Praise for The Digital Helix
“You can’t successfully manage transformations without effectivelymanaging expectations. By ruthlessly confronting how digital innovationexplicitly disrupt enterprise expectations, Gale and Aarons focus executiveattention exactly where it belongs: the challenge of aligning greaterexpectations with greater value.”
—Michael Schrage, research fellow at MIT Sloan School’s Initiativeon the Digital Economy
“In my role at Forbes Media, I have the good fortune and honor to meetpersonally with, write about and to conduct research among many hundredsof corporate leaders and entrepreneurs around the globe. Each is to a greateror lesser degree leveraging Welch’s dictum and the parallels between thoseexperiences and what I learned from reading The Digital Helix arestriking.”
—Bruce Rogers, chief insights officer at Forbes
“Don’t let the title fool you; this goes way beyond digital. Gale and Aaronshave given us a refreshing perspective about the importance of simplicity,clarity, and culture in any transformation, along with a poignant reminderthat we must never lose sight of our most critical asset—the very people weserve.”
—Colette LaForce, named one of the Top 50 Women in Technology, aFierce 15 CMO, and CMO Leader of the Year
“Those who can take an adaptive stance, both as individuals andorganizations, are best positioned to realize their full potential duringuncertain times. Through research and insights, Gale and Aarons providethe approach and tools for executives to lead by example in order to thrivein the digital age.”
—Vanessa Colella, head of Citi Ventures and Chief InnovationOfficer, Citi
“It isn’t enough to evolve your existing business processes. Gale andAarons understand that businesses need real transformation. In The DigitalHelix, they provide information and tools to help you understand whatsuccessful transformations look like.”
—Kelly Faley, Vice President, Digital Marketing, Sharp HealthCare
This publication is designed to provide accurate and authoritative information in regard to the subjectmatter covered. It is sold with the understanding that the publisher and author are not engaged inrendering legal, accounting, or other professional services. If legal advice or other expert assistance isrequired, the services of a competent professional should be sought.
Published by Greenleaf Book Group Press Austin, Texas www.gbgpress.com
Copyright ©2017 Michael Gale and Chris AaronsAll rights reserved.
Thank you for purchasing an authorized edition of this book and for complying with copyright law.No part of this book may be reproduced, store in a retrieval system, or transmit by any means,electronic, mechanical, photocopying, recording, or otherwise, without written permission from thecopyright holder.
Distributed by Greenleaf Book Group
For ordering information or special discounts for bulk purchases, please contact Greenleaf BookGroup at PO Box 91869, Austin, TX 78709, 512.891.6100.
Design and composition by Greenleaf Book Group and Sheila Parr Cover design by Greenleaf Book Group and Sheila Parr Backside jacket artwork by Zach Layton
Cataloging-in-Publication data is available.Print ISBN: 978-1-62634-464-8
eBook ISBN: 978-1-62634-465-5
Part of the Tree Neutral® program, which offsets the number of trees consumed in the production andprinting of this book by taking proactive steps, such as planting trees in direct proportion to thenumber of trees used: www.treeneutral.com
Printed in the United States of America on acid-free paper
17 18 19 20 21 22 10 9 8 7 6 5 4 3 2 1First Edition
To Lara, Wendi, Sam and Jack, and the kids, thank you for the support,energy, reviews, and love.
CONTENTS
Preface
Foreword
Introduction: Digital Transformation and the Digital Helix: A Primer
PART 1: THE NEW DIGITAL WORLD WE LIVE IN
Chapter 1: To Thrive with Digital, You Have to Understand the Past andLook to the Future
Chapter 2: Tradition Is the Illusion of Permanence
PART 2: HOW DIGITAL THINKING CHANGES YOUR ACTIONSAND RESULTS
Chapter 3: Seven Drivers that Will Help You Escape the Old World
Chapter 4: The Tao of Getting Digital Done Right and OvercomingOurselves
Chapter 5: Diving Deep into the Seven Challenges to DigitalTransformation
Chapter 6: Small Steps Equal Giant Leaps
PART 3: THE DIGITAL FRAMEWORK FOR SUCCESS
Chapter 7: The Digital Helix: An Introduction
Chapter 8: Executives as Digital Helix Explorers
Chapter 9: Themes and Streams for Insights in the Digital Helix
Chapter 10: Customers Have Experiential Portfolios
Chapter 11: Marketing and Communications as a Flow
Chapter 12: Sales Are Connected Moments
Chapter 13: Everyone Together, All the Time
Chapter 14: In the Moment and One Step Ahead Always
Chapter 15: Building Optimal Mindset and Culture
Chapter 16: Over The Horizon to a Brave New World, for Some of Us
Chapter 17: The Next Steps for You
Afterword
Acknowledgments
Notes
Index
About the Authors
PREFACE
This is the very last page we wrote for the book, but we think it is thefirst one you should read.
You have probably heard, read, or talked a lot about the idea of digitaltransformation, both inside and outside of your organization. Like otherbusiness and management ideas and terms, digital transformation may feeltransient or hip, and you may think it will morph or converge into thegeneral landscape of terms. While the phrase might have different meaningsand connotations to you right now, you should recognize that digitallytransforming is different from just adopting a digital view or adding digitaltechnologies. This “trend” is now the foundation of how we change ourthinking and behavior at the organizational and individual level. This begsthe questions, Why should we care about digital transformation, and whynow?
Answering these questions is critical to digital success. Thriving withdigital transformation is about discovering, building, and even recreatingthe best DNA version of your organization. This requires a robustdiscussion about where you are and where you can go. It is about seeinghow new ideas and processes can work together in a manner that mightsound contradictory to many tried and tested historical approaches. It isabout harnessing the immense promise and potential of technology bychanging how your organization thinks and functions at all levels. It is alsoabout giving customers and digital citizens what they want, even beforethey know they want it. Ultimately, it is about enabling individuals andorganizations to reach their fullest potentials, now and in the future, bybehaving and organizing in different ways.
We have all seen and experienced a significant amount of change inbusiness in just the past decade or so. With Web 1.0, we were given thepromise of access and speed to existing businesses or even new businessmodels. With Web 2.0, we saw the ability to connect organizationalelements together and deliver more. But digital transformation is different.
Whether it is Web 3.0, 4.0, or even 5.0, digital transformation enables youto be ready for these changes and many others as they come. It is the engineand the underpinnings that enable us to realize our full potential whileproviding exponential benefits and value to adjust and win in markets andworlds yet to be defined. Your only barrier is creating the rightorganizational DNA to unleash and maximize its capabilities.
Digital is here and transforming the world around us in new and fasterways than before. Therefore, we must recognize and embrace thesechanging moments or we will be overcome and left behind in this newworld. The question is, Are you and your organization set up and equippedto thrive and reach your full potential or possibly even overachieve in thedigital age?
This book is designed to give you the insights, frameworks, and storiesto identify where you are and where you need to go. We have also includedthe tools to architect, design, and build the DNA needed to thrive withdigital transformation, no matter where you are today. Enjoy the journey.
I
FOREWORD
THE END IS NEAR
f you remember nothing else from this book, remember this: The end isnear. Now that I have your attention, let me explain. The full quote
comes not from some deluded prophet of the impending apocalypse but,rather, from none other than the capo di tutt’i capi of Forbes Global 2000CEOs, Jack Welch, former CEO of GE. Welch says, “When the rate ofchange outside the company is greater than the rate of change inside, theend is near.”
The words, like a catchy song you might randomly hear on your Spotifyplaylist, began to play in an endless loop in my brain. It gets to the heart ofthe matter of this book: Digital transformation is both necessary and hard.Please pause for a minute to ask yourself where your business falls in thisdialectic.
Yes, “digital transformation” may be one of the most overusedbuzzwords of all time, but this is one of those rare moments when the hypeclosely matches reality. For many firms thought to be the leaders of ourindustrial and information economies, these will be trying times. Many willfail—many more, perhaps, than you think. Consider this: It took Amazontwenty-one years to pass Walmart in market value. It took fourteen years forTesla to pass GM and seven years for Uber to pass Tesla. That’s the powerof exponential growth in the digital era. What separates winners fromlosers? Certainly, leadership plays a central role.
In my role at Forbes Media, I have the good fortune and honor to meetpersonally with, write about, and conduct research among many hundredsof corporate leaders and entrepreneurs around the globe. Each is, to agreater or lesser degree, leveraging Welch’s dictum, and the parallels
between those experiences and what I learned from reading The DigitalHelix are striking.
Two cases in point: John Chambers, the legendary CEO (now ExecutiveChairman) of Cisco, successfully led the company through what he refers toas “five or six” transformational changes in networking technology thathelped him create the vision and culture that would drive Cisco from $70million in revenue when he took the CEO role to today’s nearly $50 billion.His strategy: Identify the transitions in technology early and then lean intothe change with all you’ve got. Much of that strategy took the form ofacquisitions, some 180 during his tenure, and Chambers was the master ofM&A.
Chambers, who is one of the most personable and humble—yetrelentless—CEOs I’ve ever met, is quick to admit his failures as well (likeFlip, which turned out to be a $590 million mistake. Oops!) and says thisabout transformation, “You’ve got to think exponentially. Not literally, likewe were all trained. We were trained to be 3 to 5 percent better. And thenyou’ve got to also think about how you position your company for themarket and business transitions coming at you at a faster and faster speed.“I’ve been successful in my career when I focused on market transitions,and when a transition occurs, you focus on the transition, not yourcompetitor. If you focus on competitors, you’re looking backwards. Soundseasy, but it’s really hard to do,” says Chambers.
Only three years into his role as CEO of Microsoft, when I met him atthe company’s Redmond, Washington, campus, Satya Nadella hadtransformed the company culture to prepare it for a future of what hetermed “ubiquitous computing and ambient intelligence,” a reference to hisstrategy to tightly weave Office365, Azure cloud, devices, and artificialintelligence initiatives into one seamless platform. The strategy required thecompany to break down the silos between business units and to change theculture from what Nadella says was one of “know it all” to “learn it all.”Exponential change requires new ways of thinking and leading. Chambers’scharisma and Nadella’s guru-like persona show us that successful digitaltransformation is first and foremost about change management and culturalchange led by example from the top of the organization.
What’s your playbook for managing exponential change? It can’t comefrom expecting that the rate of change will continue at the same pace youhave experienced to date. In Tim Urban’s brilliantly funny and insightful
essay “The AI Revolution,” he writes, “[Futurist Ray] Kurzweil points outthat his phone is about a millionth the size of, a millionth the price of, and athousand times more powerful than his MIT computer was forty years ago.Good luck trying to figure out where a comparable future advancement incomputing would leave us, let alone one far, far more extreme, since theprogress grows exponentially.”
In today’s digital economy, some organizations succeed by adapting todisruptive threats, moving quickly into new markets, attracting the besttalent, and maintaining highly regarded brands. Others struggle. They seemarket share drain away to upstarts; they respond too slowly to marketshifts and suffer employee attrition. They get bogged down in outdatedprocesses and systems.
What separates the winners from the losers in a rapidly changingenvironment, and why are some enterprises rapidly adopting digitally savvypractices and seeing results while others seem decades behind? The nextseveral years will be shaped by the fourth industrial revolution: a new erabrought about by technologies such as the Internet of Things, cognitivecomputing, artificial intelligence, and robotics. For some companies, thetransition between the third and fourth revolution is already under way—while others are just beginning to test the waters.
Recent research from Forbes Insights shows that nearly all (93 percent)of Forbes Global 2000 CEOs are undergoing digital transformation. Yet lessthan half say that their organizations have the capabilities or skills tonavigate the change. Other Forbes research tells us that 69 percent of CEOsglobally acknowledge that they are concerned about their ability to handleunknown and unforeseen issues. Much of this concern is due to newtechnologies: 85 percent of these CEOs also cite concern about integratingautomated business processes with artificial intelligence and cognitiveprocesses into their present business models.
As my friend, Forbes colleague, and best-selling author Rich Kardgaardputs it, “Digital technology changes everything. . . . [It] is like a death star.First, it pulls your industry, company and career into its orbit. Then it wipesout your old, tired (but nicely profitable) business model. Then it imposesits own laws on how you must run your business. Transform, or you die.Play by the digital rules, or you die. Not just one time, but again and again.”
The timing for this book is especially prescient. Next year represents thefiftieth anniversary of the publication of the seminal book The Double
Helix, by James D. Watson, half of the Nobel Prize–winning duo of Watsonand Francis Crick, who brought the term DNA into our everyday lexicon.
Michael Gale and Chris Aarons have brilliantly morphed the descriptionof the helix structure of how our DNA is designed and replicated into ananalogy for the structure of the modern, digital-first organization, and thebook you’re holding serves as the definitive navigation chart to thetreacherous waters of digital transformation. It may also come as nosurprise that the forces of change outlined in the book were first brought tolight by the Austrian-born economist Joseph Schumpeter. According toSchumpeter, the “gale of creative destruction” describes the “process ofindustrial mutation that incessantly revolutionizes the economic structurefrom within, incessantly destroying the old one, incessantly creating a newone.” This year marks the seventy-fifth anniversary of the publication ofSchumpeter’s book Capitalism, Socialism and Democracy, where the termcreative destruction first came to light in 1942.
It’s also telling that The Digital Helix brings to life through research andreal-world anecdotes the seven characteristics of a successful digitalorganization. According to numerology (not that one believes in suchthings!), the number seven is the seeker, the thinker, the searcher of truth.The seven doesn’t take anything at face value; it is always trying tounderstand the underlying, hidden truths.
Perhaps your firm is struggling to compete against digital-nativeupstarts. The good news for you is at that it’s not too late to leapfrog thecompetition and turn size and scale to your advantage. It only takes sevensteps.
Bruce Rogers Chief Insights Officer,
Forbes
M
INTRODUCTION
DIGITAL TRANSFORMATION AND THEDIGITAL HELIX: A PRIMER
ore than 80 percent of organizations are attempting to digitallytransform1 the way they operate in the twenty-first century as they
try to take advantage of the digital DNA that drives success in high-growthorganizations. Research, however, shows how tough digital transformationscan be, with fewer than one in six organizations truly succeeding in theirvision. To yield the true promise of digital, organizations must change thefundamentals of how they think, act, and behave. This book is designed toshow you the pathways to digital success with insights and practices basedon primary research and interviews with digital leaders across commercialand government organizations. At the heart of everything is the DigitalHelix framework and its seven components for success. Through the DigitalHelix, we offer the intelligence, frameworks, and structures essential forbuilding an effective digital organization that can thrive in today’shypercompetitive world.
People are working harder and putting in longer hours than anytimeduring the past fifty years. Rarely do any of us start working at eight a.m. orstop at five p.m. Technology has created a near-perfect and level playingfield for customers and citizens to want to interact with brands andorganizations in their own ways on a 24/7, 365-days-a-year basis.Technology may have opened this window to the new way of working, butdigital transformations now drive the very underpinnings of howorganizations restructure themselves to handle, manage, and hopefullythrive in this new world. In fact, digital transformations are now the engines
to deliver startup-like agility to more established organizations. This bookseeks to handle a deeper understanding of what the DNA for successfuldigital transformation looks like. It does not explore the technologies youmight apply to help drive your digital transformation, especially becausethere is no one-size-fits-all approach. It is designed to give you the bestopportunity to be successful by explaining the questions, insights,interactions, behaviors, and triggers that are driving performance fororganizations digitally transforming themselves to thrive in this digital-firstworld. Developing these skills at the individual and organizational levelsrequires a new way of thinking through challenges and opportunities.
“We would not be discussing digital transformation with theintensity, fever, or bandwidth that we are were it not for the factthat digital represents and offers a completely different portfolio ofeconomics. Digital makes the expensive cheap and changes thetime-consuming to real time. For me, digital transformation is atechnical phrase or label for what is really an economictransformation. We are interested in digital because its economicsare different from the physical and different from the analog.”—Michael Schrage, research fellow at MIT Sloan School’s
Initiative on the Digital Economy, oversees research ondigital experimentation and network effects, and is author ofThe Innovator’s Hypothesis
To help you get a better handle on the what, the why, and mostimportantly, the how of digital transformation, we have split this book intothree parts:
An overview of the digital landscape with identification of challengesand drivers
The new thinking and the Digital Helix framework to help you drivesuccessful transformations
A discussion of the right processes, mindset, and culture that areimperative for thriving with digital transformation
The first part of this book covers the underlying tensions andopportunities presented by a world rapidly becoming digital. Rather thanfocus on infrastructure, this section is about the experiences we need tosolve problems in this new digital world. A large portion of this sectionhelps break down the challenges and drivers of digital transformation. Ourresearch and experience have shown that identifying the drivers andovercoming the challenges is a key differentiator in truly achieving digitalresults.
The second part, and main bulk of the book, takes a detailed look athow digital leaders and winners are using new thinking, behavior, andmeasurement to act in new ways. A cornerstone of this approach is using anew framework we have titled the Digital Helix. It integrates all parts of theorganization across sales, marketing, communications, product design,customer service, and human resources to make digital transformation farbetter than the sum of its parts. This comprehensive structure provides theperspectives and tools needed to use digital to outmaneuver the competitionacross seven key areas that will transform the business:
1. Leveraging leadership’s daily role as an explorer
2. Using digital to inform the organization and help listen in newdimensions for ideas and feedback
3. Understanding that customers have connected portfolios of experiencesthat drive a different compass for how we respond and interact as anorganization
4. Using marketing and communications as two conjoined functions todeliver real value across each customer touch point
5. Transitioning sales from simple relationship or transactional selling tofocus on the key moments that matter to your customers
6. Focusing on how all parts of the digital organization need to interact andwork together to fuel every customer interaction with insights and in turnmake the organization smarter
7. Using all digital information and insights to simultaneously build betterexperiences and products
The work world of digitally transformed organizations should feelexciting and intriguing because these organizations will become theplatforms for future organizations. The more we talked and worked withthese digital leaders, the more energized and optimistic they were about thepossibilities.
“The delightful part about digital is that if done right, it actuallygets people to tell us who they are and what they’re looking for.Organizations can get an actual understanding of what their needsor aspirations are, enabling every business to be much morerelevant in their engagement with customers. When that starts tohappen, people get excited because you actually see the peopleyou’re trying to reach and serve as they are. And it makes a hugedifference. But for this to happen, the rate and pace of the adoptionof digital for everyone has to happen quickly and in the right wayto act on and harness this new power. Principally, mostorganizations have a skills and mindset gap with the amount ofprocess change, tooling, and data that is being put into place. I’mconvinced that the future of digital is going to change so manythings. And we can’t wait. Most people are just as anxious as I amto get to that future.”—Jon Iwata, senior vice president, marketing and
communications, IBM
Finally, in the third section of the book we look at three interestingcomponents for highly successful organizations undergoing the digitaltransformation process:
1. The optimal mindset for delivering high performance in any organization
2. The cultural imperatives for a very different corporate world
3. The future state of Digital Helix organizations
A discussion about how to get each employee to have the right mindsetskills to handle this new, digitally transformed world might sound out ofcontext for a business book. However, as Michael Schrage told us, digitallytransformed organizations are fundamentally different from their forebears.
