good strategy generates little value if the implementation of the strategy fails. It is argued that effective implementation is even more challenging than developing a strategy (Greer, Lusch & Hitt, 2017). Subsequently, authors increasingly investigated in strategy implementation (Govindarajan, 1988; Greer et al., 2017; Sacramento, 2017). There are different factors to consider depending on the strategy that is being implemented. Govindarajan (1988) argues that different managerial behavior and skills are necessary depending on the tasks of the strategy. The level of uncertainty is a fundamental problem for the successful implementation of strategies as well, where diverse managerial characteristics are needed when dealing with varying levels of uncertainty in the task environment (Greer et al., 2017).

Today, the business environment has changed considerably due to new digital technologies. This has an influence on the firm’s strategy and is leading to advanced forms of business strategies, creating new sources for a competitive advantage (Bharadwaj, El Sawy, Pavlou & Venkatramen, 2013; Mithas, Tafti & Mitchell, 2013). This is in line with Bashir and Verma (2017), who criticize Porter’s earlier work. The authors point out that strategies aiming at low cost and differentiation are no longer sufficient to obtain a competitive advantage. Consequently, digital business strategies aiming towards a transformation within the organization become increasingly relevant. Digital business strategies represent a desired future state that generate new opportunities for organizations based on digital technologies (Matt, Hess & Benlian, 2015). Though, they do not incorporate transformational insights or guidelines to reach these desired end states. Digital transformation strategies, on the other hand, represent a blueprint guiding companies through the actual digital and subsequent business transformation (Matt et al., 2015). A digital transformation is a change caused by the adoption of digital technologies, impacting ways of working, operational processes, and ultimately the entire organization (Parviainen, Tihinen, Kääriäinen & Teppola, 2017). The transformation offers not only new business opportunities, but allows for old business models to die, and will eventually disrupt entire industries (Leodolter, 2017).

the firm, involving unique challenges and new tasks, and it is essential to investigate this issue further. Authors stress the need for more research concerning specific guidelines for implementing digital transformations to realize the full benefits (Bashir & Verma, 2017; Hess, Matt, Benlian & Wiesböck, 2016; Matt et al., 2015). The knowledge accumulated by prior research cannot be simply transferred to digital transformations strategies. Digital transformations are far more complex, involving new technologies which impact the firm more comprehensively compared to previous forms of implementations. The transformation does not only impact the organization itself but also interactions with clients, suppliers, and competitors (Hess et al., 2016). From a managerial perspective, it is especially important to understand not only the breadth of this impact but also the depth. Complex coordination efforts are needed (Matt et al., 2015). Moreover, it is a critical issue for managers dealing with the implementation, as not one but a whole new set of digital technologies (e.g., Cloud, big data, 5G) are implemented. New skills and capabilities are required to manage this high complexity (Schallmo & Williams, 2018).

More and more firms realize the need for a digital transformation and made it their strategic priority. Nevertheless, many organizations struggle or even fail to implement the digital transformation (von den Eichen, Freiling & Matzler, 2015). In 2018, $1.3 trillion have been invested in digital transformations. However, approximately $900 billion went to waste (Tabrizi, Lam, Girard & Irvin, 2019). According to Fitzgerald, Kruschwitz, Bonnet, and Welch (2013), companies struggle to realize the full benefits of digital transformations due to managers’ lack of experience related to the technologies being implemented, as new skills are necessary to deal with the transformation. At the organizational level, challenges can arise as well due to a lack of vision and a missing sense of urgency (Fitzgerald et al., 2013). Von den Eichen et al. (2015) highlight also cultural barriers that can hinder the effective transformation. These issues, however, lack insight into unique challenges specifically related to digital transformations and research has not yet specified when these problems arise during the transformation. Furthermore, the perspective of managers leading the transformation and how they influence the implementation success has not been studied yet.

arise from digitalization. More research is needed to gain a richer understanding of critical success factors and barriers managers face when implementing digital transformations. Thus, the most common factors affecting the implementation success can be determined. Specifically, the managerial perspective is critical to analyze as they are responsible for the transformation success but often do not have the skills or knowledge. Nonetheless, the transformation is necessary for most firms to remain competitive. As highlighted by Hess et al. (2016), it is no longer about when companies should incorporate a digital transformation, but how to effectively embrace it. Consequently, based on the previous discussion, the following research question was developed:

“Why do firms succeed or fail when implementing new digital transformations in the organization from a managerial perspective?”

To answer this question, an exploratory multiple-case study was chosen, which is most suitable due to the novelty and complexity of the phenomenon, as well as the scarcity of research regarding the implementation of digital transformations. Managers from large multinational enterprises involved in the implementation of digital transformations will be interviewed to investigate the main pitfalls and critical success factors related to the implementation of new digital technologies.

This research will give valuable new insights to the literature with regard to implementations by focusing on the novel challenges that arise in digital transformations. This will enhance the understanding of how the implementation of digital transformations differs from any other form of implementations. Thus, the study can extend the implementation literature and contribute to the scarce research concerning digital transformations by determining the critical factors during the implementation phase. By analyzing the managerial perspective and their role during the implementation, common pitfalls will be determined. Finally, by investigating these critical factors, guidelines can be established for managers on how to overcome these challenges. This will enable firms to take full advantage of the potential of digital transformations.

2. LITERATURE REVIEW

This section will first discuss the theoretical concept of digital transformations, to gain a better understanding of the digital transformation, followed by the impact digital transformations have on the organization. Next, the advantages that result from the digital transformation will be investigated to stress why firms transform. Furthermore, current roadmaps for the digital transformation are examined. This is followed by the challenges that emerge during the implementation. Here, similarities and differences between implementation challenges of digital transformations and traditional implementation practices will also be discussed. Finally, the manager’s role throughout the digital transformation will be examined.

2.1. Digital transformation

Digital transformation is increasingly becoming an important topic and represents one of the major trends in today’s business environment (Parviainen et al., 2017). All industries across the globe are utilizing digital advances, such as analytics, mobility, and smart embedded devices to improve the use of traditional technologies. The need for firms to digitalize is critical to remain competitive (Hess et al., 2016). Ana-Gabriela (2018) even argues that it is the only way a company can stay competitive in today’s business environment, including nonprofit and public institutions. A survey from 2013 demonstrated that 78 percent of firms believe that implementing a digital transformation within their organization is crucial in the next two years to stay competitive. Despite this, 63 percent reported that the change within their organization is too slow (Fitzgerald et al., 2013). Although many firms already understand the need for the digital transformation, many companies are struggling when implementing the transformation and consequently cannot realize the full benefits. Examples of firms failing to implement a digital transformation and keeping pace with the new digital reality include the bankruptcy of the movie-rental firm Blockbuster (Hess et al., 2016) and Kodak (Mui, 2012). Both firms failed to anticipate the industry disruption and did not survive, even though being market leaders.

2.1.1. Definitions

Table 1: Definitions of digital transformation

Scholterman & Fors (2004: 689) “The digital transformation can be understood as the changes that digital technology causes or influences in all aspects of human life.” Parviainen et al. (2017: 64) “digital transformation is defined as changes in

ways of working, roles, and business offering caused by adoption of digital technologies in an organization, or in the operation environment of the organization”

Matt et al. (2015: 340) “a digital transformation strategy is a blueprint that supports companies in governing the transformations that arise owing to the

integration of digital technologies, as well as in their operations after a transformation”

BMWi (2015: 3) The digitalization stands for the complete

networking of all sectors of economy and society as well as the ability to collect and analyze relevant information and to translate these into actions. The changes bring advantages and opportunities, but also create completely new challenges.

Westerman et al. (2011: 5) “the use of technology to radically improve performance or reach of enterprises”

This study follows the definition by Schallmo, Williams, and Boardman (2017), which summarizes several definitions from the current literature. The authors explain the digital transformation as the application of new digital technologies. More specifically, the transformation includes the networking of businesses, customers, and other actors across the value-added chain segments. It requires skills involving the extraction and exchange of data and the ability to convert and analyze the data into information and action. The digital transformation affects the entire company, including business models, relationships, processes, and products (Schallmo et al., 2017). It is an incremental change process (Henriette, Feki & Boughzala, 2015), usually consisting of multiple digitalization projects and initiatives in different areas within the organization (Bloomberg, 2018). An essential aspect of the digital transformation is the combined effect of several digital technologies that are implemented, such as cloud computing, blockchain, artificial intelligence (AI), Internet of Things (IoT), big data and 5G (Lanzolla et al., 2018). These technologies are usually enabled through internet-based technologies with real-time data analytics (Collin et al., 2015).

concerns information processing. The goal of digitalization is the automation of existing business operations and processes. The digital transformation is thus the combined result of digitization and digitalization (Savic, 2019). The main objective of the digital transformation is to generate new data and is also referred to as a data-oriented approach.

Companies can either transform their processes by implementing new technologies or by digitalizing current processes (Henriette et al., 2015). Regardless of the strategy chosen, the digital transformation has four key dimensions, as detailed below:

• Use of technology: the firm’s ability to explore and exploit new digital technologies. • Changes in creating value: the impact of the digital transformation on the value

creation process.

• Changes in structure: alterations of organizational structures and processes as well as necessary skills to take advantage of these new technologies.

• Financial aspect: the firm’s ability to finance the digital transformation.

These four dimensions are referred to as the building blocks of a digital transformation and apply to any industry or firm implementing a digital transformation (Hess et al., 2016; Matt et al., 2015). However, these should not be understood as a guideline for the transformation, but rather as critical elements that are part of the digital transformation.

2.1.2. The importance of digital transformation

for communication, data collection, and control activities can be significantly reduced (Loebbecke & Picot, 2015). By digitizing manual processes and paper-based documents, real-time data can be automatically collected. This allows for a better understanding of performance, causes of risk, and cost drivers. Consequently, managers can even address issues before they become critical (Parviainen et al., 2017) and make faster decisions (Rogers, 2016). These aspects are referred to as internal efficiencies (Parviainen et al. 2017). On the other hand, external opportunities arise as well through new business opportunities by offering, for instance, new services or products. As a result, additional revenue streams can be generated (Parviainen et al. 2017; Savic, 2019). Most importantly, however, the digital transformation helps companies to remain competitive as new entrants and firms, with innovative products and new business models, are disrupting entire industry environments (Bashir & Verma, 2019).

2.2. The impact of digital transformation

Digital transformation has a significant impact on businesses and societies and has even been compared to the next industrial revolution (Parviainen et al., 2017). It is a disruptive change impacting many different components and aspects of the organization (Henriette et al., 2015). The literature highlights three main dimensions that are affected by digital transformations including customer experience, operational processes, and business models, which will be discussed in more detail next (Fitzgerald et al., 2013; Horlacher & Hess, 2016; Westerman et al., 2011).

2.2.1. Customer experience

further discussed next (Westerman et al., 2011). Other approaches to improve customer experience include enhancing existing products and services or offering new products and services instead. Examples include the integration of new apps for customers and stores offering self-service via digital tools (Westernman et al., 2011). For the transformation to be successful, it is critical to understand the customer, and subsequently, firms make use of new technologies to gain an in-depth understanding of the customer (Westerman et al., 2011). An issue arising, however, is the concern of privacy in the process of data collection (Flyverbom, Deibert & Matten, 2019).