Digitally transformed organizations, even those in government, relyincreasingly on the skills, mindsets, and cultures of their organizations todefine success. Technology is abundant everywhere and capital is generallyavailable at low costs, so tried-and-true growth options no longer can be theonly way to drive success. Given the speed and effectiveness of howdigitally transformed organizations work, we need to enable people todevelop specific and different skill sets. Being more flexible with purposeand managing new and constantly changing information creates pressuresnot unlike those professional athletes confront. Our research and extensiveinterviews with executives and senior practitioners in the digitaltransformation process revealed that digital leaders think differently abouthigh performance. In successful digital organizations, pushing theperformance envelope, rewarding high performance, and learning how toinvest in “optimal” mindsets are all critical parts needed to drive and sustaindigital changes.
“Overall, starting with a feeling of optimism promotes hope andoverrides any other sentiments in your work. What would happenif all your employees felt different about coming to work? Therewould be a different buzz about the building. There would be adifferent outlook that would help people look forward to what’snext and what’s coming up. This optimism and hope creates anenvironment that inspires people to seek out their best and findlevels of performance that maybe before they never thought wereattainable. Starting with this whole new and different chemistry,any workplace is far better suited to achieve its goals and be itsbest, even in times of difficulty or adversity.”—Pete Carroll, head coach, the Super Bowl Champion Seattle
Seahawks
The final piece of this section looks at the future state of the DigitalHelix organization ten to twenty years from now. As we have seen, digitalis moving fast and changing organizations rapidly. Leaders must not onlyrecognize the steps and actions they need to take now to thrive with digital,but they must also be able to see and adapt to what the future holds for thisdynamic world we live in.
Throughout this book, we have provided research, insights, interviews,and perspectives to help frame the topics and issues and to provide the toolsneeded to aid you and your organization in delivering real results withdigital. We have also added numerous charts, frameworks, and guides tovisually show the key elements of digital transformation. The insightsshared throughout this book will help you navigate the process of shiftingfrom being just a business doing digital to becoming a true successfuldigital business now and in the future.
PART 1
THE NEW DIGITAL WORLD WE LIVE IN
T
CHAPTER 1
TO THRIVE WITH DIGITAL, YOU HAVETO UNDERSTAND THE PAST AND
LOOK TO THE FUTURE
“It is a paradoxical but profoundly true and important principle of life thatthe most likely way to reach a goal is to be aiming not at that goal itself but
at some more ambitious goal beyond it.”—Arnold Toynbee
hough Toynbee had this revelation well over a century ago, this samesentiment could apply to how most executives view the opportunities
in the age of digital transformation that we live in now. The nature of digitaltransformation is pervasive, with more than eight in ten executives focusingtheir organizations toward its promise.1 Yet far fewer of them are able todefine what the term “digital transformation” means. Maybe the same wastrue during the Industrial Revolution when humans tried to define what theywere experiencing.
In reality, revolutions are often poorly understood until they touch manypeople or some defining model explains the what, the why, and mostimportantly, the how. There is significant evidence that many leaders arenow trying to ramp up digital transformations in their organizations. In fact,the term “digital transformation” is now a common banner thatorganizational leaders stand beneath when trying to rally the troops or
investors. Many times, their approach is little more than project-focusedattempts at digital marketing, using technology to improve businessoutcomes, or changing an isolated ecosystem in an organization. You maybe experiencing similar efforts in your own organization, with digital beingtouted to improve sales, marketing, customer retention, internalcommunications, real-time feedback, and more. These attempts are usuallynot true digital transformations. They are at best business improvementsthat fall far short of using digital to transform how your organizationfunctions and of delivering future value to your customers.
“We’re trying to be both digital on the outside as well as digital onthe inside and focus our investments on what the member willexperience. We’re being very intentional about how we make theright investments to digitize our business, to drive a digitaltransformation that manages the benefit to both our members andour internal teams that support them. Our ability to deliverexceptional, differentiated, highly personalized experiences to ourmembers will be as much about how digital we are on the back endas it is on what the members can see and do on the front end.”—Chris Cox, head, Digital Experience Delivery, USAA
Research, both ours and others’, shows that the vast majority oforganizations that are blazing ahead without a clear road map for successare experiencing suboptimal results from their investments as they gothrough their own digital transformation journeys. In fact, the basicchallenges and the underlying assumptions about our businesses in thisdigital-first era are fundamentally changing. These changes are as profoundas the Industrial Revolution that changed the world some 270 years ago.Like then, there will be a few Luddites who resist the shift. Those whochoose not to move forward will ultimately fall by the wayside.
“In my professional experience, the most useful way of thinkingabout digital transformation is that the economics of digitaltechnologies and platforms become the organizing principle aroundwhich business model and business process as well as valuecreation decisions get made.”
—Michael Schrage, research fellow at MIT Sloan School’sInitiative on the Digital Economy, oversees research ondigital experimentation and network effects, and is author ofThe Innovator’s Hypothesis
The speed of change, the volume of insights, and the capacity to disruptmarket and organization economic models in a few moments are moreextreme than at any time before. If Adam Smith, the father of economicsand author of An Inquiry into the Nature and Causes of the Wealth ofNations, could observe the digital transformations we are undergoing now,one wonders how he would redefine the invisible hand of market dynamics.These dynamics are enabled not just through labor cost reduction but alsoby digital innovations that are transforming the way we listen, design,deliver, and interact with each other and our customers. Amazon MachineLearning, Omniture, and Salesforce are all living examples of digitaltransformation systems today.
If you think digital doesn’t have the potential to change business, youhave not been looking around. There are examples, both large and small,from all over the planet where digital revolutions are changing markets andopportunities. One of the best examples is a program in Uganda calledAfriGal Tech, which is run by four young women who are trying to improvethe process of diagnosing sickle cell anemia, an ailment that kills 80 percentof those afflicted with the disease before they reach the age of five. In mostparts of the world, this disease is manageable, but in Uganda, too fewhospitals (only three hundred for 37.8 million people within seventy-sevenmillion square miles) and the prohibitive cost of testing make it deadly. Byusing cell phones with small and inexpensive cameras to diagnose thedisease at the touch of a button, these young women have found an easy andcost-effective solution.
This example shows the power of the digital transformation we areliving in. Not only does it change the way we think, act, and collaborate,but it will also intensify both opportunities and threats we will face fromcompetitors. If four young women in Uganda can solve a deadly problemby using inexpensive digital technology, then digital transformation beingdone by small and large businesses across the globe surely can drasticallychange every facet of marketing, communications, sales, productdevelopment, and customer service in more ways than we can imagine.
Almost all the evidence and research we have seen and done ourselvesshows how digital transformation too often focuses on only a few initiativesand lacks ambition to go beyond the mere goal of doing something digital.In fact, most organizations miss the mark of becoming truly digital in natureand thus fail to deliver the benefits promised. Yes, organizations need tostart somewhere. But digital, if done correctly and in a prevalent way, cannot only deliver the benefits expected but also exponentially change the “artof the possible” for businesses and consumers. Now is the time to grab onto the right digital opportunities or risk playing catch-up with the newdigital leaders later.
What can organizations do to be digital and gain real competitiveadvantages? To thrive now and in the future, everyone in the organizationhas to realize that bringing about a digital revolution in your world requiresmuch more than only taking small steps. Organizations need to focus on aset of principles and practices that underlie the nature of that change.
We saw a similar phenomenon when we first researched how to winwith social technology and created the Social Media Accelerator with theEconomist Intelligence Unit in 2012 to pinpoint the best practices ofleaders. Digging in deeper and looking through 170-plus variables and morethan a thousand case studies in our social research showed some distinctivepatterns. These patterns clarified how some succeeded while others did not.
“Social is a catalyst for digital transformation in that the rest of theworld is becoming increasingly social, and because of those socialinteractions, is putting demands on companies to go through adigital transformation.”—Charlene Li, principal analyst, Altimeter, a Prophet
company
The Social Media Accelerator research showed that more than 85percent of Fortune-level executives believe in the potential power of socialengagement. But as with digital transformation, barely 14 percent (whomwe termed “Thrivers”) were garnering any form of real economic returns.This lack of result includes not seeing gains in key variables, such asmanaging and recruiting human capital, sales, margins, new productdevelopment, and even much softer variables such as brand equity. Afteranother wave of social research in 2013 with three times as many
respondents, we saw the Thrivers category marginally grow from 14percent to 16 percent.
All our research projects have shown that the Thrivers were achievingtransformative success because they understood the nature of digital andfound a way to architect for success. Interestingly enough, theseorganizations were relatively evenly spread across all segments and sectors,including both regulated and nonregulated industries, as well asmanufacturing, retail, health care, and both B2C and B2B. This clearlyshows us that success is not driven by industry, but by you and yourorganization.
To that end, this book isn’t a rallying cry for digital transformation.Most organizations understand why they need to be digital or move beyondone or two isolated digital transformation projects to become a fullydigitally transformed business. Rather, the data and extensive work in thefield show that most organizations simply need frameworks to guide themtoward winning with digital now. Thus, we have chosen to focus on thisdeeper approach, and we view this book as the keystone of an integratedsupport system that will show you not only why but also how to leveragethe delivery of digital transformation to achieve greater results for yourorganization.
To succeed, leaders need to make sure all their digital investments worktogether and deliver value that is measurable and greater than the sum oftheir parts. This phrase, “greater than the sum of their parts,” is one we willuse often, as it describes the true exponential value you should seek fromyour digital transformation efforts. Not viewing your efforts this wayusually leads to the worst failure in digital transformation, investing inisolation (for example, adding Salesforce or similar digital solutions, butnot changing other dependent areas in the organization that could andshould be connected to that investment). Investing in isolation defocuses theorganization and usually leads to chasing what is next rather than elevatingthe organization to the task of using digital to solve customer problems andact competitively.
Connecting these investments is vital and cannot be understated. AdamSmith’s pin theory, the division of labor, showed that the focused divisionof connected labor in one system was far more powerful than the same sumof individual craftsmen working in one place, each trying to make the sameproduct. As in the Industrial Age, the Age of Digital Transformation needs
a framework for defining and driving success through key functions androles inside the corporation. Organizations need to understand how peopleand teams working together in an interdependent way with the tools andinformation needed is the only way to win as you go through the journey tofull digital transformation.
“Digital transformation requires that we change the waytechnology organizations connect with the rest of the enterprise.We can no longer think of the technology organization as if it werean arms-length contractor, separate from something called ‘thebusiness.’ On the contrary, we have to imagine IT and the rest ofthe business as a single organism, developing hypotheses together,experimenting together, and learning together.”—Mark Schwartz, chief information officer, US Citizenship
and Immigration Services
Do Not Fall into the Trap of Digital WrappingDigital today is much like the green revolutions of the past decade. Manycompanies jumped on the bandwagon to make products, services, andbusinesses that were environmentally friendly, or “green.” In truth, most ofthe initial work by brands in this area was cynically seen as “greenwashing”(when a company or organization spends more time and money claiming tobe “green” through advertising and marketing than implementing businesspractices that minimize environmental impact). Brands such as Ecolab,Whole Foods, and others that are truly green from the ground up paved theway for a genuine recognition across industries of the attainable premium tobe found and the need for companies to deliver portfolios of new productsand services as consumers became more environmentally conscious. We areseeing the same phenomenon with digital transformation today.
“This is a vulgar example of digital done wrong when anorganization gives their sales team an iPad to interact withcustomers. This kind of thinking completely misses the point. Allthese types of things that add digital flavor, digital spice, or a
digital emphasis, without organizing, cohering, uniting, or buildingcongruent digitally oriented strategy are bound to fail.”—Michael Schrage, research fellow at MIT Sloan School’s
Initiative on the Digital Economy, oversees research ondigital experimentation and network effects, and is author ofThe Innovator’s Hypothesis
Thriving Requires Digital Transformation toDeliver Value Far Greater Than the Sum of ItsPartsDigital should allow all of us to have a far more fluid and real-timeapproach to market opportunities, as well as to human capital, innovation,marketing, communication, and selling. The fluidity of digital should evenextend to new product development and governmental services. The key iseffectively tying these areas together and at the same time delivering a moreambitious view of the world. We cannot use a checkbook to buy our waysuccessfully through the digital landscape. Successful organizationsunderstand the need to continuously architect for digital in new, innovativeways.
This new structure also requires a different way of thinking about howwe apply our resources. Great companies, like great nations, understand thattransformation needs not only change their resource allocation but shouldalso impact architecture, attitudes, mindsets, and the habits of the peopleand the organization. These aspects are often the most challenging tochange because individual and group dynamics slow or impede theprogress. As Jim Collins, author of Good to Great: Why Some CompaniesMake the Leap . . . and Others Don’t, states, “Greatness is not a function ofcircumstance. Greatness, it turns out, is largely a matter of conscious choiceand discipline.”2 This is true for digital transformation.
From the lowest to the highest levels of organizations, there is interest,passion, and desire for digital transformation. In the vast majority of cases,the missing piece is having a practical framework and playbook for puttingit all together and getting it right. Although we do not pretend this book isthe pin theory for the Digital Age, the interviews, research, frameworks,
and other tools provided will enable you to be far more like the 16 percentof Thrivers who are on the right path toward digital transformation than themajority who are struggling.
Each section of the book will give you the information needed topromote the right thinking internally. The chapters will also provide youwith the frameworks needed to identify how to do digital right in yourorganization. Together, using the digital transformation field guides and theseven key components, which we call the Digital Helix, we will describeand illustrate the solid building blocks that will be the most useful on yourjourney to do digital right. Now, begin to think about what part of your pastcan help you learn what it takes to succeed and thrive with digitaltransformation.
To further help you in the process, we will be augmenting the book witha set of Web tools and digital versions of the field guides on our website. Tokeep up and begin taking your first steps toward thriving now with digitaltransformation, please visit our website and ongoing blog atTheDigitalHelix.com.
I
CHAPTER 2
TRADITION IS THE ILLUSION OFPERMANENCE
“There is nothing more difficult to take in hand, more perilous to conduct,or more uncertain in its success, than to take the lead in the introduction of
a new order of things.”—Niccolò Machiavelli, The Prince
n 1760, China was the largest economy because for centuries the worldwas dominated by agrarian practices. Within thirty years, Great Britain
became the largest economy. With a population of eight million, GreatBritain was about a fourth as large as China, yet it became infinitely morerelevant and dominant in such a short time. Something radical occurred forthis shift to happen—the Industrial Revolution. Take a moment and thinkabout your organization as it is right now. Is it built more like the old China,where size and traditional market presence mattered, or is it similar to GreatBritain, a feisty and unusual upstart unafraid to push new boundaries?
“And both Britain and the world knew that the IndustrialRevolution . . . by and through, the traders and entrepreneurs,whose only law was to buy in the cheapest market and sell withoutrestriction in the dearest, was transforming the world. Nothingcould stand in its way. The gods and kings of the past were
powerless before the businessmen and steam-engines of thepresent.”1
—Eric Hobsbawm, author of The Age of Revolution
Most leaders would agree that the digital era we are now in is the startof the next Industrial Revolution and has the power to transform economicmarkets and even reorganize the brands and organizations we manage. Likethe steam engine, spinning jenny, and other advancements that triggered thediffering cadence and velocity of each stage of the Industrial Revolution,we have to recognize that Web 1.0, Web 2.0, and the growing economyaround the Internet of Things are set to bring upheaval to this version of theindustrial and increasingly digital age. You might find this comparison to beludicrous or even extreme in nature. But the fact remains that now is thetime not only to get a jump on the digital revolution but also to identify howyour organization can succeed in the long term.
The traditional definition of an economic revolution is rapid, sustained,and significant elevation in productivity, consumption, and economicgrowth. These economic elements spread across borders and change thenature of trade and even the constructs of national security as theyholistically alter business, technology, and even personal landscapes of thetime. Think about this definition and what you are seeing now at bothmarket and organizational levels in your market as well as in the worldeconomy.
Across the board, massive changes in technology are changing thenature of trade and how we live and play every day. Although there aresimilarities between the Digital and Industrial Revolutions, the currentversion of this new Digital Revolution will not take thirty years. Thisrevolution is already producing radical shifts in business and starting tocreate new winners, often in less than a few years. Take for example thefashion industry, where designs can be shown and tested not just on therunway but also with real-time social feedback from around the globe.Dresses can now be custom ordered via the Web and delivered in hoursinstead of weeks to virtually anywhere in the world. Mass customizationcombined with almost complete compression of supply and demand iscreating a totally different growth dynamic for new companies anddesigners that can break the monopolies of far older traditional brands. Thistype of phenomenon is happening in almost every industry.
Digital Transformation PerspectivesWhat’s driving marketers and product managers who are really trying tofigure out how to serve their customers? It is mass customization. Theproblem is most brands still don’t truly think about the back end and theimplications on the manufacturing floor to make it profitable. To get theprocess right, they need a thoughtful and well-designed system fromcustomer insights through the supply chain all the way to the factory itself.Each aspect of the supply chain must be tied together with technology tokeep it running smoothly.
So how much of this is systems, people, and processes? The best brandshave a combination of digital, creating the pipes to get information to thefactory efficiently, on demand, and in real time. These companies also havethe analog for setting up the supply chain in the factory itself in a new waythat produces differently so that they can profitably run a high-variable,high-variety product and respond quickly no matter the demand. Half ofNike.com’s total revenue per day right now comes from customized productsales, according to Jud Barr, president of JTB Consulting, who works withnumerous leading manufacturers on sales, operations, and masscustomization. Nike expects customization to be a $1 billion business. AsJud says,“The marketplace has changed with digital. Customers want quickresponses, fast delivery, and almost endless choice that includes being ableto tailor the product to meet their specific needs. These new digitalcustomers don’t want to buy a homogenous product that everybody elsehas. And we are only in the early stages of this mass customization. Rightnow, it’s still really about decoration, where the customer can choose colorsand personalize it. But we’re quickly moving into a new era where almostanyone can create products and serve them up in a way that allows thecustomer to functionally ‘build’ what they want and adjust specific featuresso that it suits their exact application.”
With new examples occurring daily, this revolution is taking full shape.Leaders are moving toward digital while struggling to understand itsdirection and potential impact to their businesses. The call to action formost is to make things digital and help their organizations reap the benefits.However, recent surveys show less than 20 percent of leaders can explain orshow what digital really means. Most have attempted to do digital—anything via software purchases, technology transformations, marketingexperiments, or just plain tinkering. The results have been predictable; there
are a few winners with real results and many others struggling to figure outhow to take advantage of the magnitude of changes we see in the world. Nomatter the function—executive, marketing, product development, sales,communications, customer service, support, design, or any other—there isno natural progression here where most organizations would be able to seereal results that transform the business or the market.