2.2.2. Operational processes

Digital technologies can also impact internal operational processes where firms can realize many benefits. The main advantages new technologies offer here are quality and efficiency gains in financial, transactional and supply chain processes, but resources such as time and money can be reduced as well (Westerman et al., 2011). Usually, the aim is to increase efficiency, typically via automation, where firms use new technologies to improve existing activities and processes (Flyverbom et al., 2019). Furthermore, the productivity of employees can be increased. Westerman et al. (2011) point out that one of the main advantages that arise is the increasing transparency of performance. On the other hand, Fitzgerald et al. (2013) stress how digital technologies impacting operational processes increase internal communications. Moreover, risks can be better understood (Fitzgerald et al., 2013). New possibilities arise through virtualizing work processes, which also significantly enhances the knowledge sharing within firms. However, operations and processes are not only optimized through the digital transformation (as is the aim with automation for instance), but it requires managers to “rethink old processes and reimagine new processes and decisions” (Schallmo et al., 2017: 5). Lastly, decision-making is improved as managers have insight into products, customers, and regions via real-time data. Consequently, the strategic decision-making of managers is changing through the implementation as well (Westerman et al., 2011).

2.2.3. Business models

(2013) showed that only 15 percent responded that new business models emerged through the implementation of digital technologies. Creating new business models or even changing existing business models through the digital transformation is a highly challenging and complex task, as it impacts all components (e.g., networks, resources, processes) previously mentioned (Fitzgerald et al., 2013; Schallmo et al., 2017). Nonetheless, new business models created through digital transformation have the highest capacity to disrupt industries (Bashir & Verma, 2017). Furthermore, new revenue streams can be created as more customers and markets can be reached (Fitzgerald et al., 2013). Thus, Bashir and Verma (2017) emphasize the need for top managers to maximize efforts and to spend more time focusing on new business models.

The digital transformation alters business models either through extension or transformation. An extension is the case when a firm uses digital technologies to support new ways to conduct business. It does not replace existing activities and processes but instead creates additional sources for value-adding activities. Business models can also be transformed, which is the case when digital technologies are applied to generate new ways of conducting business, where traditional practices and activities are replaced and eliminated (Li, 2014). The study by Li (2014) revealed that in most cases, the digital transformation enables firms to use a wider range of business models instead of creating new business models which are based on unprecedented ideas. The changes and creation of new business models also have a significant impact on the business models of other firms, who are consequently struggling to survive (Loebbecke & Picot, 2015), as was the case with the movie industry and Blockbuster, for instance.

2.3. Managing digital transformation

Parviainen et al. (2017) emphasize the limited research that has been published specifically regarding the ability to manage the digital transformation. The authors stress the large number of non-scientific publications, such as reports or blogs, discussing digital transformations. However, these sources are often based on speculations or opinions. Consequently, it can be difficult for companies to assess whether this information is reliable and suitable for their situation. Nevertheless, a few approaches that have been identified will be discussed in more detail, to get a better understanding of the process during the digital transformation.

entirely new to the organization. Furthermore, the transformation impacts many different departments and functions and thus has a wide scope. The transformation changes structures and processes drastically within firms and consequently, more specific steps should be considered to manage the digital transformation successfully. Parviainen et al. (2017) developed four steps for the initial stages of a digital transformation. According to the authors, the potential impact of a digital transformation should be analyzed first. Next, the gap between the current state and the desired future state of the company has to be determined. The third phase involves the formulation of specific actions and steps to close the analyzed gap. Finally, the action plan formulated in phase three is implemented (Parviainen et al., 2017). The model ends at the implementation phase; however, the transformation does not end once the necessary action steps are implemented. Control and monitoring are essential tasks that should be undertaken in any major change or transformation within an organization.

Figure 1: Approach for digital transformation (source: Schallmo & Williams, 2018)

The model highlights essential aspects that are considered in this study as well. First, skill management is stressed in this model. As discussed earlier, digital transformation is a challenging task due to the requirement of new skill sets. Multiple roles and tasks might change significantly, and subsequently, appropriate skill management is crucial to implement the changes and new technologies successfully. Furthermore, the organizational culture is stressed as an essential factor within the digital transformation. The model emphasizes the importance of understanding organizational culture. It is also necessary to understand how the organizational culture might or even should change, to subsequently set targets of how the organizational culture should look like, and to ultimately guide and manage this change.

2.4. Challenges during the implementation

As mentioned earlier, digital transformation offers many new opportunities and benefits for firms. Nonetheless, challenges may arise, resulting in failed transformation efforts. But how do these implementation challenges differ from the challenges which managers face when dealing with other implementation forms? This will be discussed first in the following section before looking at possible barriers and obstacles that may arise during the implementation of digital transformations.

2.4.1. How digital transformation differs

the higher complexity, the implementation time and costs are much higher in digital transformations (Kimberling, 2018). The high complexity of digital transformation thus leads to much higher uncertainty as well, compared to other systems or processes that are implemented in the firm (Mithas et al., 2013). Comparisons have also been made with Business Process Reengineering (BPR). Yet, while BPR focuses mainly on automating rule-based processes, thus aiming to make processes more efficient and faster, digital transformation requires people to rethink old processes. It is a more data-driven approach, and consequently, during the implementation, different skill sets, and capabilities are required to successfully implement the digital transformation (Proctor, 2019; Schallmo & Williams, 2018). Furthermore, the digital transformation does not only involve more fundamental changes in operational processes but, as discussed earlier, includes changes in the customer experience and the entire firm’s business model. The transformation also impacts customers and other actors outside the boundaries of the firm. Accordingly, the scope of the change process is considerably larger.

2.4.2. Possible obstacles

According to Hess et al. (2016), managers often lack the awareness and knowledge necessary to decide which elements they need to consider in their digital transformation. As a result, they may fail to consider crucial elements that might have been more favorable for the firm’s particular situation, ultimately leading to unintended negative consequences (Hess et al., 2016). Mithas et al. (2013) argue as well that managers often have imperfect information and limited insight due to the high complexity and uncertainty of digital transformations. According to Joiner and Josephs (2007), implementers know how to get tasks done and are excellent at devising policies, instructions, guidelines, systems, and procedures which guarantee stable and efficient operations. However, they also stress that they are often constrained by an “either-or” mindset, meaning a narrower thinking, which limits the wide range of options and possibilities managers might have for the transformation. Collin et al. (2015) confirm this as well. The authors point out that this limited mindset is increasingly a barrier in light of today’s transformation requirements. Furthermore, the digital transformation is often a challenge for large incumbent corporations as opposed to “born digital” firms such as Amazon or Facebook (Sebastian et al., 2017). Large incumbent firms already have established hardware and software systems in place (Dhingra, 2016), including complex IT architectures, data which is not integrated, and inadequate processes (Westerman et al., 2011). This requires them to make substantial investments to change these processes and they are afraid to take risks since past practices have worked well (Dhingra, 2016).

One of the most crucial aspects and challenges involved in the digital transformation represents the organizational culture, which can also be a barrier for the successful implementation. Employees often do not see the need or urgency to change and are consequently not willing to change (von Leipzig et al., 2017). As already mentioned, the transformation impacts traditional ways of working and roles in the organization and employees may show resistance, as they are more comfortable with the current ways of working (Cawsey, Deszca & Ingols, 2016). However, according to von Leipzig et al. (2017), this is usually not recognized by firms or underestimated and presents a challenge, which managers have to deal with. This is line with Westerman, Tannou, Bonnet, Ferraris, and McAffee (2012), who stress that the digital transformation does not just involve new technologies but requires radical strategic thinking and cultural change in the whole organization.

challenges include costs, capabilities and skills, strategy and vision as well as limited insight and imperfect information. However, these challenges are quite basic and are typically found in change management of any kind (Cawsey et al., 2016; Kotter, 1995). Consequently, these findings lack insight into unique challenges related to digital transformation. Further, it is not specified when these issues actually arise. So far, research has not distinguished between challenges during the different stages of the digital transformation. Therefore, it is necessary to explore the novel challenges that arise during the implementation of the digital transformation and to find more consensus regarding the challenges that have been highlighted so far.

2.5. The role of the manager

In recognition of the importance of digital transformation, organizations have appointed new roles in the enterprise structure, aiming at the success of digital transformations (Matt et al., 2015). Thus, this section will take a more in-depth look in how leadership in a digital age looks like and the critical factors driving the implementation success. The manager’s perspective is critical to analyze, as the success of the digital transformation is dependent on those leading the change. The challenges and obstacles that arise during the process of the digital transformation have to be overcome by the managers who are responsible for the transformation. Furthermore, the manager’s perspective might differ from the employee’s perspective, for instance. As earlier discussed, employees often lack the readiness for change, whereas managers leading the transformation are already convinced of its necessity for the organization. Moreover, the firm’s future success is less dependent on the employees’ decision-making towards the transformation as opposed to top managers leading the change. Accordingly, employees perceive that there is less at stake for them if the implementation fails, as their responsibility is lower. Thus, the manager’s experience and influence during the transformation presents a unique perspective.

The digital transformation is the core responsibility of the CDO. More specifically, the CDO has the responsibility to coordinate and manage the complete digital transformation of the organization by supporting top management in formulating and implementing the transformation (Singh & Hess, 2017). According to Singh and Hess (2017), “the CDO embraces the full spectrum of opportunities presented by new digital technologies and thus aims to bring the company to the forefront of the digital evolution taking place.” (3).

The responsible managers have to specify adequate procedures for formulating, implementing, and evaluating the digital transformation. One of the most critical requirements for the transformation is top management support and active involvement. Further, to cope with a digital transformation strategy, organizations have to become more agile, adaptive, and flexible (Leodolter, 2017). Joiner and Joseph (2007) stress as well the importance of organizational agility, which refers to the ability to anticipate and react to fast-changing and complex conditions. To achieve this, Hess et al. (2016) argue that managers should balance the exploitation and exploration of resources to create an organizational culture that is prepared to work in a digital environment. As the digital transformation involves a drastic change within the organization, collaboration and intensive interactions are crucial (Henriette et al., 2015; Parviainen et al., 2017). To counter resistance, transformational leadership skills and committed managers are crucial. Managers should involve different stakeholder groups that are affected in the process of the transformation (Geissbauer, Vedso & Schrauf, 2016; Matt et al., 2015). It is critical that managers, responsible for the transformation, focus on promoting cross-functional collaboration in all hierarchy levels to mobilize the whole organization towards the digital transformation (Singh & Hess, 2017).

3. METHODOLOGY

The following chapter discusses the methodology of this research paper. The section will first explain the chosen research approach and design. Furthermore, it is explained why the multiple-case study was chosen as a research strategy for this study. Next, the research sample of this study is discussed as well as the process of the data collection and analysis. Finally, this chapter concludes with the validity and reliability of this study.

3.1. Research approach and design

This research is based on an inductive approach. The inductive approach is used for theory development in areas that are under-researched or to extend existing theories (Eisenhardt & Graebner, 2007). Both arguments are fulfilled with this research question, as first, theories concerning implementations will be extended by generating new insights regarding the implementation of digital transformations. Secondly, the phenomenon of digital transformations is still not widely researched.