“It’s not the traditional competitors who worry us. It’s the newones we don’t even know about who force us to keep lookingahead. Digital innovation can turn an entire industry on its earvirtually overnight, so it’s critical to keep pace. There’s no moreentitlement of any kind because of company heritage or brandloyalty. Digital capabilities have changed everything about howconsumers want to engage with businesses, in both B-to-C and B-to-B. Companies that survive will continue to prove themselvesevery day to consumers. That’s the challenge, and the opportunity,that digital brings. We’ve got to continue to weave digital intoeverything we do, to stay ahead of competitors and to serve clientsin new, innovative, and creative ways.”—Mona Charif, senior vice president and chief marketing
officer, NTT DATA Services
To get the gains that most see as possible and stay ahead of yourcompetition, you must change the way you think about your business andabout digital within your organization. Yes, getting 5 percent, 10 percent, oreven 15 percent positive change within a function is great. But if theorganization is not reimagined, you wind up with slices of improvementsthat tend to show more problems to be chased rather than truly transformingthe business and moving toward the right solution. With the businesschasing these problems, the organization becomes defocused and pushesyou farther away from what is possible with digital transformation.
Without a full digital transformation strategy in place, organizations aredoomed to repeat the mistakes of the past. In the Industrial Revolution,many tried to add steam engines to sailing ships with the expectation thatthey would deliver comparable benefits to a purpose-built steamship. For awhile this was true, but eventually these ships could not deliver becausethey were neither engineered for the new speed requirements nor had the
storage capacity of ships designed to use steam to transform shipping.Steamships have existed since 1813, yet by 1849, the clipper ship wasessentially dead. With the opening of the Suez Canal came the need forvastly superior load-carrying, range, and speed capabilities to open newmarkets. Doesn’t that sound like the Digital Age we live in now withmobile, the Internet of Things, customer personalization, and other digitaladvances?
“A company that gets digital right is a company built for thefuture.”—Jon Iwata, senior vice president, marketing and
communications, IBM
The owners of sailing ships who put steam engines into their adjustedwooden hulls made the mistake of attempting to bridge the gap rather thantransform the whole. History has shown us time and time again that acomplete transformation is essential to getting the results needed and toprovide the potential to win in the new age. Many shipping companiesrecognized the need for full transformation and have succeeded. Those thatdid not failed and went away. As Charles Darwin once said, “It is not thestrongest or the most intelligent who will survive, but those who can bestmanage change.”
Volume and Choice Change the DynamicsTraditional leaders must change the way they contextualize the world.Current market share may still be one of the strongest indicators of brandstrength even in an age of digital transformation. However, the capacity toadjust and adapt may end up being a far better metric as the world changesfundamentally around us. Think of it this way: Between 1955 and 2011, 87percent of companies previously categorized as Fortune 500 went out ofbusiness. Giants come and go, and now this process is going to happen evenfaster. In 1958, the average lifespan of a company on the Forbes rankingswas more than fifty-five years. It is estimated that by 2018 this average willdrop to fewer than fifteen years. Many of the new entrants on the Forbeslist for 2020 and beyond are being created right now. Imagine how
vulnerable your brand could be if a competitor, or perhaps a new company,was able to leverage all the benefits that digital transformation providestwice as fast as you could.
“Digital first” is the new lens for success and how we should viewopportunities or threats presented. The profusion of choice will and haschanged the way people think, what they will and will not tolerate, and howthey make decisions—not just as consumers, but as businesses, workers,and parents. Consider some of these facts as you build your own twenty-first-century versions of steamships for digital transformation:
Everyday Interactions Are Now IncreasinglyDigital
73 percent of job applications are successfully filled through the usesof social media.2
61 percent of Internet users regularly bank online, and 35 percent ofcell phone owners use mobile banking.3
95 percent of people in a recent survey say they plan to use businesscommunication tools instead of in-person meetings.4
39 percent of people spend more time socializing on social media thanthey do face-to-face.5
E-commerce Will Continue to Grow and ShapeMarkets for all Sectors
90 percent of e-commerce transactions are business to business(B2B).6
Approximately 23 percent of disposable income worldwide is spentonline.7
80 percent of life insurance purchases start online, and 16.4 millionpeople compare plans and/or sign up on healthcare.gov.8
Digital Drives Conversations, Opinions, andPerceptions
40 percent of consumers want more digital interactions than companiesare providing.9
53 percent of users recommend companies and products on Twitter.10
15 percent increase in the churn rate can result from failure to respondvia social channels.11
59 percent of twenty-five-to thirty-four-year-olds discuss poorcustomer experiences online.12
81 percent of purchasers get advice from their social networks.13
We Are Becoming More Mobile Every Day
10 percent of Americans have a smartphone but no Internet at home.14
92 percent growth in mobile usage occurred from 2013 to 2014.15
17.4 percent of all Internet traffic is global mobile traffic,16 whichsurpassed traditional desktop Internet use in 2015.17
A 100 percent increase in the sales of wearable devices has occurredmonth after month since October 2012 and has increased exponentiallywith the launch of the Apple Watch.18
Typical mobile users check their devices more than 150 times a dayand spend more than 141 minutes on their devices each day.19
The Future Is Being Written and Changed Rightin Front of Us
Content on the Internet tripled between 2010 and 2013.20
There are 1.17 billion unique Google searches each month.21
16 to 20 percent of Google search queries asked each day have neverbeen asked before.22
An estimated three hundred hours of new video are uploaded toYouTube every minute.23
Five million new images are uploaded to Instagram every day.24
These stats show that digital is helping to increase the rate and pace ofchange and creating different worlds for businesses, organizations, andgovernments. But the world is also changing for the customers and peoplewe serve. You have undoubtedly heard a number of experts proclaiming,“The customer is in control.” However, many leaders only look at thecustomer from a surface perspective. Customers can get what they want,and they are communicating their desires in more abundant and highlypersonalized ways. They are also reshaping their own experiences whilebeing presented more information than they will ever be capable ofdigesting. The world that consumers exist in has continued to evolve to aplace where there are too many choices to make, both for consumers andfor all of us who communicate with them.
“Technology is transforming innovation at its core, empoweringcompanies to test new ideas at speeds and prices unimaginableeven a decade ago. You can stick features on websites and tellwithin hours how customers respond. You can see results frominstore promotions or efforts to boost process productivity almostas fast. The result? Innovation initiatives that used to take monthsand megabucks to coordinate and launch can often be started inseconds for cents. That makes innovation, the lifeblood of growth,more efficient and cheaper. Technology makes innovation agile.Companies are able to get a much better idea of how theircustomers behave and what they want. This gives new offeringsand marketing efforts a better shot at success.”—Michael Schrage, research fellow at MIT Sloan School’s
Initiative on the Digital Economy, oversees research on
digital experimentation and network effects, and is author ofThe Innovator’s Hypothesis
Digital Transformation PerspectivesDo you think the amount of choice consumers face is hyperbole? Here arethe facts: Consumers on average make seventy choices a day25 and see wellover thirteen thousand brand messages26 (up from five thousand just a fewyears ago). Tried buying toothpaste recently? If you want to buy Crest,there are twenty-seven varieties alone. Add in Colgate and there are overfifty, and 352 distinct types or sizes of toothpastes are sold retail. This isjust one category out of fifty thousand products sold in a typicaldrugstore.27
Providing endless options for everyone is neither possible nor thesolution. Rather, the secret is to enable customers to choose what they wantwith smart digital customization. Look at how Uber, Salesforce, Tesla,Netflix, Amazon (especially Amazon Web Services), and others haveseemingly overnight replaced business models or used digital to be efficientand effective and solve customer issues faster and better than traditionalleaders. These brands are built around the philosophy of increasingcustomer success in a digital-first world.
“The aim of marketing is to know and understand the customer sowell that the product or service fits him and sells itself.”28
—Peter Drucker, author and consultant
Part of the reason for not getting digital faster is that organizations arefocused on measuring success from a historical viewpoint. Watching salesthrough tracking data, monitoring brand performance, or even getting socialfeedback drives businesses to improve what they measure. Infinite choiceson the consumer side need to be matched with real-time feedback andresponse on the business side. We would argue that some of the infinitechoice comes as a result of poor understanding of the consumer because ofreliance on historical data. Do Colgate and Crest really need more than fiftyvarieties of toothpaste between them? All success stories in digital to daterely on a simple premise: Automate the mundane and enable customers to
get what they want in an easy and simple way. This is digital in a nutshell,and given the right tools, insights, and content, customers will solve theirissues quickly and without much handholding.
The solution sounds simple: Use digital to better understand yourcustomers. Right? Wrong. There is more to thriving with digital thanmerely understanding your customers. You need to know where customerswant to go—not just where they are right now—and deliver better than thecompetition. Take Uber for example. Uber is not a digital success storybecause it is merely a different type of cab company. It wins because it is adigital transportation company that solves a transportation problem that cabcompanies solve now, but in an elevated manner. The subtlety of thisdifference cannot be understated. New winners reimagine the problem thecustomer needs to solve and use digital to make it easy in wonderful andnew ways.
Going back to the steamship example, think about the possibilities whenyou aren’t constrained by wind. You find that there are any number of newpossibilities and benefits, both small and large, that can stem from movingcargo on the sea with independent power. Uber did not start its business byanswering the problem: How do we make cabs more digital? If it did, itwould have become a smartphone app tied to a legacy infrastructure. Theresult would have been a marginal improvement hampered by oldtechnology with little or no differentiation. Instead, Uber started out usingdigital to turn a travel headache into a luxury experience. Thus, the trick isnot to be more digital. It is to become digital and use the technology totransform the organization’s view of how to solve customer problems. Seethe difference?
Digital Transformation PerspectivesUber is not in the taxi business, at least not in the conventional sense,because it owns no cabs and has no cab drivers as employees. Instead, itplays the role of matchmaker, matching a driver/car with a customerlooking for a ride and taking a slice of the fare for providing the service. Itsvalue comes from its pricing/payment system (where customers choose thelevel of service, ranging from a car to an SUV, are quoted a fare, and payUber) and its convenience (where you can track the car that is coming topick you up on your phone screen).
Uber now has newer competitors fighting to take away share. Beyondthe “traditional” Uber competitors such as Lyft, there are now companieslike Zoox, which recently raised $1.55 billion to tackle mobility and changethe way we get around. Even the new darlings of the digital economy arenot safe from forward thinking and customer-centric newer digitalorganizations.
“At Zoox what we’re creating . . . is not a self-driving car any morethan the automobile is a horseless carriage. We’re not building arobo-taxi service. We’re actually creating an advanced mobilityservice. You can really think of it as Disneyland on the streets of,perhaps, San Francisco, and that means a vehicle that is smartenough to understand its environment, but it’s also, importantly,smart enough to understand you, where you need to be, what youwant to do in the vehicle, and how you want to move around thecity.”29
—Tim Kentley-Klay, founder, Zoox
Our research, interviews, and experience all point to one key question:How do we take the business foundation we have and combine it with thedigital perspective we need to view and solve the problem that customershave? Although all of this may have you worried (and it should), certainfundamental truths don’t change and cannot and should not be ignored asthis transformation rapidly unfolds. To that end, we are going to arm youwith the information, data, insights, and more importantly, tools andframework to understand and answer this question in your organizationthrough digital transformation. The examples we will use are focused onhow digital technologies matched with innovative thinking and reimaginedbusiness practices are changing the world we live and work in.
To give you a better perspective, let’s look across four distinct butconnected arenas:
How to move from the old world to the digital world
What drives digital and the key barriers to success
What the framework is for getting digital right
How to implement digital today and get on the right path for long-termgrowth
Thinking about your own experiences in the context of these arenas,you should agree that this will not be an easy journey nor one with aperfectly plotted pathway to success. You will fail time and time again.Failing should be something you constructively strive for, enable, andrejoice in. There are too many choices and alternatives to be perfect everytime, but each failure can lead to success if you learn from your mistakesand those of others. Additionally, there are some basic principles from theold world that we should embrace on this journey to reduce some of themissteps. What is the first place where your organization is using an oldview of the world to try to define your new digital DNA landscape?
PART 2
HOW DIGITAL THINKING CHANGES YOURACTIONS AND RESULTS
A
CHAPTER 3
SEVEN DRIVERS THAT WILL HELP YOUESCAPE THE OLD WORLD
“Escape Velocity is about freeing your company’s future from the pull of thepast, but we should ask ourselves right from the start, why should one
believe it is in need of liberation? What’s the matter with the status quo?Why isn’t ‘steady as she goes’ the mantra of choice, or perhaps ‘stay the
course’? What change is so dramatic that it calls into question the workingassumptions that have sustained successful business performance for [the]
past half century?”—Geoffrey Moore, Escape Velocity
lmost all research on digital transformation and our own experienceswith clients point to the fact that there are Seven Drivers that
organizations need to understand to be successful and win in the long run. Ifyou tap into the Seven Drivers properly, each of them (individually or asgroups) will help drive much of your success in digital transformation. Oneof the major challenges to success with digital transformation is a lack ofawareness of the forces within and around your organization. Remember theanalogy of the sailing ships versus steamships we discussed earlier? Lookingthrough the wrong lens and not recognizing the drivers can be a costlymistake.
“The difficulty lies not so much in developing new ideas as inescaping from old ones.”1
—John Maynard Keynes, economist
Peter Drucker described the factors that defined moments of remarkableinnovation and change in his book Innovation and Entrepreneurship. We seethese factors more as pressures than drivers. When there is acute awarenessof these pressures, often organizations can turn them into drivers for success.Digital transformations enable you to take advantage of these markettensions, which historically many organizations have tried to shieldthemselves from because they were not agile enough to take advantage ofthem. In examining Drucker’s pressures, you can see many of these sevenpressures are present today.
Digital Transformation PerspectivesDrucker’s seven pressures are listed below:2
1. The Unexpected: An unexpected success, an unexpected failure, or anunexpected outside event can be a symptom of a unique opportunity.
2. The Incongruity: A discrepancy between reality and what everyoneassumes it to be, or between what is and what ought to be, can create aninnovative opportunity.
3. Innovation based on process need: When a weak link is evident in aparticular process, but people work around it instead of doing somethingabout it, an opportunity is available to the person or company willing tosupply the “missing link.”
4. Changes in industry or market structure: The opportunity for aninnovative product, service, or business approach occurs when theunderlying foundation of the industry or market shifts.
5. Demographics: Changes in the population’s size, age structure,composition, employment, level of education, and income can createinnovative opportunities.
6. Changes in perception, mood, and meaning: Innovative opportunities candevelop when a society’s general assumptions, attitudes, and beliefschange.
7. New Knowledge: Advances in scientific and nonscientific knowledge cancreate new products and new markets.
If you are looking for a new business opportunity, monitoring theseseven sources may provide you with a chnace for innovation.
These pressures play a role in our Digital Revolution, and many at thesame instant, depending on your industry, market, or situation. As you lookthese over, we challenge you to think about your own organization and askyourself these three questions:
Do we acknowledge these pressures in the normal course of business aswe make decisions related to partners, customers, employees, and ourfuture?
How often does somebody raise one of these pressures as aconsideration or objection when making a decision?
Are people focusing on learning and helping others understand thesepressures?
The Seven Drivers of Digital OpportunityAlthough Drucker’s pressures are still relevant today, the digital era hasimpacted and skewed them in ways he did not foresee many years ago. Assuch, we are seeing a new set of drivers that are specific to digitaltransformation. The Seven Drivers of Digital Opportunity are the keyelements within the conversations that we need to focus on to thrive withdigital transformation.
“Every business should jump at the opportunity to improve andtransform, especially when there are great rewards to reap, andwhen not doing so could be harmful. The never-endingadvancement of technology presents enterprises with countlesspromising opportunities for every aspect of their business.”3
—Sven Denecken, global vice president of Strategy, CloudSolutions, SAP
As we discuss the drivers of digital opportunity in detail, think abouteach through a digital-first lens. The Seven Drivers (see figure 3.1) shouldbe a part of every conversation you have when making decisions andbuilding strategy with peers, colleagues, and partners. Without awareness
and conscious conversations about these drivers, how can you expect to havea structured approach to benefiting from a win in the digital era?
Figure 3.1: Seven Drivers of Digital Opportunity
Driver 1: The compression of supply and demand enables nearinstant fulfillmentAdam Smith, the father of supply and demand theory, and Paul Samuelson,the Nobel Prize–winning economist and Keynesian simplifier, would haveshuddered at the immense compression taking place today between supplyfactors and demand elements. Historically, many businesses profited fromthe time lags between supply and demand by exploiting geography,knowledge, and trading practices.
Whether it is StubHub, eBay, Amazon, or any other supply-anddemand-based market, the timelines between the two have shrunk. Now the onlybarriers to price have become brand value, experience, and pure featuredifferences. Just look at Amazon. Even the oddest products have more thanfive hundred comments, with dozens of suppliers and differing price points.Amazon and others are working to deliver their products within the sameday or hours of when a customer places an order. Near-instant gratification isalmost a universal phenomenon across the Web, with instant compressionoccurring across everything from how we hire and find service people tohow we donate money.
No longer can brands easily defend markets based on geographic control.Consider how much easier it is to make brand decisions than ever before.You can switch brands, delivery dates, and prices, and change products orsuppliers with one or two clicks. Choices are delivered in targeted ways, andthey are changing our tolerance for gaps in supply and demand. Where wemay have tolerated certain aspects five years ago, supply and deliveryoptions are changing even more with 3D printing, customization, andpersonalization happening in almost every market.
If you’re still not convinced, consider these facts:
Poor service experience led 78 percent of consumers to abandon atransaction or not make the intended purchase.4 Can you imagine thatmuch abandonment in a physical store?
Apple flies many of its products in on jets from China to compresssupply-and-demand time frames to hours, not days or weeks. How areother brands going to counter or keep up if they don’t have Apple’smargins?
Amazon is experimenting with same-day delivery and looking at usingdrones and even mass transit to bypass traditional shippers and reducedelays. What could the impact be for other retail businesses anddelivery services?
Nordstrom uses in-store tablets to help customers shop across stores fordelivery. As new technology is taking hold in a number of retail outlets,how will stores evolve as delivery time is also being shortened?
Nike and Adidas allow you to create custom shoes, and many NFLteams are now creating custom 3D-printed shoes for their athletes foreach game. With customizable shoes already a reality, how long will itbe before you can design, order, and wear your new shoes in the sameweek or even in less than twenty-four hours?
Driver 2: Shifting demographics are changing customer needs andexpectationsChanging demographics have significant underlying implications becausewe can no longer put people into nice, simple brackets. Interestingly enough,we have seen a significant compression between the generations in many
ways. AARP generations surprisingly have a lot of the same characteristicsas many of the other generations. Like millennials and Gen X, many of thesepeople are online, actively working and playing in a digital world. We areusing digital as a primary lens for our work and personal worlds as we get,find, and use information. Look at the decline of direct mail, event-basedmarketing, or traditional print-based communications. Even large and criticalpurchases can have little to no human contact. For example, Amazon WebServices is nearly 95 percent self-managed and hosts a large Web and cloudpresence for many leading brands. We can buy cars on eBay, get house loanson Quicken, and even buy buildings online.