Data was collected by conducting interviews with managers to investigate this issue and to analyze themes and patterns (Saunders et al., 2012). More specifically, critical success factors and barriers influencing the implementation success of digital transformations were explored by interviewing managers involved in the implementation of the digital transformation. Consequently, the research design of this study is qualitative, which is commonly used for an inductive approach. Finally, the nature of the research design of this study is exploratory, as questions are asked to generate new insights and to make sense of an identified problem or issue, such as the case of digital implementation. Exploratory studies are flexible and adaptable to change, as the direction of the research might change depending on the results of the data collected (Eisenhardt, 1989; Saunders et al., 2012). Furthermore, exploration allows for the development of concepts where the area under investigation is new or vague, as is the case with digital transformation (Blumberg, Cooper & Schindler, 2008). Consequently, due to the limited amount of research regarding the implementation of digital transformations, an inductive and explorative research design is most appropriate to generate new insights and make sense of the identified issue.

3.2. Research strategy: Multiple-case study

qualitative research design. The fundamental strategies include action research, ethnography, narrative research, and case study research (Saunders et al., 2012). For this research, the case study was chosen to answer the research question, which is most appropriate when conducting an explorative research study (Yin, 2014). Case studies are used to “explore a research topic or phenomenon within its context, or within a number of real-life contexts” (Saunders et al., 2012: 179) and to generate novel theories (Eisenhardt, 1989). Case studies can be distinguished between single and multiple-case studies. A single case study is chosen when the nature of a case is of interest (e.g., its uniqueness). In this study, a multiple-case study was applied, which is used to determine whether findings can be replicated across other cases as well by investigating an issue or case in more than one context (Saunders et al., 2012). It is argued that multiple-case studies generate a more robust basis for building a theory and results are more reliable and generalizable compared to single-case studies (Eisenhardt & Graebner, 2007; Yin, 2014). The qualitative data of the multiple-case study facilitates a deeper understanding of complex phenomena and issues (Eisenhardt & Graebner, 2007). For this research, the multiple-case study can contribute to a better understanding of the implementation process of digital transformations and is most appropriate for this study. Thus, the multiple-case study will give valuable new insights into the different influences which managers experience when implementing digital transformations. Consequently, this can benefit other organizations who are confronted with this task as well.

3.3. Research sample

projects within the company. Therefore, in the case of two managers being interviewed from the same company, these managers were in charge of separate transformation projects. Accordingly, the ten cases provide insight into the drivers and challenges experienced by the managers leading these transformation projects.

Table 2: Case overview (source: author)

Company Industry Turnover Number of

Employees

Digital Transformation Function of

Interviewee

Firm 1 Heating, ventilation

& air-conditioning technology (HVAC), renewable energies

€2,4 billion 13,000 Customer: Digital services (with trend analysis function), new ales platform (connectivity), product connectivity

Operation: Automation of processes New business models

R1: Managing Director R5: Head of IoT Program

Firm 2 Electric utility €29,5 billion 43,302 Customer: Digitization of services, digital

platform, predictive maintenance

Operation: Automation of processes, digitizing processes & IT systems

Redesigning existing business models New business models

R2: Head of Digital Strategy &

Transformation

Firm 3 Chemicals €7,2 billion 15,400 Customer: More transparency, new solutions

Operation: Automation of processes, computer-aided plant design, integrating suppliers, whole supply chain is digitalized

New business models: New disruptive approaches

R3: Change Communications Manager

Firm 4 Adhesive

New business models: e.g., digital commerce chemistry market place

Firm 5 _Logistics €3,2 billion 13,000 Customer: Digital sales platform, optimize

customer onboarding time

Operation: Standardize operations, digital logistics frontend

New business models

R7: Chief Digital & Information Officer

Firm 6 Retail e-commerce &

mail order (real estate & financial services)

€13,6 billion 51,700 Customer: Responsive design, predictive analytics, new service concepts

Operation: Automation of processes

New business models: Platform business model

R8: Principle Platform Business

Firm 7 Chemical and

consumer goods (FMCG)

€19,9 billion 53,000 Customer: Customer platform, personalized solutions

Operation: Automation of processes, digitalizing supply chain, smart factories

New business models: e.g., B2B e-shop

R9: Chief Digital Officer

Firm 8 Insurance & financial

services

€103 billion 125,900 Customer: Omnichannel processes, digital affiliation platform, transparency, self-service Operation: Automation of processes, moving to Cloud

New business models: Disruptive products and services

3.4. Data collection

3.5. Data analysis

The goal of the data analysis of case studies is to identify common concepts and to explain their causal connections, ultimately extending theory. Therefore, to analyze the collected data, the interviews were recorded, transcribed, coded, and organized into different categories to detect patterns and relationships which are critical to answer the research question. For the analysis, a method consisting of two stages was applied (Cooper & Schindler, 2003). With this method, the large amount of data can be narrowed down to a smaller size. First, the interviews are analyzed, and a coding framework for each case is used to codify the rough data. The codes are used to retrieve words, sentences, or even whole paragraphs and subsequently organize the large information size of the cases (Miles & Huberman, 1994). In the next stage, the influencing factors in the cases are examined and combined, which is called pattern coding. Pattern codes group the summaries of the previous coding framework into a smaller number of sets and constructs. The influencing factors are analyzed by three summarizing techniques, including generalization, fact rejection, and sentence compression. For generalization, synonyms are found in the interviews, and a single word or phrase is used to express these influences. Fact rejection involves the exclusion of unimportant or irrelevant factors (Thomas, 2004). Sentence compression substitutes long sentences by shorter sentences, which retain the most essential information (Pitler, 2010). Both generalization and word compression are used to integrate factors, that seem to influence the success of the implementation of digital transformations, in the final coding framework. Furthermore, a frequency analysis was conducted to determine which factors were commonly referred to by the interviewees, and the least discussed factors were omitted. Finally, a cross-case analysis was used to evaluate the comparability of the different cases (Yin, 2014). This research method mobilizes knowledge from different case studies (Khan & VanWynsberghe, 2008), where the initial codes are used for the cross-case analysis to make comparisons (Miles & Huberman, 1994). The cross-case analysis demonstrates how the influencing factors of one case are relevant to the other cases as well. Accordingly, common factors across cases influencing the implementation success can be determined.

3.6. Validity and reliability

need to be considered when using case studies for qualitative data collection: reliability, internal validity (credibility), external validity (transferability), and objectivity (Morrow, 2005).

4. ANALYSIS

In this chapter, the key findings of the interviews are presented. The main objective was to explore factors impacting the implementation of the digital transformation. The factors have been identified with a two-stage method to narrow down the raw data (Cooper & Schindler, 2003). In the first stage, the interviews were analyzed and coded line-by-line, where a wide range of different factors emerged. Therefore, in the second stage, the initial codes were grouped and coded into broader labels. The secondary coding frameworks can be seen in Appendix C and D. A frequency analysis was conducted afterward to analyze the final codes and identify the factors with the strongest influence, which will be discussed next. Furthermore, a cross-case analysis was conducted and will be presented afterwards. Illustrative quotes of respondents regarding the different impacts are shown in Appendix E.

4.1. Frequency analysis

Table 3: Frequency analysis of possible challenges (source: author) Possible Challenges & Barriers R1 R2 R3 R4 R5 R6 R7 R8 R9 R10 Total Scarce resources X X X X X X X X 8 Organizational culture & habits

X X X X X X X X X X 10

Prioritization of tasks (targets & bonus culture)

X X X X X X X X 8

Regional differences X X X X X 5

Work councils X X X X X 5

Technology & data management

X X X X X X 6

Organizational structure & silos

X X X X X X 6 Top management issues X X X X 4 Tunnel view X X 2 Low understanding of customer needs X X X X 4 Low understanding of DT X X X X X X 6 Lack of vision X X 2

Table 4: Frequency analysis of possible drivers (source: author)

Possible Drivers R1 R2 R3 R4 R5 R6 R7 R8 R9 R10 Total

Agility X X X X X X X X X X 10 Board support X X X X X X X 7 Outside-in focus X X X X X X X X 8 Communication X X X X X X X X 8 Employee involvement X X X X X X X X X 9 Cross-functional collaboration X X X X X 5 Alignment with business needs X X X 3 Project set up/dedicated team X X X X X 5 Control X X X X X X X 7

Planning & clear goals X X X X X X X 7 Long-term perspective X X X X 4 Focus on customer needs X X X X X X 6 Data X X X X 4 Organizational structure X X X X 4 4.2. Cross-case analysis

Table 5: Cross-case analysis (source: author) Influences R1 R2 R3 R4 R5 R6 R7 R8 R9 R10 Scarce resources (-) Scarce resources; Hiring & retaining; Capabilities, people; Insufficient competencies & resource Getting the budget; Monetary aspect Inefficient resources; High costs Scarce resources; “New” language; Missing capabilities Qualified people are scarce Resources; Competencie s; Tech competencies are scarce; Experts needed Money is scarce; Experts want to join other firms Finding the right person: Employees are old & lack the skills; Hiring new employees Organization al culture & habits (-) Low perceived urgency due to success; People are resistant; consuming; Cultural change; Launch & learn difficult due to old habits; Product-driven environment is an issue Success makes people less willing to change; Hesitation; Human/cultura l issues; Old habits; Failure is challenging in the industry People & cultural aspect; Negative attitude towards digital mindset; More initiative from employees necessary; Change experiences of employees; Old habits; Industry issues Hesitance; Fear; Agility difficult in German engineering; Steps are defined in the industry; Control necessary due to products; Mentality of organization Culture & process improvement s needed; Mismatch with internal processes; Changing plans contradict to old habits; Product- & process-driven environment Agile work mode challenging Cultural issue; Not willing to change; Risk aversion; Change resistance; Old habits; People prefer old ways of working; Traditional thinking Cultural aspect; No tool/ initiatives for culture; People don’t see the necessity; Mindset; Traditional thinking; New ways of working not well adapted Cultural aspect; Employee is acting in own interest; People don’t want to change; Germany is not agile Cultural aspect; People have fears; Risk-aversion Learning culture is a challenge Prioritization of tasks & targets (-)

Performance targets Bonus culture; Targets Traditional targets Agility (+) Launch & learn;

Experimenting new ideas Agile portfolio; Failure is Important

Pilot tests before

scaling Agility; _{Learning by} doing; Traditional & agile processes Launch & learn; Propose & start moving Agility; Launch and learn; Prototypes; Agile work mode trainings Agility Experimentat

5. FINDINGS

This chapter presents the key findings that emerged from the analysis of the exploratory case studies. The main objective of the study was to analyze the most critical factors influencing the success of the implementation of the digital transformation from the managerial perspective. The chapter concludes with a conceptual model demonstrating the relationship between the influencing factors and the implementation success of the digital transformation.

5.1. Negative influences

The most common factors that have a negative influence on the successful implementation will be discussed first. Specifically, the factors scarce resources, organizational culture and habits, and prioritization of tasks and targets will be looked at in more detail.

Scarce resources

In total, eight out of ten participants mentioned that resources are scarce, thus making it more challenging for managers to successfully implement the digital transformation. Financial resources were mentioned, which are often limited, as highlighted by Respondent 2, “[a]nd then just the ongoing challenge of the monetary aspect of a large transformation.”. However, it was even more frequently mentioned that qualified people are scarce, as expressed by Respondent 4, “[t]he resources are scarce. Advanced analysts are in high demand right now, because everybody is embarking on the journey of digital transformation.”. This is supported by Respondent 1 as well, who stated:

Just staffing these projects with the right people, because it is a scarce resource, people who really know how to do a digital transformation. There are sexier companies, if you like, where these people could go to. So, hiring and retaining, keeping these people is a challenge.