The debate about how each generation functions adds some spice to thisconversation. Although people born after 1995 who are used to constantInternet access differ from other generations in some ways, we areincreasingly seeing similarities between age groups. The act of buying life orhealth insurance or even a car for a baby boomer or millennial is similarbecause of the technologies we use every day. Regarding customization,many brands are trying to skip this debate. Think about it this way: If webuild our businesses to meet the digital needs first, then providepersonalization and customization to that, how much does the generationmatter beyond the options provided?
Want more proof?
25 percent of the US population is in the millennial generation, and by2025 they will make up 75 percent of the global workforce.5
More than 70 percent of millennials expect to be self-employed at somepoint. Employers can no longer hope to keep employees for five to tenyears, let alone for life.6
24 percent of all new American businesses in 2013 were started bypeople in the fifty-five to sixty-four age group, according to data fromthe Kauffman Firm Survey. This generation isn’t retiring as soon asothers and will continue to drive entrepreneurial energy and the use ofthe digital landscape to a large degree.7
39 percent of people now deposit checks via their mobile phones.Imagine how this weakens the intimacy and engagement with theirbanks.8
“People—of all ages and in many markets—are constructing theirown identities more freely than ever. As a result, consumptionpatterns are no longer defined by ‘traditional’ demographicsegments such as age, gender, location, income, family status, andmore.”9
—Paul Backman, chief client officer, TrendWatching
Driver 3: Access to more and more information is leveling theplaying field in every marketAlmost anything and everything (including national secrets, thanks toWikiLeaks and Edward Snowden) is available online, and the amount anddepth of information is growing exponentially every year. From a day-to-daystandpoint, secrets in pricing, customer feedback, competitive commentary,and even employees’ views on working at their company (e.g., Glassdoor)are omnipresent on the Web. This means living in a digital world no longerenables information discrepancies and has fundamentally changed the waywe buy, sell, interact, choose, and live. It is impossible to escape thesesimple realities, but time and time again we see companies and leadersignoring the significance of how information levels the playing field andimpacts how to think and act for truly successful digital transformations.
Just look at the following examples:
William Gibson said, “The future is here; it’s just not evenly distributedyet.”10 However, news of bad customer service reaches twice as manyears as praise for good service.11 Negative information has a head startin the Digital Age.
For every customer who complains, twenty-six remain silent.12 Can abrand afford to have bad products when near-instant feedback isavailable for the asking?
Americans tell an average of nine people about good experiences andsixteen about bad ones.13 Does your digital strategy work to preventthis from happening or help cause it?
In 2010, 24 percent of Americans posted comments and reviews onlineabout the product or services they bought.14 Soon, almost everything in
B2C and B2B will be reviewed. Is your brand ready to act and respond?
Interbrand’s list of the “100 Best Global Brands” noted that eleven ofthe top twelve brands are currently running various types ofcrowdsourcing projects.15 This statistic provides more proof thatcustomers are in control and that design is being outsourced to themasses via digital.
“Our industry does not respect tradition—it only respectsinnovation. Customers are more influential than ever before. Theyexpect speed and personalization. And they have options—lots ofoptions. Digital technology is leveling the playing field forbusinesses of all sizes to disrupt their industries. It’s creatingopportunities to develop products and services that were onceinconceivable. Size, which was once a competitive advantage, isbecoming a liability as businesses that once dominated the marketare now struggling to keep up with young, nimble startups. The riseof digital is going to completely disrupt businesses and dramaticallychange the competitive landscape. Today’s leaders know that tothrive, they must transform into a digital business.”16
—Satya Nadella, CEO, Microsoft
Driver 4: Pay-as-you-go provides infinite ability to scale every facetof a businessDue to the efficiencies digital provides, it is now commonplace to havecompanies with billions of dollars of revenue and a tiny number ofemployees. New digital businesses and business models are popping up totake advantage of the opportunities to start and run a business built on alargely digital backbone. Although this shift is not entirely new (Web 1.0offered a glimpse of this phenomenon), the difference now is the ability tobuild a complete and functioning business out of virtual elements withinhours. Everything from design to delivery, sales, marketing, service, andeven returns are truly a few clicks away. Even CIOs in the largest Fortuneorganizations are increasingly adopting this “as-you-go” model. In mid-2014, Gartner talked about 70 percent of CIOs changing their sourcingmodels in less than three years.17
“How can I get innovative, be more creative, and tap into the bestminds in the industry to help me transform? That’s what digitalenables and what is so powerful about crowdsourcing that itenables. It’s the future of work. Any business can get access to themost innovative talent in the world at a fractional rate to help acompany transform. The only question is: Is your organizationready, and will you be able to handle the changes they will bring?”—Chris Barbin, CEO, Appirio
Consider these facts:
Crowdsourced capital is real, but so is microfinancing across the globe.Look at the recent sensation, Flow Hive, and how it raised $2.18million in twenty-four hours versus a $70,000 objective.18 Who wouldimagine the opening up of one of the oldest pre-medieval industries inthe twenty-first century?
Goldcorp released previously secret geological data and offered$500,000 to individuals who helped the company find six millionounces of gold. The challenge yielded $3 billion in new gold in oneyear,19 once again showing the power of digital to provide immense andimmediate scale.
People services such as 99Designs for graphics and Appirio/Topcoderfor technical and IT skills allow you to virtualize whole departments.With a service for almost any business function, scale is achievablewith just a few clicks.
“How do you build that value? Don’t compromise it, but be drivenby what the customer needs are. Our customers had a range ofspending needs, and we wanted to gain scale and relevance aroundthe world . . . the reality is you need to work with partners, you needto expand, and what you can’t do is shrink to greatness. You’ve gotto grow, and you’ve got to use your brand to grow; but you’ve gotto treasure that brand because that’s your moat around yourcastle.”20
—Ken Chenault, CEO, American Express
Driver 5: New competitors are built to be digital from day oneThink about the up-and-comers during the past decade that have eithercreated new business models or stolen share from established players. Tesla,for example, has shown a remarkable ability to build a revolutionary digitalinfrastructure for selling cars and batteries directly. First, most are built fromthe ground up to be digital. This provides advantages in how they listen, act,deliver, and engage. Think about it this way: Most new digital businessesrecognize that customers get ideas, content, and brand value from almostinfinite sources. Also, their livelihood is reliant on having information attheir fingertips to drive fast, empowered decisions and plan just enoughahead to be competitive but not overly committed to one narrow or singularstrategy. Also, even the most advanced marketing, social, and listening toolsare purchased by the seat or user. This gives startups the same power tounderstand, engage, and look for opportunities in marketing that traditionalbrands have and use daily.
The challenge is discovering how to build these capabilities into hugeorganizations. Many are trying, and Zappos may be the most revolutionaryexample. The company has experimented with shifting its entireorganizational structure so that almost all of its 1,500 employees no longerwork for a manager. Rather than being accountable to a single boss in atraditional hierarchy, each employee reports to the other people in theircircles. Then each circle is tasked with an organizational goal to achieve, andeach role that people fill within the circle is a task necessary foraccomplishing that goal. Ultimately, this management structure, called“Holacracy,” is being morphed from its original vision as they tweak andrefine the process and system to design a new organizational structure tohandle the challenges they have experienced and keep them on the front ofthe wave.
And these trends are continuing: Business Insider argues that only$750,000 to $1.5 million is needed to take a new product to market or astartup.21 This is but a fraction of what most large organizations spend.
Crowdfunding is changing the way individuals and organizations raisemoney. GoFundMe has raised more than $3 billion for personal fund-raisers.Kickstarter raised $444 million in 2014 alone.22 Digital has removed thefunding barrier that stymied many startups in the past. About 18 percent ofentrepreneurs succeed in their first venture.23 This again shows how thedigital tools available to startups are making a growing number successful
right out of the gate. Kickstarter has launched more than ninety-eightthousand new projects and raised $521 million in its first four years ofexistence.24 Crowdsourcing is now becoming mainstream as even largerbrands are tapping into the power to test and fund products socially.According to Kickstarter, only 10 percent of projects that raise more than 30percent of their goal end up failing, and only 3 percent fail that surpass 50percent funding.25 When the market votes, businesses tend to succeed. Thisprovides an easy way of testing and verifying ideas faster and more cheaplythan traditional launches.
Harvard University noted that 72 percent of startup founders today arejust coming off previous positions as director or higher roles at otherbusinesses.26 This means they have the knowledge to build something newwhile tapping into virtual resources and new funding to build from theground up.
Only 7 percent of Gen Y works for a Fortune 500 company. Startupsdominate the workforce for this demographic.27 This is a big challenge forlarge organizations looking to tap this market going forward.
“Creating value with digital assets has been inherent in everyleadership role at Amazon and similar digital native companiesfrom day one, and it’s a big part of their success.”28
—Jeff Bezos, CEO, Amazon
Driver 6: The rate of change is extremely exponentialChange is more rapid now than ever before. In the past century, thebenchmark for change was about thirty years or so. Transitions from sail tosteam, propeller to jet, and mainframes to PCs happened in about thattimespan. Thirty years in the digital era feels like an eternity. Evolutions andeven revolutions are happening within years or at most a decade.Organizations will not have time to hide from these realities. Those thatdigitally transform will need an infrastructure capable of listening, assessing,and appropriately adjusting to the very nature of these changes.
“If the rate of change on the outside exceeds the rate of change onthe inside, the end is near.”29
—Jack Welch, former chairman and CEO, General Electric
To give you some context, a decade is a mere twenty-five hundredworking days. Now, businesses are privy to constant feedback that ishighlighting new paths, pitfalls, and opportunities every day. It would beeasy to dismiss, but think about what has happened with the Apple Watch.Rolex and Tag Heuer now have a new competitor—equal if not greater insize and market share—with more than $2 billion in sales virtuallyovernight.
This one launch stole—or created depending on your perspective—30percent market share in the luxury end of the market in less than one year.This is against brands that have more than 150 years of market success. Plus,Apple is expanding the market with watch apps, accompanying services, andadd-ons. Apple has shown how quickly a brand can diminish a hundredyears of market importance, not to mention relegating many smartwatchmakers to also-rans in terms of market share.
The rate of change is impacting us now and in the future: Half of theinformation taught to first-year science undergraduates will be obsolete bythe time they graduate,30 and 65 percent of children who are now inpreschool will work in jobs that do not exist today.31 Nothing elseexemplifies the pace of change and shows the need to keep up like thesestatistics.
More than 40 percent of the companies that were at the top of theFortune 500 list in 2000 were no longer there in 2010.32 The roles ofbusinesses are now being rewritten at a faster pace than ever before.
The price of storing a bit of information has dropped 60 percent a yearfor six decades.33 Combined with the insights provided by big data andtechnology becoming more mobile, we will soon live in a world wherealmost everything is recorded, stored, and analyzed in near real time.
About 73 percent of people surveyed said they wouldn’t care if thebrands they use disappeared from their lives.34 Consumers are getting usedto the pace of change and are far more comfortable with new providerscoming in to meet their changing needs.
There are now more mobile connected devices than people on earth.35
Everyone can see that the mobile shift is significant. But how does the worldlook, and how do brands respond and function when we are mobile all thetime?
Crowd thinking has replaced most forms of peer research. If youexamine the challenge that political polling now has, you can see that thereis no such thing as a random sample of a population. How you manage tofilter out the noise from signals as well as embrace the full nature of crowdthinking is a vital component for success. How are businesses going toseparate the good from the clutter when leveraging the public for primaryresearch?
Digital Transformation ToolsThe question becomes: How do existing brands deal with the pressure ofconstant and exponential change? In the past, large signals and clear signspreceded major shifts. The new model is much more about seeing faintsignals and understanding how they are evolving from even nascent quartersof the ecosystem. Figure 3.2 is designed to help brands identify and thinkabout the constant change in the Digital Age.
Figure 3.2: Trend Spotting and Tracking Template
Brand marketers, communications professionals, and sales and productdevelopment people should print out this chart and use it as a daily reminderof how to think about change and digital opportunities. To use it, take theinformation you are hearing, seeing, and dealing with every day and drop itinto one of these cells. Imagine you are a brand manager at Rolex and youare thinking about the luxury end of the watch market two years ago, oneyear ago, and now. Imagine if you had used this matrix two years ago tothink about the potential for luxury wearables with early indicators fromsocial conversations or internal water cooler chat. We have to wonder howmuch better watchmakers could have responded if they had been looking atwide sets of data. What is they’d taken advantage of insight ripples ratherthan just looking for the traditional huge one-off market signal?
Driver 7: The trade-offs between price, efficiency, and innovationhave disappearedClayton Christensen’s important theory in The Innovator’s Dilemma36 laidout key types of innovation, including pioneering innovation, innovation inbest practices, and technological innovations. Basically the theory states thatbusinesses have three clear paths to success: cut prices, be more efficient, orinvest in sustained technological advantages. Digital enables you to do allthree simultaneously. To give you an example, look at American Airlines.The company moved to iPads for its pilots in 2013, saving more than $1.2million a year in associated fuel costs by eliminating the need for the heftylogs and files as well as the large briefcases used to carry them. Right afterAmerican Airlines’ move, Southwest Airlines, the traditional low-fareleader, announced it was changing its decades-old reservation system to bemore efficient and provide far more automation. Executives at Southwesthave branded it “Transfarency,” because they have accepted the inevitablecompression of knowledge between their crowds and themselves.
Just fifteen months apart, two stalwart airlines moved to be more digital,lowered costs, and increased their effectiveness to be more competitive.
“From a digital perspective, our big banner is go where thecustomers are. Our job is to make sure that not only does theinformation present itself clearly and crisply for both the customersand our internal teams, but the information most needed is intuitiveand easy to use. Everything is more converged today than it’s everbeen. With this information, listening to the customer relentlesslyand the openness to test and learn, we as a company have thefreedom to take intelligent risks. Any innovation that can comefrom a customer suggestion or a frontline employee could turn intosomething big.”—Linda Rutherford, vice president and chief communications
officer, Southwest Airlines
If we look at crowdsourcing ideas from internal resources, we can seehow the shift in these Seven Drivers includes plenty of opportunity for thoseorganizations wishing to grasp the shift in demographics, attitudes, orcompression of supply and demand. A Cap Gemini and MIT joint studytitled “The Digital Advantage: How Digital Leaders Outperform Their Peers
in Every Industry” also eloquently argues that the economic outputs ofdigital leadership can be seen in revenue growth, profitability, and marketvaluation.37 All produced immensely positive outcomes, including—
More than 9 percent for revenue generation for the leading segmentover others
More than 26 percent differences in profitability
12 percent increase in market valuations
Figure 3.3 explains Cap Gemini and MIT’s views on the myths andrealities of digital transformation.
Figure 3.3: Digital Transformation Reality Check38
What’s the Bottom Line?Few organizations are experiencing all these pressures equally at one time,or even in the same sequence. To help organizations identify the keyelements affecting them, we have included a quick audit to share among
your colleagues. As you move through the following questions, remember toconsider the consequences so your transformation efforts will allow you tothrive.
Think about these questions in each of the current roles you have in theorganization, and see whether you are adequately paying attention to thepressures that are sculpting the world around you. First take the audityourself. Then sit with a colleague or work team and assess the level ofattention and action you are taking against each of the Seven Drivers.
Executive LeadershipAre you thinking about promoting or hiring people based on theirunderstanding of these drivers and the upsides they offer you?
Have you decided which of these drivers offer you the best strategicadvantage or present the biggest risk moving forward?
Marketing LeadershipHow much time are you asking your senior leaders to spend talking andthinking about these drivers?
Are you thinking about technologies and insights that will help takeadvantage of any of these drivers?
Sales LeadershipIs your sales team feeding data back to you on any of these SevenDrivers?
Have you thought about the skills and knowledge needed in three yearsto take advantage of these drivers?
Product DevelopmentIn your planning process, are any of these Seven Drivers part of thedebate?
Have you ever thought about which one of these drivers could affect theshape and nature of the products and services you have traditionallydelivered?
Human Capital LeadershipDo you recruit with a perspective on any of these Seven Drivers?
During interviews, are potential employees talking about any of thesedrivers and their potential skills to help take advantage of them?
Technology LeadershipHow important are these drivers in influencing the technologyrecommendations you make?
Are you open to throwing away technologies based on any of theseSeven Drivers?
The Future Is Digital and the Winners Are Being Built NowAlmost universally, executives clearly understand the need to be moredigital. However, it is not easy for many to know when, where, or how tomove toward digital and away from the old ways of business that will holdthem back. The trick is to move smartly and to navigate the right digitalcourse for each group or line of business within the organization. This is notabout recklessly abandoning what you already have or experimenting withsmall tests across the organization. Rather, it is much more aboutconstructing a strategy to identify how to bring elements within theorganization together to gain significant benefits and reap even morebenefits with each addition. In many occasions, the best combination willcome from the old with new skills, technologies, processes, and mindsetsapplied or added.
If all of this sounds logical and straightforward, you are not alone. But ifthe drivers are so obvious, why aren’t more of us achieving breakthroughresults?
Digital Transformation Tools
As a companion to the questionnaire, we’ve included an organizationalaudit, figure 3.4, to help identify the key drivers and their overall impact toyour business.
Figure 3.4: The Seven Drivers of Digital Opportunity
A
CHAPTER 4
THE TAO OF GETTING DIGITAL DONERIGHT AND OVERCOMING OURSELVES
“The competitor to be feared is one who never bothers about you at all, butgoes on making his own business better all the time.”
—Henry Ford
s we mentioned, the need for digital transformation should feelobvious and logical. We experience it both personally and
professionally in some way, every day. Yet digital transformation is still amajor struggle for organizations. Even the ones that are succeeding will tellyou they have failed just as many times as they have succeeded. Why cansomething so sensible and apparent be so hard to get right? The simpleanswer is that ample evidence suggests that strong undercurrents linked tochallenges and old-world thinking are preventing our success. In addition,there are fallacious assumptions about what it takes to overcome them andthrive with digital transformation, today and in the future.
“Quantum theory thus reveals a basic oneness of the universe. Itshows that we cannot decompose the world into independentlyexisting smallest units. As we penetrate into matter, nature does notshow us any isolated ‘building blocks,’ but rather appears as acomplicated web of relations between the various parts of thewhole. These relations always include the observer in an essentialway. The human observer constitutes the final link in the chain of
observational processes, and the properties of any atomic object canbe understood only in terms of the object’s interaction with theobserver.”1
—Fritjof Capra, author of Tao of Physics: An Exploration of theParallels Between Modern Physics and Eastern Mysticism
Organizations need to understand the challenges to success, see howthese challenges interact within the organization to prevent success, and getreal, practical advice on how to avoid these obstacles. From our extensiveresearch and client experience, we have identified seven core challenges thatact together to prevent success with digital transformation. Understandingthese and maneuvering away from and around them is the key to building asuccessful digital organization.
Figure 4.1 provides a quick overview of the Seven Challenges. A moredetailed deep dive with ideas about how to identify and avoid thesechallenges in your organization will be discussed in chapter 5.