Proposition 1: The greater the gap between the needed and available resources, the lower the

success of the implementation of digital transformations.

Organizational culture and habits

The organizational culture scored ten out of ten and was even stressed by several respondents as the most critical challenge during the implementation of the transformation. Respondent 7 stated, “[b]ut the change resistance of people is a key challenge for digitalization.”. Respondent 2 highlighted as well, “[y]ou can have the greatest technology in the world, you can have the greatest ideas, but if you are not convincing the people who are actually going to deliver it, then it most probably will not work.”. One of the most frequently mentioned reasons for this change resistance was the industry environment being rather product-driven and the old habits of employees resulting from this environment. This also creates challenges to work agile, which is critical during the transformation. Respondent 1 highlighted:

But it is very difficult with our DNA, with engineers, who are drilled for perfection to go for less perfect solutions and learn. Because if you launch something, you can observe how people work with it, where problems arise, etcetera, and then adapt. And that is not a habit that we have. We tend to really develop for perfection and then launch. Failure is a critical part of the transformation, and most employees are not used to this way of working. Many respondents also suggested that this is not only an industry challenge but especially a challenge in Germany. Furthermore, some respondents mentioned that often employees are risk-averse. Respondent 2 argues that there has to be a higher degree of “educated risk-taking”. Finally, another issue regarding the organizational culture is the low perceived urgency for the implementation of the digital transformation. One reason mentioned was that employees preferred their old ways of working as they believe these processes are more efficient. The second reason that became apparent was that the organization has been successful so far, and therefore, employees do not see the necessity to change. An example is demonstrated by Respondent 8:

And there is, of course, a lot of things that grew historically, you could say, in the firm. For a long time, this also worked really well, and I would say this results in a barrier for the urgency or necessity to change. So, to organize something different and to try new ways of working, this is not well adapted by the employees.

however, is one of the most challenging problems for managers to overcome and is influencing the effective transformation. Consequently, this line of argumentation leads to the following proposition:

Proposition 2: The higher the change resistance, the lower the success of the implementation

of digital transformations.

Prioritization of tasks and targets

Another factor having a negative influence on the implementation of the digital transformation was the degree of different tasks employees have to execute, resulting in conflicting prioritizations of tasks. During the transformation, employees have to combine traditional tasks with the new tasks concerning the transformation projects. Respondent 10 pointed out that “…the transformation projects usually come on top of those other tasks… But employees have to combine these tasks in a structured way. So, prioritizing is a huge challenge we have until today.” Even though the firms are transforming their businesses, their traditional business model is still a critical part of the organization, and often, the majority of their revenue is still generated by the core business. Employees have to align these two businesses in their daily work, and managers struggle to convey this message for employees to coordinate these different tasks effectively. Respondent 8 expressed:

And people are measured by these targets and numbers from the board. At the same time, they are supposed to focus on the transformation and are supposed to generate additional revenues or generate revenues by other means as opposed to how they did it before. And it is extremely difficult not only to secure and develop the existing business while designing and developing the new business, where more or less the same people are needed… And therefore, it is quite a conflict area due to conflicting priorities. Moreover, the targets set by managers impact the employees’ prioritization of tasks as well. Here, the issue of the bonus culture was mentioned as well as the risk-aversion of employees. Due to the higher risk the digital transformation projects have, the employees are less willing to fully embark on these projects if this means it could harm their bonus or the outcome of their other targets. According to Respondent 3:

know if this is something that will harm my outcome, which might be very likely. This is a barrier...

The quotes illustrate how the alignment of traditional tasks and the new task of the digitalization projects lead to difficulties in the prioritization and execution of these tasks, ultimately having a negative influence on the implementation success. Thus, managers struggle to implement the transformation projects, if employees pay less attention to these new business goals. This relationship becomes even stronger if there are not the right incentives in place or bonus systems that only support traditional targets. Consequently, the following proposition was formed:

Proposition 3a: The higher the degree of conflicting tasks, the lower the success of the

implementation of digital transformations.

Proposition 3b: The higher the mismatch between the goals for the incentives and the goals of

the digital transformation, the greater the negative effect of prioritization of tasks on the success of the implementation of digital transformations.

5.2. Positive influences

Next, the positive influences driving the implementation success of the digital transformation will be discussed. As mentioned earlier, the most frequent factors were agility, outside-in focus, and lastly, employee involvement.

Agility

All participants mentioned the use of agile methods, having a positive influence on digital transformation. According to Respondent 4, “…you need to find a way how to do things step by step and learn while you walk. And in that, the agile method helps a lot.”. The agile work method, as highlighted by the interviewees, includes creating a learning culture that adapts quickly to changes. Many respondents discussed the process of launching and learning. For instance, Respondent 1 explained:

But then in our changing world, we need to much more go to a launch and learn environment, where we do not build the 100 percent solution, but we build a good enough solution, go with that and improve it along the way when it is already in the market.

organization.”. However, not only experimenting and learning are essential aspects for agility, but also having an agile portfolio, where investments and projects are regularly checked and changed if needed. The agile portfolio was also highlighted by Respondent 2:

We have an agile portfolio. On a monthly basis, we sit down and do a digital portfolio review. And we look at the way the business has changed, but we also look at whether the hypotheses we’ve placed will prove true. So, rather than just get a lot of money to run these individual projects, we really sit on a monthly basis together. We challenge someone to create a hypothesis and then ask them to come back in a month to see whether they’ve proven or disproven, and then we make a decision whether to stop, scale, or pivot. This keeps us going.

The participants pointed out that the digital transformation is for many firms and industries an entirely new phenomenon. Thus, managers explained by incorporating agile methods, including new learning approaches, adaptation as well as building flexible structures and frameworks, the success of the implementation can be increased. Therefore, the following proposition was defined:

Proposition 4: The greater the adoption of agile work methods, the higher the success of the

implementation of digital transformations.

Outside-in focus

Another positive influence mentioned by eight out of ten participants was the use of an outside-in focus. As highlighted by Respondent 2:

And that’s done on a pretty much consistent basis, where we are looking at outside inputs. So, looking at the competition, looking at the utility space, but also new entrances and customer expectations. One of the big shifts we’ve made over the past few years is focusing more outside-in instead of inside-out.

solutions often support the agile structure of the organization, which was pointed out by Respondent 3:

Everything that goes into the administrative direction is also willingly and increasingly constructed flexible, which is also often accompanied by external solutions. Because they can also be more easily and flexible set up or dismantled. There we have, of course, also a comparison.

Thus, agile and flexible organizations can adapt more quickly to market trends, thus increasing the effectiveness of digital transformations. Finally, supporting the use of external input is a strong network with other firms and industries. Respondents have explained how they established large networks with other organizations to develop new ideas and discuss their progress. According to the respondents, managers working together and exchanging information with other firms positively impacts the success of the firm’s digital transformation. Respondent 9 explained:

We have established a really good ecosystem. An ecosystem where consultants really have to fear why someone would still work with them. Because if you have the opportunity to say I will now do with McKinsey or BCG or Accenture eight months a study about whatever, this will cost me two million and a lot of time. Or you call four people from the network who all work in this area, ask them, and you get the answer in five minutes. That is speed.

It can be concluded that managers using external inputs, such as existing solutions on the market, comparisons to other firms and industries, and exchanging information with external partners have a positive influence on the implementation of the digital transformation. Thus:

Proposition 5: The more managers incorporate an outside-in focus, the higher the success of

the implementation of digital transformations.

Employee involvement

people, top managers have to create a shared understanding within the organization towards digital transformation, as there are still many misunderstandings around the phenomenon of digital transformation. For instance, Respondent 9 explained:

The very first thing you need is the same language. Because if one says digitalization, and the other says digitalization, they both understand something different… So, the very first thing was what I did is to create the same vocabulary, so everyone knows what we talk about.

Some participants also talked about demystifying the hype. By communicating the change and creating a shared understanding people are more likely to participate, which has a positive impact on the implementation success and increases effectiveness, according to the respondents. An important strategy to involve employees at all levels is applying a bottom-up approach in the organization. For instance, Respondent 1 explained, “… it is not just top-down exercise, it is also being carried bottom-up. I think that is the major key to the successful implementation.”. Important factors that were mentioned here as well include managers trusting people and involving the ideas of employees on all hierarchy levels. As explained by Respondent 3, this should be approached as follows:

Ask them if they have any ideas. Where are pain points? Tell us a little bit about your plans or what you always wanted to do. A completely different starting point… And that is what it’s all about, that you jointly approach this.

The involvement of employees is also increased by involving them in the decision-making processes. The respondents explained that the employees are usually experts in their department and thus have valuable insight which can benefit the implementation of the digital transformation. Accordingly, since the digital transformation impacts the whole organization, employee involvement is critical. Managers reported by focusing on a joint approach and relying on the input of employees during the transformation, the implementation success can be increased. Consequently, this leads to the following proposition:

Proposition 6: The more employee involvement, the higher the success of the implementation

of digital transformations.

5.3. Conceptual model

negatively influence the success of the implementation of the digital transformation, whereas agility, outside-in focus, and employee involvement have a positive influence. The possible influences represent the independent variables. The dependent variable is the implementation success of the digital transformation. Finally, bonus culture and targets represent the moderating factor, strengthening the negative influence of conflicting priorities of tasks on the implementation success.

Figure 2: Conceptual model (source: author)

Implementation Success of Digital Transformation Scarce Resources • Budget • Qualified people

Organizational Culture & Old Habits • Industry environment Conflicting Prioritization of Tasks Agility • Flexible structure • Launch & learn

Outside-In Focus • External solutions • Strong networks Involving People • Create shared understanding Bonus Culture &

6. DISCUSSION

This section discusses the findings of the analysis. The results are compared to previous findings from the literature. Furthermore, newly identified factors are examined and discussed.

6.1. Organizational culture and habits

First, one of the most critical aspects and challenges found in this study was for managers to change the organizational culture. This is in line with previous findings in the literature. As discussed earlier, authors have argued that the organizational culture is most challenging to change, but a cultural change is necessary for the transformation to be successful (Cawsey, Deszca & Ingols, 2016; von Leipzig et al., 2017; Westerman et al., 2012). The process of managing the digital transformation, according to PwC (Schallmo & Williams, 2018) also highlights the importance of changing and managing the organizational culture for the digital transformation. Managers explained how challenges arise due to new ways of working and agile work methods that have not yet been widely used in many industries prior to the transformation. Previous research has focused explicitly on the change resistance of employees. Von Leipzig et al. (2017) highlight that employees do not see the need to change. Furthermore, Cawsey et al. (2016) emphasize that employees prefer their current ways of working. This study supports both arguments. However, literature has not discussed old habits that have been institutionalized throughout time. The findings of this study show the actual difficulty of changing to new ways of working, not only because of their change resistance but also due to the industry environment and heritage. This extends previous findings in this dimension and shows the difficulty managers have of changing these habits. Further, some respondents argued that this is primarily a challenge in Germany as opposed to other countries the firms operate in. Respondent 9 stated:

Germany, in my opinion, has two problems. First, everything has to be perfect before you even make something. But that doesn’t work anymore. Second, I don’t think I could describe it better, but I think it is an envier culture. The people in Germany, they are not happy for someone else’s success, but they are envious.