1. Executive Mandates Are Not EnoughThe complexity that lies within successful digital transformations cannot beunderestimated. Simply declaring intent is more dangerous than helpfulbecause doing so drastically underestimates what it takes to get digitaltransformation right. Evidence shows us that executive engagement is vitalacross all activities. According to our research with PulsePoint Group andthe Economist Intelligence Unit, the most successful brands incorporated theactive engagement of the CEO or executive leader in five areas (governance,content delivery, resource allocations, metrics development, and activeadvocacy) across the organization. Brands failing to digitally transform hadthe executive engaged in just one thing—mandating action (like having theexecutive use social media themselves).
Figure 4.1: The Seven Challenges to Doing Digital Right
2. Expectations Chasm
Commitment to digital transformation may be well meaning, but the failureto deliver real economic value often leads to mass withdrawal from theprocess within and across the organization. Two years of tracking researchshows us that withdrawal is inevitable if expectations severely exceed thereality of what you can actually build and deliver. From wave one to wavetwo of our social digital transformation research, we saw major segmentsretreat in their commitment because of failures. Essentially, 24 percent of allFortune organizations retreated from midlevel commitments to digitaltransformation to the lowest possible commitment levels.
3. Digital Requires Both a Village and ArchitectureIn many cases, executives have found it best to move fast in launching newinitiatives to avoid organizational inertia and hurdles that prevent or delayaction. In digital transformation, we have found a significant contradictionthat shows speed comes from the combination of two elements:
a. Architecting the right larger framework (with metrics and enablementsuch as training and systems to get near-instant scale)
b. Building a wide range and degree of advocacy for digital projects withinthe organization
In fact, the most successful social digital transformations are based onindexing across one hundred key variables including mostly longtermarchitecture and process- and enablement-based activities. The end result isbusinesses that build this level of architecture can act on information andmarket changes twice as fast and often more successfully overall thanorganizations that act fast with little architecture and process. The researchshowed that these successful organizations went from 145 days to design,execute, and measure a new program to just 74 days. Also, failed socialdigital transformations tend to have only one to three departments orfunctions engaged, while the most successful social digital transformationsinvolve the active engagement of eleven distinctive departments orfunctions.
4. Digital Takes Different Metrics
In a digital world, measurement becomes the thermometer for success. Inmost cases, organizations skew toward the simple measure of volume togauge efforts. But the data from successful organizations shows the bestmeasurements are a synthesis of four types of metrics: volume-basedmetrics, engagement, advocacy, and abandonment. Note that small amountsof abandonment like a shopping basket or a social feed can be a keyindicator of near-future challenges. Smart brands focus much more on thesekey indicator metrics than only on volume-focused metrics. Also, 25 percentof the metrics used by winning brands in social/digital transformation focuson softer perceptual metrics.
5. Success Comes from the Inside Out, Not from Outside InWhen the impetus to be more digital hits an organization, the tendency ofmost leaders is to make it happen fast by outsourcing suppliers to take overkey parts of delivery and process building. However, a successful digitaltransformation requires that the core competency resides inside theorganization. The most successful organizations build the right skills andresources needed for digital internally. As we discussed in challenge 3,transformation takes a village and an architecture. The most successfulbrands own 85 percent of the production for social digital transformationacross four types of execution groups and only outsource 15 percent of theefforts.
6. Openness to Alternative Strategies Drives DigitalMost organizations become successful by developing a clear strategy,agreeing on a sequence of tactical activities, and tracking metrics to measureefforts. While these strategies are still required, leading performers in digitaltransformation aggressively pursue alternative options via numerousexperiments before locking down a course. This small but significantadjustment enables leaders to leverage the insights digital provides in a fastand efficient manner without derailing the entire organization or constantlyre-strategizing. Two of the key elements to success are the ability to driveextensive experimentation and to perform a full review of alternativestrategies before executing digital transformation activities. Only the besteconomic performers do both. In addition, of all the types of engagementplatforms and social content, the best economic performers leverage just
eleven platforms and four types of content. Overall, these leaders achievestellar results by focusing on only 44 of the 1,530 possible scenarios, or just2.8 percent of the total combinations of platforms and content.
7. Digital Is Not Just Customer FocusedWhile many organizations started with or have seen the most success withdigital transformation in customer-focused arenas, the best performersleverage digital to drive greater value across the business. Expandingsmartly to tie efforts across the organization is a key ingredient that deliverson what your customers want. The most successful social digitaltransformations involve at least twelve different ways of usingtransformation to drive change in customer service, employees,crowdsourcing ideas, demand, communications, internal collaboration, etc.Most organizations that failed focused on fewer than four ways.
Most Feel the Effects of the ChallengesNo matter where you look, there is almost a universal level of clarity ofthese or similar challenges. Research from Altimeter, Deloitte, McKinsey,and many consultants all argue for the same points:
Executive leadership needs to get on the bandwagon.
Teams need to be corralled and engaged.
Customers need increasing focus.
Cross-functional teams need to be set up.
IT leadership needs to be part of the process and the solution.
“Developing a culture that brings out the very best in people is sucha significant part of success because the need to evolve and respondquickly is a key part of what makes high-performing organizationsand teams uniquely qualified in our digital world. In sport or inbusiness or government. Only humans have that innate ability but itneeds to be brought out.
“A leader or a coach’s role is to elevate people’s performance andtry to help them be their best. To make this work, we [the SeattleSeahawks] have established a relationship-based approach thathelps all leaders understand the individuals that we work with andanalyze and figure them out, to make sense of what’s important tothem and how they operate. Through kind of a relationship andongoing two-way communication any team member can be directedwith the purpose of helping them consistently find their best. Thisstarts by creating an environment where they feel comfortable andfeel that they are accepted and feel that they have their best chanceto be heard as well as to learn. Millennials are inherently interestedin being the very best versions of themselves because theyrecognize that this is maybe the only thing they have control over ina constantly evolving digital world.”—Pete Carroll, head coach, Super Bowl Champion Seattle
Seahawks
None of these points are wrong, but it is not any more useful than tellingyou hard work will make you rich and successful. If this was all you needed,the world would be run by single parents with two jobs, who arguably workharder and longer than anyone. To get past the challenges, you need tounderstand how each of these points impacts your digital transformation(both at an individual and organizational level) as well as have the strategiesto move forward that create a set of components that work in one smoothsystem. In fact, the last three years of research on digital transformation andsocial media with more than a thousand case studies and more than fifteenhundred interviews with executives shows that, much like the world ofphysics and biology, there are unique indicators for success that go farbeyond the typical view of semi-independent components.
“There is no silver bullet—and while some factors have moreimpact than others on a transformation’s outcome, the real magichappens when these actions are pursued together.”2
—David Jacquemont, Dana Maor, and Angelika Reich
The secret to overcoming these Seven Challenges is to see them withinthe confines of failed digital transformation processes. Failures invariably
teach us far more than success. This is in part because failure is much morecommon, and the rationale behind success can be difficult to explain andillustrate in simple terms.
“I have not failed. I’ve just found ten thousand ways that won’twork.”—Thomas. A. Edison
If We Truly Understand the Nature of Failure, WeGet a Head Start on Understanding SuccessAs with Edison, many organizations are finding a large number of waysdigital transformation does not work. Understanding and avoiding the SevenChallenges will greatly improve your odds of finding a way digitaltransformation will work. How are we so sure? Extensive cause-and-effectanalysis across more than fifteen types of engagement includingcrowdsourcing, demand generation, employee management, executivecommunications, work collaboration, and interviews with CEOs, CFOs,CIOs, CMOs, and specialists point the way and highlight the issues.Combine these findings with economic performance indicators and we seeclear empirical evidence for why failure occurs across a whole range ofinterconnected elements:
Preparedness factors
Investment mindsets
Strategic models and frameworks
Sequencing of activities and resources
Collaboration factors
Measurement models
Timelines for success
Economic metrics
Executional focus (media and content)
Levels and range of advocacy
Looking at this data, we also see the Seven Challenges most of theseelements fall into. While not everything fits into the seven, we estimate thatthese are the largest and more significant items that derail digitaltransformation projects. Further, many of these failures that don’t fit neatlytend to be the result of the Seven Challenges to digital transformation andnot part of the root cause.
Digital Transformation PerspectiveThe segmentation model, figure 4.2, is from PulsePoint Group’s SocialMedia Accelerator research. This is a wonderful proxy for the whole digitaltransformation because it is focused on a rich vein of business-defineddigital activities designed to solve digital-age challenges such as ideageneration, employee collaboration, customer intimacy, and cocreationopportunities. Each segment was produced using an analysis that groupedperformance for the key underlying factors mentioned above. This allowedus to see the inner DNA of winners, those struggling, and thoseorganizations really standing on the edge. Almost a thousand interviews andmore than 2,700 tested scenarios provided us with a deep pool ofunderstanding about what lies behind success and failure. We named thesegments based on some simple ideas:
Trailblazers: They do one form of social transformation really well(often customer service and support), but they seem to have little intentor architecture in place to do anything else or move beyond their initialefforts.
Observers: They have barely put their feet in the water and have lost ornever really built an extensive strategy or process.
Creators: They have a number of social transformation projects andactivities in place, but each yields different results, and support,measurement, and enablement are patchy. Creators have becomesuccessful in pockets but not across every area.
Incrementalists: Like Creators, Incrementalists transform socially butstruggle to get measured returns and have stalled in their desire to do
more.
Thrivers: They are the leaders across the key components. Thriverscreate buy-in and enable processes across their organizations withexceptional measurement architectures. They do not overexecute or relyenough on external partners to get real scale and buy-in.
Dreamers: Dreamers undertake many of the actions that the Thriversdo, but the big chasm here is the failure to have a measurement systemin place.
As you can see in the segmentation model (figure 4.2), the return foreach group varied depending on the group and level of commitment. It isinteresting to note the change from wave one of our research in 2012 towave two in 2013.
“Individually, we are one drop. Together, we are an ocean.”—Ryunosuke Satoro, Japanese writer
The vast majority of the leaders we interviewed say the key toovercoming the Seven Challenges is focusing on real, practical advice onhow to avoid them in the first place. Now that you have seen an overview ofthe challenges to success, we need to dive deeper to see how they interact toprevent success across the organization. Which of the Seven Challengesrepresents the biggest hurdles for your organization, now and in the future?Does your answer change if you think about the seven across differentdepartments or implementations?
Figure 4.2: Learning the Pathway to Digital Transformation from SocialEngagement
T
CHAPTER 5
DIVING DEEP INTO THE SEVENCHALLENGES TO DIGITAL
TRANSFORMATION
“Twenty years from now you will be more disappointed by the things thatyou didn’t do than by the ones you did do, so throw off the bowlines, sail
away from safe harbor, catch the trade winds in your sails. Explore. Dream.Discover.”
—Mark Twain
he overview in chapter 4 should have provided you with a quick andeasy way to understand the Seven Challenges. The hard part is
systematically identifying which of the seven are either preventingsuccesses today or have the potential to derail your organization’stransformation progress.
“Digital Darwinism is a fate that threatens most organizations inalmost every industry. Because of this, businesses not only have tocompete for today but also for the foreseeable future. DigitalDarwinism is the phenomenon when technology and societyevolve faster than an organization can adapt. There are manyreasons for this of course. Every fabric of a company is straineddue to internal and external influences. The challenge lies amongthe very leaders running the show today. Their mission and the
processes and systems they support today may already be workingagainst them.”1
—Brian Solis, principal analyst, Altimeter Group
Figure 5.1: The Seven Challenges to Doing Digital Right
The research that we and numerous others have conducted shows clearevidence that these Seven Challenges (figure 5.1) are causing organizationsto fail or deliver far below their potential.
Executive Mandates Are Not EnoughTo fundamentally enable the process of digital transformation, leaders mustgo beyond mandates and encouragement by working with teams on thefront lines. To move beyond the mere act of cheerleading for digitaltransformation, leaders must realize there are sets of parallel challenges toconquer. Organizations that took a rigorous, action-oriented approach led byexecutives reported a 79 percent success rate—three times the average forall transformations. In addition, senior managers who engaged andcommunicated openly across the organization about the progress of thetransformation were eight times more likely to report a successfultransformation compared to those who did not engage in opencommunication. This level of engagement has an even greater effect onenterprise-wide transformations, where change efforts are 12.4 times morelikely to be successful.
“Leadership through digital transformation has to come from thevery top. Executives can’t just say it. They have to live it. Thisincludes understanding they can’t be experts in everything, butthey have to know enough to understand where they are weak.Think about it this way, the average age of a CEO is roughlyfiftyfive, so most did not grow up in a digital world. So they mustwork that much harder to live digitally. Without this extra effort,many businesses will fail at digital transformation until the nextgeneration moves into executive positions.”—Bruce Rogers, chief insights officer, Forbes
To succeed, executives need to overcome a number of parallelchallenges. The first challenge to overcome is actions vs. encouragement.This may seem obvious, but executives need to get their hands dirty.McKinsey conducted research that determined twenty-four practical actions
that organizations could take in digital transformation. The vast majority ofthese are communication and coordination initiatives that require executiveaction, not just mandates or cheerleading. Some of McKinsey’s practicalactions include—
Senior managers communicated openly across the organization aboutthe transformation’s progress and success.
Leaders modeled the behavior changes they were asking employees tomake.
Senior managers communicated openly across the organization aboutthe transformation’s implications for individuals’ day-today work.
The organization developed its people so that they could surpassexpectations for performance.
Performance evaluations held initiative leaders accountable for theirtransformation contributions.
Leaders used a consistent change story they shared across theorganization to align the organization around its transformation goals.
Roles and responsibilities in the transformation were clearly defined.
Sufficient personnel were allocated to support initiativeimplementation.
A capability-building program was designed to enable employees tomeet transformation goals.
Leaders of initiatives received change leadership training during thetransformation.
As you can see from the list above, leadership needs to make digitaltransformation part of the organization’s fabric via reviews, resourcing,training, goal setting, and other top-down initiatives. Failure to deliveractive and deep executive involvement pushes the organization down aninefficient and problematic path. Pockets in the organization form to heedthe executive mandate and become more efficient. This invariably leads toclashes between departments as well as resource, goal, and strategyconflicts at an organizational level. These issues induce nearly the exact
opposite of digital transformation’s goal—inefficiency. With groups andteams competing against each other or working in silos instead ofcollaborating, executives are forced to become arbiters of the problems. Theend result is the organization and its leaders are forced away from thestrategy and goals of the business and pushed toward wasting time andeffort by managing the tactical issues they created as a result of not beingfully involved.
The second challenge is the incapacity of the leadership to get the rangeand process for digital transformation outside their own expressions andinterest areas. If your executive leadership does not build advocate groups,widen metrics beyond volumetric measures, and set aside new (notreplacement) budgets for these endeavors, then their mandates are, at worst,hollow and, at best, ill thought out.
It is great to lead from the top, but great digital leadership involvesleadership across the spectrum. When we compared the highest economicperformers to the lowest, we saw clear indicators for failure and success.The secret is collective buy-in, collective enablement, and a focus on usingthe right metrics. The organizations that outperformed their competitorsused their leadership positions to fully enable the actions of their teams. Thebottom line is that executives have a crucial and deep role to play in digitaltransformation. Providing a mandate without being involved or blindlysigning checks to start digital projects without elevating efforts toorganizational goals leads to significant long-term setbacks that feworganizations can overcome.
Digital Transformation PerspectivesMany come to mind when we think of executives changing the fabric of anorganization. Yet few have been successful and few have become digitalexplorers like Angela Ahrendts, then CEO of Burberry and now Apple’ssenior vice president of retail and online stores.
At the time Ahrendts became CEO, Burberry was significantly fallingbehind in the overall luxury retail sector. The sector was growing at a rateof more than 12 percent a year, yet the company only saw 2 percent growth.Ahrendts knew a change was needed to keep up with and eventually surpassthe competition. Rather than just adding digital, Ahrendts and Burberrydecided to use digital across the entire organization to leapfrog their
competitors. During Burberry’s transformation, digital was involved inevery aspect of the business and became the catalyst for every change. AsAhrendts said, “When we set out to build our strategy, we said that wedidn’t just want to be a great brand—we wanted to be a great company towork for and to empower our young, digitally native workforce. We tell theteam constantly that the bigger we get, the closer we have to work and themore connected we have to be—and technology is the key connector.”
Below are a few of the digital changes Ahrendts spearheaded with herteams during Burberry’s digital transformation:2
Partnering with technology companies to create a retail theater, whichallowed Burberry to broadcast their multifaceted content to storesglobally.
Live-streaming runway shows in stores and enabling customers toshop the collection on iPads right afterward, for delivery in six to eightweeks.
With the help of Salesforce.com, joining its existing platforms withnew communication and analytic tools. Salesforce.com’s CRMmodules were deployed across the entire business.
Creating a strategic innovation council chaired by chief creative officerChristopher Bailey. It includes forward-thinking directors who are ableto share ideas and dreams. Senior executives and key internal teamsare then responsible for putting the dreams into action.
“In digital, we are ahead of most of our competitors because wehave been on this journey for the last six years. We are beginningto blur the lines between physical stores and the digital experience.More people see the brand via digital than any other medium.”3
—Angela Ahrendts, former CEO, Burberry, currently seniorvice president of retail and online stores, Apple
Expectations ChasmThroughout our research, we were able to see how less than stellar successin digital transformation projects led to mass withdrawal from the process
across the organization. The number one reason for this withdrawal is thatdigital expectations severely exceed the reality of what is built anddelivered. The key issue is the process by which digital projects are soldinto the organization. No one consciously oversells the benefits of a projectto get buy-in. However, racing to keep up or to get ahead, as well as theomnipresent information on the benefits of digital transformation projects,does tend to push some teams toward creating lofty expectations. Thisexpectation chasm becomes a naysayer’s paradise.
Thinking back to the issues described in the executive mandatechallenge, the fight for resources as well as political standing in theorganization often bring out the wolves when a project does not deliver. Atthat point, everyone in the business with a different opinion or priority hascarte blanche to use the failure as a proof point for his or her initiative orstrategy. It is no wonder that this chasm creates pullback as the businesslicks its wounds and attempts to do a postmortem on the failure. In somecases, results are achieved but oversold. In other instances, poor planning orexecution leads to subpar outcomes. Either way, the organization’s appetitefor digital takes a hit, and now every new digital project has a new hurdle toovercome.
The lesson is that commitment and interest can easily be dampened byfailures in a short period. With more than eight in ten executives buyinginto digital transformation, but less than 16 percent of organizationswinning, it is statistically likely you are one of the organizations struggling.Failure to deliver or scale properly takes you off the winning path asorganizations reduce intent, support, and energy. This phenomenon hasoccurred for years, and many of us can remember stalled CRM or otherWeb 1.0 projects that left technologies radically underutilized whenemployees didn’t quite get it. But in the digital era, everything is designedto work together and build on each other. Thus, a failure to set realisticexpectations in digital often leads to full retreat or reevaluation from digitaltransformation opportunities.
It is essential to make the right choices in the right way across everyfacet from design to delivery to measurement. Expectation setting in thiscomplicated environment is difficult. Failure to lay out an extended planand progress are key reasons many organizations are still struggling to winnow with their digital transformation investments.
Digital Transformation PerspectivesWhen thinking about an expectations chasm, few would disagree that thelaunch of the healthcare.gov website and health insurance program sufferedfrom a classic case of overpromising and underdelivering. While thehealthcare.gov website did get off the ground and successfully launched,few if any nongovernmental organizations have the resources or desire topush through a program fraught with underdelivery. Any CEO or boardfaced with the same issues would have pulled back on this and othertransformation efforts. It is important to recognize that many issuescascaded together in the healthcare.gov launch, much as they do inbusiness. Leaders need to be aware of how issues like these creep intodigital transformation projects to doom not only the project but also pushthe organization into digital withdrawal.
Unrealistic RequirementsWith healthcare.gov the promise was easy integration in a single site ofhundreds of options linked to a multitude of suppliers with secure logins,enrollment, and eligibility checking. This combination at this scale hadnever been attempted before. In business, many digital projects areannounced as the simple solution to solve a corporate problem (e.g., oncewe have a salesforce, sales will be fixed/greatly improved), but digital is nota simple fix. Digital is a set of principles that requires many coordinatedelements to drive value.
Integration NeedsFor healthcare.gov, the system and architecture required to integrate itsvarious functions and partners in order to deliver easy consumer use wasgreatly underestimated. In total, fifty-five contractors, five federal agencies,thirty-six states, and three hundred private sector insurers offering well overfour thousand plans had to come together in one system. In business, likewith healthcare.gov, many moving pieces need to be integrated, and notdoing so leads to overall failure. Departments, suppliers, customers, andvendors all have to be integrated into a business’s digital effort to reap therewards promised.
Fragmented AuthorityWith healthcare.gov, there was a great deal of infighting between differentparts of the bureaucracy contending for control—the IT shop, the policyshop, and the communications shop. Key decisions were often delayed,guidance to contractors was inconsistent, and nobody seemed truly incharge. In business, the same can be true for conflicts and power strugglesthat occur among departments and leaders when communication andcollaboration are not part of the digital culture.
Loose MetricsThe teams leading healthcare.gov didn’t initially have adequate orconsistent ways of measuring progress. Absence of reliable metrics helpsexplain why federal officials didn’t realize until late in the game thathealthcare.gov might not be ready for prime time. As with business, theright metrics deliver the right results. Failure to understand the differencebetween the success measures in digital vs. traditional projects has oftendoomed successful programs before they start.
Experimentation Before Lock-inThe people overseeing healthcare.gov possessed a management philosophyto immediately launch the site and fix it along the way, despite repeatedwarnings from contractors that more tests and experiments were neededbefore locking down the strategy and architecture. Businesses use thisphilosophy as well. Digital provides ample opportunity to test and measurebefore full commitment. Successful organizations often find new and betterstrategies throughout this process.
Fortunately, healthcare.gov recovered, thanks to a herculean effort andmany revisions. But as discussed, we don’t think a business in the worldwould have either had the resources or time to see an expectations chasmlike this through to completion. In fact, when we see much smaller failures,the organization almost always retreats across the board to reevaluate itsdigital strategies and tactics before jumping back into the water.
Digital Takes Different Metrics
In a digital world where numbers are infinitely available, organizationsneed to be cognizant of the need to focus on the most valuable metrics, notjust the most available. This is a small but significant change that almostanyone who deals with metrics will recognize. In most cases, big, easynumbers like volume metrics look great on reports and tend to help placecheckmarks next to quarterly goals. Digital is different. Digital givesorganizations the ability to see and use the big, easy numbers as well as theinsights and trend indicators that can truly drive competitive aspirations. Wehave seen numerous client examples where the default is to steer away frombig data metrics, even though the business has access to them, and towardtraditional and simple reporting of data. The reason for this is usuallycomfort and conformity with the status quo. After all, it is hard tobenchmark with different metrics or educate and convince executives andboard members about new measures. One of the ways companies can getaround this mentality is to recreate the story for investors by managing theexpectations across the company.
“One of the things I learned at Best Buy is they branded thetransformation and called it Renew Blue. They said, ‘Here is theprofit margin for the business in five years. And here’s how brand-new omnichannel growth and e-commerce are going to deliveragainst it’—and as much as they focused each quarterly report onwhere we were on same-store sales, they actually took awayguidance for each year. They reported against each quarter to focusinvestors on the multiyear transformation. Reframing theexpectations to be multiyear versus short term, branding thechange, and holding Best Buy accountable to the nonfinancialmetrics associated with long-term performance allowed theinvestors to buy into the transformation. If you’re a publiccompany and you merely throw your hands up and say, ‘Forgetabout what’s happening in the short term. I promise you somethinggood’s going to happen,’ you’re unlikely to have the same degreeof freedom. I would say reframing the journey and focusing on themetrics today that predict long-term success versus short-termperformance is critical for a transformation.”4
—David Lee, former SVP, Best Buy
In a digital era, everything is different and changing, and leaders shouldfrequently review their metrics accordingly. The key is to find the right mixof metrics for the group, project, or line of business based on your digitalfootprint today and in the future. As systems, processes, and businesseschange, it is vital that leaders reevaluate what they measure and how theydefine success.
The most successful economic performers in B2C and B2B categorieshave four things in common when they think about metrics:
1. Look beyond simple volume metrics.
2. Place equal emphasis on engagement and volume metrics.
3. Track customer abandonment (both unfollowers in social media and cartabandonment in e-commerce) as well as what content and ideas areshared.
4. Care about how advocates are developed and enabled beyond socialmedia, including employees, partners, and customers alike.
The best economic performers let go of simple volume metrics and havea strong metric preference for “perceptual returns.”
A synthesis exists between traditional volume metrics, behavioralelements—including activating content, engaging in conversations, speed ofreaction, and cart abandonment—and overall perceptions. The fascinatingparadox here is that the most successful companies, those that ferventlymeasure, are more than happy handling and rejoicing in the ambiguities ofperceptions.
With the near-perfect compression of supply and demand as well asalmost infinite access to information for customers, employees, andpartners, what we focus on can make or break a business in the digitalworld. Imagine if your organization is looking at the wrong metrics. If so,you are at best missing clarity and at worst missing meaningful indicators.This is compounded by the competitive nature of most markets whereeveryone is looking to capitalize on the information at their fingertips. Withdigital transformation projects growing and the Internet of Thingsexpanding daily, data is becoming more abundant than grains of sand on abeach. Winning organizations will have to continually evolve their metric
models to separate the mundane from the significant, giving them long-termbenefits for the foreseeable future.
Digital Transformation PerspectiveTransforming SanDisk, a twenty-six-year-old, $6.2 billion company, from asuccessful engineering and sales-oriented culture to a customer-focusedculture wasn’t a small undertaking. One of the key elements SanDiskdiscovered was that the correct metrics play a big part in getting digitalright.
One of the first lessons was learning what is important to the customerso that they knew what to measure. SanDisk started by determining whatwas most and least valuable to the customer and their overall satisfaction.SanDisk established relative weights and values for these customerperception metrics and operational KPIs and metrics that correlate to each.
Here is a simple but important example for order management atSanDisk: The company was using the perception metric “rate yourexperience of our order management on a scale of 1 to 5.” When theyreceived low scores, they dug in and found they were really measuring on-time shipments. Customers, on the other hand, cared about on-timedelivery. Most of their B2B customers have time windows to receive certainkinds of shipments. If the shipment doesn’t arrive within that window itgets scheduled for the next day. When a day is missed, the customer’sproduction is impacted and SanDisk might be forced to pay a penalty.Further analysis found that SanDisk employees were focusing on getting itout the door instead of making sure it arrived when it was supposed to. Thebottom line was that what the customer valued had nothing to do with whatSanDisk was measuring.
SanDisk’s Three Keys to Digital SuccessSanDisk transformed into a new, customer-led organization by focusing onthree keys:
1. Build a strong sense of ownership across the organization for theprogram based on the business outcomes that were important to eachgroup.
2. Have a clear link between measurable customer experience metrics andoperational metrics.
3. Use quick wins to build trust, credibility, and momentum.
“We really didn’t understand the differences between what each ofthose customer types needed. When issues cropped up because ofthose differences, they weren’t reported, they were taken care of byindividuals on a one-off basis. It’s not until you actually startgathering and analyzing data that you realize this is a real problemand a big one that impacts many customers. Problems like thesehave a material impact on the business and your ability to ramp.Focusing on customer value and experience in a systematic wayhelps you surface these things.”5
—Reginald Chatman, director of Customer Experience,SanDisk
Digital Takes a Village and an ArchitectureWe have said it many times before, but it matters most here: To besuccessful, any digital transformation effort must deliver a value far inexcess of the sum of its parts. Organizations can’t just add digital. Theyneed to be digital to get the parts working together properly and in the rightway. To be greater than the sum of their parts, organizations need aframework to orchestrate all the components, functions, and actions toachieve the promise of digital transformation.
Digital’s one true trait is that it touches nearly everything in yourorganization. As such, digital transformation should be viewed and used asan overriding effort to empower the whole of the organization. Many forgetthis or focus on the far smaller goal of adding digital inside their group orline of business, but transformation, by definition, means to change incomposition or structure, not just to add. It is surprising how manyexecutives forget this concept or try to tackle it alone within a department.
Across the organization, digital must be driven by extremely carefulthinking, planning, enablement, metrics, and a constant thirst to push theright boundaries to deliver value beyond just the systems. To further this,we believe that at least 50 percent of your energy must be focused on
building buy-in and engagement from key constituents as well as setting upthe right architectural elements for governance, council, extensive training,and executive and leadership involvement, among others. The idea of trulyisolated experiments in a digital world is not realistic. Digital ecosystemsfunction in a binary manner, and once they start they can grow extremelyfast. Starting with a well-thought-out architecture and developing yourvillage enables levels of support and action to springboard and incubate thenext digital effort. Without this blueprint in place, digital projects tend towither or deliver isolated results, never impacting the company as a whole.
“You can’t win the game by buying technology . . . it is as muchabout human capital and process as it is about the technology youenable people with.”—Bruce Rogers, chief insights officer, Forbes
All groups and departments matter in building advocacy. When we lookat the factors of possible influence, we can see advocacy is distributedacross almost every function. Even if you are not a department immediatelyaffected by the programs, the best organizations understand the need forbuy-in and contribution. Not only does the percentage of influence provewinners function best in villages, but it also clearly shows the need to buildwell-architected systems to win.
Digital Transformation PerspectiveTelstra, a major Australian telecom business, had its fixed voice revenuedrop from $5.4 billion to $4.4 billion from 2011 to 2013 due in no smallpart to the mass adoption of mobile devices.
The first key step in its digital transformation was centralizing theexisting teams and investments, as the company was spending significantresources on disparate digital platforms. The result was far less value fromtheir investments because of fragmentation in systems and suppliers. Thecompany had five different Internet platforms, five different relationshipsets with suppliers, and five different approaches to UX and design. Taskedwith bringing them all together, Telstra Digital sourced some of the bestdigital talent in the market to create one of the most robust digital teams inthe country. The move toward one platform and a unified approach to
information and channel architecture soon yielded game-changinginitiatives.
The Telstra 24×7 smartphone and tablet apps and CrowdSupportcommunity were among them. These helped to revolutionize the wayTelstra relates to and services its customers and how they cut the company’scostto-serve by a significant margin.
“The benefits were many, but there were also challenges. Somethings took longer to implement than we expected. It wasimportant to understand the nuances and the details. We alwaysaimed at the dual benefit of digitizing our systems and processes.This lowered our costs and provided a better customer experienceat the same time. Both imperatives fit neatly with our corporatestrategy.”6
—Gerd Schenkel, executive director, Telstra Digital
Together their digital efforts created a major channel into the palms oftheir customers and reduced costs while increasing revenue. The demandfor Telstra Digital’s services far exceeded supply. “There is a high degree oftech literacy at Telstra,” says Schenkel, “which is a good thing. We didn’thave to explain too much. But it also meant that everyone wanted moredigital functions for their product or their channel.”7
Success Comes from the Inside Out, Not from theOutside InThe digital era has provided businesses with the ability to scale almostinstantly via virtual organizations, cloud deployments, and otheroutsourcing options. Ironically, successful transformation requires theorganization to start with the core digital competency and build out fromthere. Often a perceived need to catch up or to quickly augment the digitalcapabilities pushes leaders to outsource key parts of delivery and build.Digital requires the core competency to reside within the organization, andthe most successful organizations build the right skills and resourcesinternally first.
“Reorganization to me is shuffling boxes, moving boxes around.Transformation means that you’re really, fundamentally changingthe way the organization thinks, the way it responds, the way itleads. It’s a lot more than just playing with boxes.”8
—Lou Gerstner, legendary former CEO, IBM
There are two key points leaders need to understand before outsourcingdigital:
1. It is critical for the organization to have a core foundation to build on asdiscussed in all the challenges thus far.
2. Success comes from identifying and augmenting your digital strategy atthe right times and with the right parts.
This is a delicate balance but one that is made easy if you have the rightarchitecture and village working together. Our research shows that the mostsuccessful organizations invest only about 17 percent of their resourcesexternally. More importantly, these winners focused their outsourcing on acritical set of components that the organization needed to move forward.
To get execution right, you need to facilitate a broad range of internalsupport defined by advocacy, active engagement, and involvement in themetrics building and assessment. The first failure is to go digital using onlythe IT department. The most successful organizations worked to get buy-inacross nine of eleven departmental functions, including IT, sales,communications, marketing, and others. This is democratization of digitalin its most complete way. In fact, the IT function was marginally morecritical than other functions like finance and operations for the winners,showing IT alone does not build or start a village.
Failure to recognize the democratization of responsibility is one of thekey issues. Leaders cannot build a winning strategy with an outsourced,checkbook mentality. There is a chemistry that is vital to success thatincludes internal fortitude with wisely chosen external resources.
There are three key points that organizations should be aware of:
1. The distribution of ownership is far greater among the best performersthan the least successful.
2. The size of the organization does not matter—from medium to largeenterprises, the results remained constant.
3. The capacity to organize these components is a critical element for digitalwinners.
“If HP only knew what HP knows,” former HP executive Lew Plattsaid, referring to the knowledge that is locked up inside most largeorganizations.9
Openness to Alternative Strategies Drives DigitalWinners in digital relish the data and options transformation provides. Themost successful digital and social transformations occur within brands thatdeliberately design and seek alternative strategies and extensiveexperimentation before they commit to a full strategy lock-in. This is thebeauty and power digital transformation provides.
“Many executives try to solve the problem of execution byreducing it to a single dimension. They focus on tighteningalignment up and down the chain of command—by improvingexisting processes, such as strategic planning and performancemanagement.”10
—Donald Sull, Rebecca Homkes, and Charles Sull
As we have discussed, the amount and pace of change is an opportunityto become a new winner or to fall behind. The difference between rising orfalling is often an organization’s ability to identify and capitalize on theopportunities that appear. To do so requires an agile approach to strategyand a willingness to experiment to see what will pan out. Many of theorganizations that have lost their standing have fallen victim to either beingtoo rigid in their strategy or being unwilling to take risks and experiment.
Think about former leaders who stuck to their guns and, as a result,have either failed or are slowly sliding away:
Nokia had the ecosystem, patents, technology, and capital to competewith virtually anyone, but they did not react fast enough to the
software and usability advances Apple and Google brought to themarket.
Quiznos practically reinvented the sandwich restaurant category bytoasting its subs but failed to see how price was becoming adifferentiator, especially during the recession, and now has reduced itsstores by 40 percent. On the other hand, Subway is growing at a recordpace, thanks to its $5 and $6 specials on their footlong sandwiches,health focus, and also now toasting its subs.
Groupon has struggled to stem the loss of market share and profitswhile trying to compete with more than a hundred big and small “dealsites.” The company, which grew at meteoric proportions leading up toits IPO in 2011, failed to see that consumers were more interested infinding a deal on what they were buying at the time of purchase ratherthan seeing a collection of deals advertised.
The companies listed above are not ones that missed technology shiftslike Blockbuster did with online video or Kodak did with digitalphotography. Rather, these organizations missed market and consumershifts, causing them to go from being market leaders to a fraction of theirformer standing. The market is speaking and sending signs for these shiftsevery minute of every day and in a number of ways. Digital transformation,when fully implemented, is the engine and driver to uncover and leveragethese signals. It is a brand’s job to use its village and read the tea leavesacross a myriad of functions and determine where to experiment, where toshift, and when to abandon its strategy. Not one of the companies listedabove was without warning or did not have the resources to experiment andidentify new growth paths.
In addition to identifying the changes, digital needs to also deliver newsocial and digital transformative programs twice as fast. This requirescollaboration. But one of the key tenets of rewarding employees andmanagers is their past performance. Their past efforts and successes are twoor three times more likely to be rewarded with a promotion than a trackrecord of collaboration. Not only does this run counter to the needs of aholistic digital transformation, but it also presents barriers to trying, failing,and offering alternative strategies up front.
Organizations need to understand that strategy lock-in occurs on both amicro and macro level. There are dozens of examples inside yourorganization where individuals or teams have fallen into the trap of trying toinfinitely scale successes in execution. While not as catastrophic asinflexible organization-wide strategy, this fallacy still locks the businessinto a path that pushes leaders to ignore potentially enriching new avenues.We see this type of pattern often once a successful platform or system hasbeen discovered. For example, brands that experience success marketing onYouTube or see how Eloqua was successfully generating more digitalmarketing returns tend to put all of their eggs into these baskets. It isunderstandable to pursue maximum returns and to keep going toward theaction or tactic that is working.
However, in a digital world the question is, when are you maximizingreturns vs. locking in a strategy that excludes other options? Winners indigital transformation are extremely aware of the need to push boundariesin one or many areas of the business, knowing they need to find the “nextthing” to drive further success. The key is to accept that each form of digital(sales, marketing, social, HR, etc.) may have a threshold or ceiling forresults. The best brands and performers recognize the need for a nearcomplete and growing set of transformative options and investments todrive success. The best brands and performers seek not only new platformsand systems but also, more importantly, new uses and angles different fromwhat they have already. This can include almost any kind of experimentacross any function, such as social, marketing, products, services, sales,support, and much more.
One of the best ways to determine how to maximize returns or how tolock in a strategy is to first ask three questions around any problem area:
1. What should we stop doing?
2. What should we start doing?
3. What should we do differently?
These questions will help frame the problem in a better way than simplydeciding or locking in a strategy. Another dangerous pitfall is when a teamprematurely develops a bias for action. This risk is particularly acute amongmanagers who pride themselves on getting the job done. The result: the
team shortchanges the “what if ” discussion and jumps right into a debateabout how to do it. If the conversation rushes too quickly through the messythrashing around of sense making and questioning the alternative, managersrisk diving into the details of implementation before they’ve exploredalternative assessments, surfaced and checked key assumptions, or testedthe fit between their interpretation and the facts on the ground.
Digital Transformation PerspectivePerhaps no other organization is as innovative or attempts moreexperiments than Google. Have you ever wondered what makes Google theholy grail of productivity and creativity? The company focuses its efforts onnine core principles of innovation:
1. Innovation comes from anywhere. It can come from the top down as wellas bottom up, and from the places you least expect.
2. Focus on the user. Worry about the money later. When you focus on theuser, all else will follow.
3. Aim to be ten times better. If you come into work thinking that you willimprove things by 10 percent, you will only see incremental change. Ifyou want radical and revolutionary innovation, think ten timesimprovement, and that will force you to think outside the box.
4. Bet on technical insights. Every organization has unique insights, and ifyou bet on them, they lead to major innovation. For example, Googleengineers, not the auto industry, came up with the idea of driverless carsafter seeing that millions of traffic deaths result from human error.
5. Ship and iterate. Ship your products often and early, and do not wait forperfection. Let users help you to iterate it.
6. Give employees 20 percent time. Give employees 20 percent of theirwork time to pursue projects they are passionate about, even if theprojects are outside the core job or core mission of the company.
7. Default to open processes. Make your processes open to all users. Tapinto the collective energy of the user base to obtain great ideas.
8. Fail well. There should be no stigma attached to failure. If you do not failoften, you are not trying hard enough.
9. Have a mission that matters. Everyone should have a strong sense ofmission and purpose, and each person should have his or her own story.11
Just think of the long list of experiments and alternative strategies thathave become successes from these principles:
Blogger—jump-started the blogging revolution by making it free
Google Translate—free translations across sixty-four languages
Google Docs—free “Office-like” productivity tools
Google Chrome—one of the leading Web browsers
Android—350 million smart devices and growing
Google Maps—almost single-handedly killing the GPS market
Gmail—free, unlimited email storage
Remember, this company started out as a search engine business. NowGoogle touches almost every element of our digital lives. Their methods forinnovation are to credit as much as the superior products they havedelivered. But don’t forget Google’s failures! Google has had more than itsshare of disasters, including Google Buzz, Google Plus, and Google Wave,among others.
“Google’s failure rate is higher than 95 percent in some cases. Thisis a company where it’s absolutely okay to try something that’svery hard, have it not be successful, and learn from that.”12
—Eric Schmidt, former CEO, Google
Digital Is Not Just Customer FocusedThere is no doubt digital was made for delivering customer-focused results.After all, customer feedback accelerated exponentially with social, and thisis a big driver for the overall digital transition phase we are in now. Despite
its customer benefits, far too many organizations limit the power andefficacy of digital to just this one area of the business.
It is essential for organizations to be obsessed with the customer andrelentlessly evolve and improve the customer experience. However, manyorganizations fail to realize the digital investments required to pay off thecustomer-centric vision. In fact, there are numerous examples where back-office functions delivered far more than customer-facing ones. P&Gcollaborated with the Los Alamos National Laboratory to create statisticalmethods to streamline processes and increase uptime at its factories. Theresult: P&G saved more than $1 billion a year.
This, too, is the power of digital to transform business processes andfunctions that can create a competitive advantage. P&G is now moreefficient and can produce either more cost-effective products or run athigher margins than its competitors. This, in many ways, is far moredisruptive than being more customer-centric. The key is to follow themoney and identify ways to use digital to reduce costs. When done right,digital can knock down the barriers and hurdles that rob value from thebusiness.
“I’ll keep you in the right direction if I can, but that’s all. Just . . .follow the money.”—Deep Throat, in the film All the President’s Men
There are two factors that tend to cause failure and should be avoided.Leaders must recognize that some or even all Seven Challenges will affectyour organization at some point. It is too easy to focus on the desiredoutcome and miss the challenge or challenges that are presentingthemselves. This usually pushes leaders to immediately jump to actions andtactics without ever identifying and fixing the root cause. Withoutaddressing the challenge, your organization cannot hope to ever achieve itsfull digital transformation potential.
The second failing is assuming that your infrastructure investmentscannot be scaled to provide value across other investments and areas of thebusiness. This is a major issue for isolated decision-making. The same istrue when we look at digitally enabling technologies. For example, if yourgroup is primarily using Eloqua, Marketo, Salesforce, or another softwarepackage for one area of the business, other parts of the internal ecosystem
will need, at the very least, to understand how it affects them in terms ofinformation coming in, decisions being made, or even processes needing tochange. It’s not just the act of implementing more types of digitalinfrastructure that matters. It is the success in using support and executiveengagement across functions and the ability to review and develop newbusiness processes. For transformation to work, the organization needsactive buy-in from all departments across all functions, from design tometrics. Failure to build that ecosystem stunts the capacity of thetechnologies and the people involved to fully transform digitally.
“We’re in the midst of an evolutionary adaptation in which peopleare being forced to gate out irrelevant information. And we’re in atime-compressed, rapid-paced life and business environment. Withinformation flooding our visual and vestibular systems in ourbrains, those that can gate out irrelevant information, be presentwith a fast-moving environment, will have a competitiveadvantage. To succeed, we need to train people’s minds to be inchaotic environments and to listen better and differently.”—Dr. Michael Gervais, consultant to world-class athletes and
teams, cofounder, Compete To Create Consulting
Digital Transformation PerspectiveIn 2009, after dismal performance cut the company’s stock price in half,Starbucks looked to digital to help re-engage with customers and improvethe bottom line. Starbucks’ chief digital officer and chief informationofficer formed a close working relationship and restructured their teams sothat they could collaborate from the very start of projects. In 2013, theyreduced time-in-line by nine hundred thousand hours, cutting ten secondsfrom every card or mobile phone transaction. In addition, Starbucks hasadded mobile payment processing to its stores, processing three millionmobile payments per week. While all of this benefits customers, it is theback-office functions that have improved and transformed to make thebusiness as a whole better.13
It All Seems Connected in Some Way
Of all the challenges we have discussed in this chapter, there is onecommon theme—digital has to be built from the core of the business tosucceed. Leaders who look at digital transformation as an incremental stepor process tend to fail. Even experiments and new digital additions need tobe made on a bedrock foundation consisting of—
1. Executive action and involvement
2. Understanding and realistic communication of the achievable results
3. Realization that what is measured must matter and demonstrate value
4. Deep buy-in, support, and resources on top of the right architecture
5. Internal understanding before external resources are added
6. Flexible strategies matched with experiments to identify and leverage theshifts that occur
7. Appreciation for the holistic value digital can bring across the business
Winning with digital is not easy. But it is fundamentally made simplerand more repeatable once leaders understand how these challenges sabotagetheir efforts. The key is to see the combination of what to avoid (unforcederrors) as well as the fundamentals of how to do digital right as animperative for corporate high performance.
“As a multisport athlete, I was always fascinated with competitionand how to win. At HBS and later at the Harvard Department ofEconomics, I was drawn to the field of competition and strategybecause it tackles perhaps the most basic question in both businessmanagement and industrial economics: What determines corporateperformance?”14
—Michael Porter, professor, Harvard Business School
We believe that these Seven Challenges should be driving how youthink about digital transformation and set up your organization to win in thelong run. Yet businesses need to address and overcome these challengesbefore moving full speed into a transformation effort. Far too often acompany’s first move is to reorganize and then add digital. The key is thatorganizations need to be digital first. Can you point to initiatives and efforts
in your organization that have broken with the principles of the digital bestpractices?
F
CHAPTER 6
SMALL STEPS EQUAL GIANT LEAPS
“The world as we have created it is a process of our thinking. It cannot bechanged without changing our thinking.”
—Albert Einstein
rom our research and conversations with digital transformationleaders, we have found that an organization’s ability to recognize the
key drivers and barriers that impact success is more than half the battle forwinning with digital. The issue, as we have stated, becomes identifyingwhich drivers and challenges affect your organization from the hundreds ofpossible combinations. In reality there are too many permutations to solvefor all of them, but there is a place to start. One of the keys used bysuccessful organizations is that they start by framing the debate anddiscussion around digital transformation projects. Modifying how youdiscuss digital transformation and its concepts changes how theorganization navigates its next steps and realigns its priorities.
The amount of time leaders invest in digital transformation is immense.In the research we conducted, one of the more remarkable facts was howmuch time leaders believe they will spend every week on digitaltransformation inside their organization, now and three years into the future.Finding any way to make digital transformation easier or better is crucial.Having a digital framework for the projects as well as the concepts and howthey are discussed leads to real transformative thinking. It may seem a littleridiculous that such a small change could have such a big impact, but if the
goal is to get people moving in a new direction, you need to introduce anew way of thinking. And this new way of thinking requires executives tospend more time in the future to bring the organization into alignment withnew digital directives and initiative, as you will see from our research infigure 6.1.
“You never change things by fighting the existing reality. Tochange something, build a new model that makes the existingmodel obsolete.”1
—Buckminster Fuller, American architect, systems theorist,author, designer, and inventor
From our research on transformation, we can see the significant timeinvestment leaders are putting into their digital efforts both now and in thefuture.
Figure 6.1: How Leaders See Time Investments in Digital Transformation
This shift in thinking and language is an inspiring idea, but one that mayfill your team with dread. Part of moving to this more digital state requiresthe team and organization to provide more than best efforts. Successfulorganizations work to have a love affair with their own digitaltransformation process and celebrate each achievement. Having this level ofaffinity with your digital transformation is virtually impossible if
organization members keep trying to equate everything to an extension orsimple evolution of your existing state. This “backward compatibility”thinking not only limits dialogue but also prevents the team andorganization from pushing the digital limits.
“I think the shifts that are occurring are both coming from theoutside and from within. The drivers are the expectations thatpeople have and see wherever they go. People, whether they are inthe role of buyers or citizens, expect an ‘Amazonian’ experience.When they see one or two organizations, or even internal groups,delivering at this higher digital level, they expect everyone toprovide an experience that is equal to or better. This expectationone-upmanship is the driver pushing all of us to do better.”—Gwynne Kostin, senior advisor, GSA Technology
Transformation Service
To get beyond these artificial concept and language barriers,organizations must understand three key shifts in thinking (both at theemployee and organization level):
1. Making giant leaps requires new concepts. New ideas and conceptsmatter in this digital world. We can’t use mainly old-world ideas orwords to describe new-world mindsets. Language is a vital ingredient inany transformative process and even more so in one transforming so fast.If organizations want to change behaviors and performance, they need togravitate toward new digital concepts to see and understand where theopportunities lie.
2. Small changes are the key to long-term results. Because digitaltransformation requires the investment of so much of it, time is one ofour greatest potential assets. But the lack of time can also be a hugeliability for effective performance. The key to getting time back andprioritizing is sometimes as simple as asking the right questions withinthe right framework. As we will discuss in detail later in the chapter, onekey exercise we have used to help get time back within a group ororganization is called Stop/Start/Do Differently, a method that has provento provide dramatic results. Quite simply, you ask what can you stop,start, or do differently across key aspects of the business.
3. Success breeds success. In digital transformation, as in other endeavorsacross the organization, gaining momentum and having success drivesmore and more results. There are a number of functional as well aspsychological reasons for this. In a category where about one in seven arestruggling to deliver real results, having just a little taste of victory cancause ripples across the organization. This is another reason why we arehighlighting the little things in this chapter.
Language and barriers seem like simple things to overcome. Whenaiming to deliver real results in digital, overcoming these simple hurdles isoften what separates your organization from those that struggle.
“Once you get into the digital mode and have shifted out of the oldway into the new way, you realize that it’s very empowering. Youcan make huge leaps when everyone sees what is possible andsays, ‘Let’s go after it. Let’s do it right. Let’s build something to beproud of.’”—Greg Godbout, cofounder and CEO, cBrain North America
Making Giant Leaps Requires New ConceptsWe need to be clear. Digital has the power to revolutionize yourorganization. One of the biggest failures organizations make is shooting toolow. Organizations that don’t fully move their thinking to digital—whetherin strategy, concepts, or language—risk underdelivering andunderperforming. This is not about digitally wrapping old-world languageinto the new world.
Think about it like this: When your organization moved to takeadvantage of social and Web 2.0, did you keep thinking and talking aboutthese shifts in traditional terms? Or did you use the new language andconcepts that came with the shift because they were clearer and providedmuch more depth in meaning? In the same way terms such as “content,”“touches,” and “journey” mean specific things in the social and Web 2.0worlds, the new digital world has its own concepts that provide greaterclarity and meaning.
“Words matter here. We spend a lot of time discussing how we talkabout driving digital transformation within our business. Morespecifically, we are a relationship company with a focus on digitalcapabilities to meet the needs and expectations of our members.This is no longer about reaching a destination but will be aperpetual journey that will continuously evolve. We’re alwaystrying to get better at describing what being a digital enterprise ordigital-first organization means in the context of better serving ourmembers in the most dynamic, personalized, and contextual waypossible.”—Chris Cox, head of Digital Experience Delivery, USAA
Digital Transformation PerspectiveIn the digital era, concepts, thinking, and language help drivetransformative change. Figure 6.2 lists key digital transformation shifts thatcan help drive success.
Figure 6.2: How Concepts Are Changing from the Old to the New World
When you look at the concepts above, some of the changes may soundor appear to be semantic in nature. They are not. Look at a few of these indetail below. As you read each, try to recognize that every concept shiftdrives a noticeable change in the way we need to think, collaborate, and act.
1. Reach to engagement levels: Reach is about a moment, one where weclaim we have touched an audience. The key is to think about the broaderscope of the term “reach,” beyond the association with media. Reachdoes and should affect all communications and touches. Engagement, onthe other hand, is about the exchange of value. As many organizations
have figured out, engagement is focused on the nature and quality of thedialogue rather than the volume. But in the digital era “engagement” is apervasive and all-encompassing term. In this form, engagement goesbeyond marketing and communications to sales, support, delivery, andbilling. In short, it is the total sum of a brand’s interactions with theconsumer that should ideally lead to evangelism, if done correctly andconsistently.
2. Metrics to insights that drive decisions that matter: We live in a bigdata, numbers-rich world, but that does not always mean we know orfocus on the right insights. “Metrics” is often seen as a term aboutgathering information. But successful organizations blend volume withvalue in the right proportions. Yes, getting more customers is a goodmeasure, but more important is understanding how to get more of theright or better customers for future growth.
3. Average customer to leading customers: If you focus on the averagecustomer or only on key groups of customers, you run the risk of missingfuture potential. In a fast-evolving world, we cannot assume that ourcustomer base will not change or that the change will happen over manymonths or years. Almost all new and emerging leaders that replacedindustry stalwarts did so by serving the leading customer as wepreviously discussed (taxis to Uber, Quiznos to Subway, etc.). This typeof failing in the Digital Age is inexcusable, as any business can seenearly every aspect of a customer. The key is to mine customer insightswhile looking for potential future customers.
4. Historical performance to real-time insights: Hindsight is not a logicalsingular lens for transformation. Since historical measures are easy,corporations often struggle with this. In a digital world that is constantlychanging, it is critical to look at all the right views to get the bestinformation and ultimately the answers. As your industry and othersleverage digital, competition increases. Therefore, winners will be theones using all available data to plot the newest and best paths, and loserswill be wasting time looking in the wrong places. Insights come fromsocial, sales, brand feedback, competitors, shifting trends, customer data,support data, trending conversations, and more. As a leader, you need tofocus on the range of views and insights as well as the right moment toapply these learnings.
5. Create content to cocreated content: In the rush to get out brandinformation and become their own media firm, organizations often go italone with a volume-is-better mentality. The bar is usually set rather lowas organizations see how much of their story they can get out whiletrying to garner some level of engagement. Just because brands have thepower to publish does not mean they have the content to engage. Thereneeds to be a shift in the way we think about content. In advertising, likein content, ideas and creative power rule. (This was father of advertisingDavid Ogilvy’s mantra.) When you set quotas but want to first tell astory, your initial steps are in reverse. Engagement comes from showingyou are the right company that is doing the right things worthy ofengagement. Thinking digitally about content first requires a focus on theideas and conversation occurring and what the audience wants. Togetherwith the power of crowds and partners you can create a vital mechanismfor driving interest and brand evangelism.
Small Changes Are the Key to Long-term ResultsAs discussed, in digital transformation many times the little things are whatmatter the most. Metrics, coordination, expectations, and other simple andsmall pieces have a tremendous effect on the ultimate success or failure of aproject. This is not to say you have to do everything right. The point is thatthe small things add up, and missing a few steps makes it tougher torecover. Conversely, getting a few right from the start gives you breathingroom when things do go sideways. The key is that leaders and teams needto spend as much time and energy on the small parts of digitaltransformation efforts as the large ones.
“With digital, we can make small changes in real time. It gives usmuch more granular measures to see changes much morefrequently while efforts are underway. Now, we can make a smallchange in a business process, campaign, or any activity to optimizethe result immediately. These small, ongoing changes are the keysto getting better results and driving long-term digital results.”—Lisa Macpherson, CMO/SVP of marketing, Hallmark
Far too often, teams push to gain momentum and critical mass withmuch speed to overcome organizational inertia. It can be seen in the initialstages of any project when questions like these dominate the discussions:
Do we have enough people behind this?
Do we have enough results now to go faster?
Do we have a successful formula we can scale with?
If you remember back to the Seven Challenges, these are not the thingsthat trip up digital transformation efforts. These are management issues thatnaturally arise with this effort. Navigating from one segment of digitaltransformation readiness or performance to another is a tricky activitybecause it involves an underlying set of assumptions and behaviors that canhurt you. Think about the following four erroneous assumptions andwhether they affect your organization:
1. Go short term: Looking for the next quick win sounds logical. But theresearch we conducted on digital transformation reveals that 58 percentof leaders in successful corporations say planning a longer-term strategyis more important than short-term goals (4 percent). The critical point isthat digital transformation is a building process where each piece eitherbuilds on the next or connects to the old. Long-term success requires youto think many moves ahead or become stuck with disparate tools andtechnologies.
2. Do more of the same: Being open to looking through a different lensbeyond what you are doing is vital. Even though digital is infinitelyscalable, each activity or project is not. Doing more of the same seemslike a safe bet, but it should be your last choice, not your first. To thrive,digital has to permeate throughout the organization. Loading up on selectprojects means you are probably missing others while facing diminishingreturns on the ones you are milking now.
3. There is only one next step: As we talked about with the SevenChallenges, developing alternative strategies is critical for success. Usingall views, not just a rear view, to design your future direction is vital. Aswe have seen in our interviews and research, successful firms seek thebest paths and try out many before locking in a flexible strategy for
digital transformation. This approach has led many organizations togetting multiple wins simultaneously with their efforts, as well asfallback positions should one not deliver.
4. It feels simple, so let’s leap: In our research on successful digitaltransformations, we asked executives and leaders if complexity causedissues. Thirty-seven percent of respondents said they lacked informationaround the unforeseen levels of complexity involved in the process. Thiswas a key point for those who reported below-average results as well. Aswe have discussed, many times you don’t know what you don’t know,and understanding and building the right foundation is critical to yourorganization’s long-term success.
Master Time to Manage SuccessfulTransformationsTime and resources are precious. Understanding and incorporating newconcepts across the organization drives intent and agreement on outcomesas well as next steps that can drive or hinder longer-term success. To getthis right, you need to recognize that there are aspects of the business anddaily work you need to stop or do differently.
“Whether you are a startup, a large corporation, an individualathlete, or a collective team, human performance depends on oneof our most precious and fragile resources: time. So, if we canreally get our arms around this idea that time, meaning thismoment, is our most precious resource, we are likely to struggleand not perform at our best. Time is the vehicle in which weexperience life and relationships and where performance isexpressed. So if we can help our individual performers increase thequality and frequency in which they experience moments, thenwe’re going to have a dramatic increase in output.”—Dr. Michael Gervais, consultant to world-class athletes and
teams, cofounder, Compete To Create Consulting
The insights below cover the four areas we recommend you use.Additionally, there are four facts and reasons why you need to do thisexercise, based on the research from our digital transformation work:
34 percent of digital transformation activities have not met theexpected results. Only 21 percent exceeded expectations.
32 percent of executives argue that failure to respond or react tostartups in the next two years is greater than today. We need to findways to do things differently in order to respond better.
40 percent of executives told us that if they are not fully digitallytransformed in three years, they will not be highly competitive.
On the more positive side, executives and leaders believed that ideasincluding near real-time products, the wider access to information thatcustomers have, and the new match of innovation and efficiency areopportunities more than threats on a 3:1 ratio.
Telling your teams or organizations to be better with time is whollyinsufficient. If they could be more efficient, they would. As leaders, weneed to identify the organizational issues and processes that rob time fromour people and teams. In far too many cases, this is a collection of tasks andtactics that once identified can either be removed or greatly truncated.
One solution is the Stop/Start/Do Differently method. As we mentionedearlier, you simply ask what you can stop, start, or do differently throughoutthe business. The key is to use a framework like the one that follows to findthe time and effort wasters across—
1. Relationships and interactions
2. Resources and allocations
3. Questions and focus
4. Outcomes and activities
With this framework and the following instructions, you will be able toidentify the key elements that drag down productivity and waste time.
Digital Transformation Tools
THE STOP/START/DO DIFFERENTLY EXERCISEAs mentioned, the secret to getting time back and prioritizing your team’sor group’s efforts is to ask the right questions within the right framework.This simple exercise is designed to help you do just that while enablingyou to achieve dramatic results. We have used this exercise numeroustimes with our clients, and in every case it has yielded insights that haveimproved productivity and focus. The secret is to work with a smallgroup of colleagues on one major digital transformation issue at a time.
This works best in a conference or large room where each teammember can use Post-It notes to share their thoughts. We recommendusing a different color for each of the four topics above. The leadershould make sure that as a group, equal attention is placed on what tostop, start, or do differently. The key is for teams to give up and/ormodify something in the end before adding a new item as time andresources are scarce.
Figure 6.3: The Stop/Start/Do Differently Exercise
There are five takeaways you want to get out of this exercise based onthe experience of doing this with hundreds of C-level and departmentalleaders:
1. Focus on the stop items first. As mentioned, you cannot just add moredigital and be successful. As the leader, you need to be prepared toremove new items and should push to have at least 30 percent of yourfinal items fall under stops.
2. The “Questions and focus” category is the most important area for mostorganizations because it drives how you collaborate and design yourfuture. Spend 50 percent of your time in this section, and you may wantto start here when discussing the team’s thoughts.
3. Be prepared to come up with a clear action list of three to five items torally the team and focus efforts. Ideally, you should allocate teams toeach key item and provide them with additional time to affect changesand coordination. Do not make this an optional add-on to their workloadsor it will not happen.
4. Narrow down the suggestions and thoughts, as many of these willprobably fit into similar issues and ideas. As you do so, build consensuswith the group on the final ideas, categories, and solutions.
5. Get the final list of ideas that the team agrees are most important and willdeliver the greatest impact. Publish the list in the chart above socolleagues can see the process. The list will show the range of insights,but more importantly, it will stimulate their thinking and help get othersinvolved in the project.
Success Breeds SuccessIn our recent digital transformation research report, we discovered that justa little taste of victory in digital transformation can propel more success fororganizations. The numbers are compelling across a vast array of businesscriteria. Here are a few of the findings:
Organizations that spend more than $2 million a year on digitaltransformation are three times more likely to exceed expectations.
Businesses increasing their focus on digital transformation in the nexttwelve months were twice as likely to exceed expectations.
57 percent of digital leaders said success enabled them to greatlyexpand digital efforts.
49 percent of digital leaders reported that digital helped theorganization integrate new technologies to improve business results.
49 percent said digital success helped them identify and solve keyproblems they were not yet focused on.
It is not surprising that success breeds more success. The key is thatsuccess in digital accelerates success and growth while springboardingmore digital projects. As these statistics show, success is due to thecombination of digital transformation delivering on its promise to driveefficiency as well as helping to identify new areas of improvement.
The true promise of digital transformation is to remove the trade-offsbetween cost, efficiency, and innovation. Leaders who architected fordigital success saw and continue to see the results snowball as technology,teams, and the organization find value and build on it. Organizations thatsaw less than expected or no success found themselves battling against theexpectations, metrics, architecture, and other challenges. This,unsurprisingly, led to a pullback in digital and a reevaluation of the process.How have leaders reacted when digital projects hit road bumps in yourorganization, and do you think they could have been handled differently?
PART 3
THE DIGITAL FRAMEWORK FOR SUCCESS
H
CHAPTER 7
THE DIGITAL HELIX: ANINTRODUCTION
“If you want to understand function, study structure.”—Francis Crick, codiscoverer, with James Watson, of the structure of the
DNA molecule in 1953
istory teaches us that retrofitting only goes so far. Every generationalshift has involved trying to retrofit historical ways of thinking and
acting into a new world. Roads built for horses were patched to work forcars. Sailboats were given copper bottoms and retrofitted with steamengines to speed them up to compete. At a certain point, retrofitting wasn’tenough. Steam ships were completely redesigned to surpass anything aretrofitted sailboat could do. Cars became far too powerful for dirt-pavedroads built for horses, so highways were built. The same is true of thedigital promise. Retrofitting can only get you so far. At some point, youneed to think and act differently in order to take full advantage of all thepromises laid out by the Digital Age. Success for brands like Amazon,Google, Facebook, and others shows how digital-first thinking drivesexceptional results.
“The people that are most likely to get, understand, accept, andeven embrace what digital transformation can mean are peoplewho take history seriously. These people take the future seriously,
because they can understand intellectually what history andsituational awareness mean to the economic means of production,the economics and the cost associated with them, and changeitself.”—Michael Schrage, research fellow at MIT Sloan School’s
Initiative on the Digital Economy, oversees research ondigital experimentation and network effects, and is author ofThe Innovator’s Hypothesis
Social Media Shows Us the Gap betweenRetrofitting and Architecting for SuccessIn an age increasingly dominated by a digital-first mentality in design anddelivery, many corporations have tried to retrofit themselves into a new age:technology infrastructure, culture, skills, metrics, and even moreimportantly, go-to-market communications and marketing. Maybe the bestexample of this is the social media revolution we are seeing inside thisdigital migration.
Few, if any, executives and senior managers of Fortune 1000–levelcorporations would disagree that social media, when done right, can inspireconstituents and deliver true, long-term value to organizations. In fact, 87percent of executives are positive about the potential of social media as amarketing and communication tool.1 However, when we measured acrosseight separate economic impact metrics and more than twenty separatetypes of social media engagement, only 16 percent of Fortune-levelcorporations believed they had sustained strong economic returns. Between2012 and 2013 the gap between those doing social media right and thosetrying to retrofit social media with old ways of thinking and actingballooned. In 2012, the winners were four times more successful than thelosers. In 2013, the gap went to eight to one. The winners doubled the gapbecause they got social media right from a thinking, infrastructure, andexecution process.
Winners Have Unique DNA
The analogy of retrofitting sailboats or of paving horse roads for cars makessense here because we have tipped past the point where retrofitting ourorganizations to win at digital makes logical sense. Initially, one might havebeen able to become a little faster, and retrofitting might have been able tokeep an organization from falling too far behind. But in the Digital Age,organizations need to build from the ground up to have any real shot atcompeting and winning.
Almost without exception, business leaders said digital matters, but itmust be done right to yield results. The promise of embracing digital in theright way can be seen by the 16 percent who get exceptional results fromtheir social media strategy and execution. We have discovered there arecombinations of elements, like DNA, that are key indicators for success. Indigital, the elements are behaviors, organizational design, tactical focus, andeven metrics models that differentiate from one group to the next. Muchlike DNA, seemingly miniscule differences in an organization’s DNA leadto dramatically different and, in some cases, better results. To use the shipanalogy again, the very act of designing without thinking about a hugemainsail showed and enabled dramatic changes in architecture, intent, andcapabilities of steam ships.
“The DNA of all organizations is changing, and increasingly, theways that we demarcate between big and small, commercial andnonprofit, and government and citizens are blurring. Ultimately,the organizations that will be most successful are hybrids thatidentify the best approaches, regardless of domain, and then workto empower their workers with the kind of mission and passionneeded to both excite their stakeholders and deliver meaningfulresults.”—David Bray, CIO, Federal Communications Commission
Reimagining what a great ship should look like and how it could behavewas key for success during shipping’s transformation. Similarly, buildinggreat road systems for cars looked quite different from building great roadsfor horses and carriages. Effectively, the shape of solution was substantiallydifferent from one generation to the next.
“Virtually everybody’s transforming, but only half of theorganizations and their leaders know what they’re transformingfrom and to. But every C-level leader and board wants to be there.But to get there, you have to master digital channels, data andanalytics, social; create a culture of transparency; develop internalcapabilities to implement; and then, leverage all the opportunitiesthey bring. And then, at the end of that discussion, hopefully, is thetechnology discussion. But with all of this you need a frameworkto bring it and keep it all together. Without getting everything setup right to build and use the transformation to grow and win,organizations just take a leap of faith on a road that is headed downan enviable digital path. And that is a scary proposition.”—Bruce Rogers, chief insights officer, Forbes
The Digital Helix Was BornResearch shows us that there are seven key elements that describe whatmost successful digital organizations focus on and prioritize. These includeworld-class digital marketing and communications, product development,and service and support, all working in concert with each other. In addition,successful and truly digital organizations have everybody working togetherand responsible to each other since insights and information must beconnected to deliver for the customer. These seven key elements of theDigital Helix are interconnected to provide the lens from which customer,product, organizational design, marketing, and sales decisions should bemade.
Figure 7.1: The Digital Helix
They are:
1. In the successful digital organization, the executive is not simply thenavigator and mapmaker for the corporation. The executive needs to gobeyond and become an active explorer of the new frontier to discover allthe possibilities. Digital done right means embracing the need forconstant learning and ongoing experimentation and enabling theorganization to succeed at the nodal level. Executives need to lead byexample and not just dictate. We call these executives “Digital Helixexplorers.” Explorers see things at both the micro and macro levels andshould flourish in multiple dimensions, when given the opportunity,while constantly strategizing for their organization’s actions. They see theworld as a series of adjustments and not just a center of command andcontrol. They use digital tools to move quickly, see below the surface,and react swiftly to changing conditions.
2. Information flows in connected ways both horizontally and verticallyacross the organization. Knowledge is gained from constant interactionswith customers and the market. This sharing and transfer of informationenables value and creates opportunities that are often left by the waysidein traditional organizations. We refer to this seamless and pervasive useof insights as themes and streams. Digital Helix organizations seeinformation as two intertwined flows—inputs and outputs—which areconsciously searched for but randomly found. These flows are no longercontradictions or torsions but synchronous processes. The goal is to findkey streams where they matter and become relevant while learning toback off and adjust when they lose relevance. Information is a constantlyevolving landscape that needs to be remapped continually so that userscan focus only on what is needed and not become overwhelmed by thenoise.
3. Marketing has seen that customers have various and differinginteractions. Some consumers can be directly driven and guided, butothers require the ability to react. Some even focus only on listening,learning from, and utilizing those interactions throughout theorganization. We refer to this collective customer interaction as theexperiential portfolios of customers. Organizations should knoweverything customers have in their portfolio of experiences butunderstand that only certain aspects of the portfolio can be owned,rented, or acted on by the organization. The new goal of a Digital Helixorganization’s marketing is to build each of these experiences into acollection of inspiring brand moments. Historically, the analog methodwas designed to blindly sell, ignore, or resolve the transaction with eachinteraction. In the Digital Age, enhancing, rewarding, and enrichingbecome the new goals for interactions. Digital tools and ideas enable usto see, understand, and act in near real time and use the customer’s ownexperiences to help build value for their portfolio.
4. Marketing and communications professionals tend to focus a lot onjourneys, campaigns, and programs. However, the digital-first customerlives in flows of information and virtual experiences across multipledevices. Organizations that attempt to be part of this flow and seek tolearn how to navigate the individual’s interactive cycle see more returnthan old-style entities that rely on trying to interrupt the customer
mindset with a campaign, program, or by simply responding. We call this“using marketing and communications as a flow.” Marketing should nolonger be a single moment but instead a set of complex interactionsdesigned to inspire and fold the brand more naturally into the flow as thecustomer designs it.
5. Sales professionals, whether direct or channel based, have always soughtto be intimate with the customer. The stronger the relationship, the higherthe chances are for increased sales opportunities. In reality, sales shouldsee key moments with the customer as opportunities to enable customerswith information that drives the relationship. In the Digital Helix, werefer to these opportunities as “sales as connected moments.” Using theDigital Helix, the sales process is based on knowledge of the customer’sinside and outside needs, interests, and desires. Nobody likes to be soldto, but everybody wants to buy. Using digital knowledge tools in nearreal time, Digital Helix sales interaction becomes the art of solving theproblem versus simply selling.
6. In successful digital organizations, everybody is responsible for eachother across the organization. The shared vision, information, andapplication of our internal and external interactions, as well as how welisten and come together, is vital to success and being able to outpace thecompetition. Without this collaboration, we miss too many powerfulinsights, actions, and opportunities. We call this “all for one, and one forall across the organization.” This element can only work if all thecomponents inside the organization are fluidly connected around thethemes and streams that matter. All humans want to do the right thing.The Digital Helix organization uses pathways, receptors, and rewardsthat empower sales to happen naturally and in near real time.
7. In the digital world, every interaction matters, and all are equallyimportant. These interactions build on each other and offer a chance toinspire when done right or detract when missed or handled poorly.Organizations need to be able to work beyond the singular moments andmake the most of each connection, while simultaneously looking andthinking about what the customer might need next. Understanding thisand embracing the concept of constant regeneration is vital to building afoundation of success and achieving scale for the future. We call this “alltogether and one step ahead.” Many great leaders argue that there are no
big moments, because all moments matter. The Digital Helixorganization recognizes early signs of opportunities and issues andrapidly adjusts course as needed. Digital tools for insights, collaboration,and action allow for near real-time actions. But to truly gain competitiveadvantage, a shift in philosophy needs to occur so that organizations canuse the tools to their full potential.
The new Digital Age requires that organizations not only execute andmeasure their operations differently but also reevaluate how to rewardbehaviors and hire for certain skills. These seven components will helpguide you and give you a framework to embrace the Digital Age the rightway, for long-term success. Can you begin to identify how yourorganization would look and perform if you fully embraced the DigitalHelix?
CHAPTER 8
EXECUTIVES AS DIGITAL HELIXEXPLORERS
T
“If things seem under control, you are just not going fast enough.”—Mario Andretti
his chapter goes into more details about what it takes to makeexecutives true digital leaders by using the Digital Helix for success.
The key idea here is to look at the underlying evidence far more critically inorder to help you and the organization navigate toward being the criticaldrivers for digital transformation.
“If you’re not stubborn, you’ll give up on experiments too soon.And if you’re not flexible, you’ll pound your head against the walland you won’t see a different solution to a problem you’re trying tosolve.”1
—Jeff Bezos, CEO, Amazon
To ensure the executive function delivers and helps the organization’sdigital transformation effort to thrive, we need to first look at two aspectsthat help determine success:
1. Executives need to expand their sensitivity to information and identify themost important elements in order to orchestrate the transformation in theright way. This expansion of information goes far beyond the keyperformance indicators most look at and requires a different set ofleadership traits to shine.
2. Executives need to be increasingly capable of focusing on the potentiallysmall and different elements that drive effective digital transformation. Indigital, many times the size of an activity does not define the magnitude ofits significance or capacity to make the results far greater than the sum ofthe parts.
What You See Is Not All There Is—Explorocracyin Practice
As mentioned, the value of any digital transformation has to far exceed thesum of all parts. Short of this goal, results are at best mixed and at worstfailure. The executive’s job is both proactive and guiding. Executives whosit back, review, or question results, in most cases, doom their organizationsto fail. As we have seen from almost every digital transformation researchstudy, the chance of true economic success is less than 30 percent. Inbusiness, sports, or almost any other scenario, this especially high chance offailure is unacceptable in anything but the direst situations.
Risk management is undoubtedly an inherent part of the executive’s role.But when the chances are one in three against you and your organization,executives are not really managing risks. Instead, they are wagering againstthe odds in a rigged game. Thinking of it this way, the odds are roughly thesame as having a 30 percent chance of hitting the fairway with every golfshot. Over the course of eighteen holes, you have little to no chance forsustained success. Even if at every hole you started out with a perfect shot,there would be a 70 percent chance you would miss the next two badly.Getting one or two digital projects to deliver while having the vast majorityfail will never allow the effort to be worth more than the sum of its parts. Inmost cases, these digital transformations are actually less than the value ofeach part. Due to various failures and the interconnected nature oftransformation, the organization winds up sliding backward. No matter thebusiness, the executive needs to be the one driving the ship toward successand not just judging it at the end. So how do executives increase their digitaltransformation success rate? The secrets are a combination of noticing moreand looking for what is not there.
First is the power of noticing what is happening beyond the surface level.As much as it takes precise skills to be a world-class golfer, the same is truefor the Digital Helix executive. In his book, The Power of Noticing, Max H.Bazerman talks about elements, such as motivated blindness, wherebyleaders can be distracted from looking at root challenges, true signals, orinformation that would enable them to make better decisions. Like a golfermight miss changing wind conditions or breaks on the green, executivesoften overindex on familiar metrics and miss leading indicators. Thesemissed signs can show not only how to course correct existing digitaltransformations, but more importantly, where to invest in the first place. Thekey elements that drive executive leaders to be successful in the DigitalHelix are complex, but given the overindex on data we have talked about
elsewhere, being able to work outside traditional definitions of leadership iscritical. Being an explorer is now more vital than ever.
“The best leaders are ‘first-class noticers.’ This means they payclose attention to what is happening around them. They see thingsthat others miss.”2
—Max H. Bazerman, author of The Power of Noticing
The other key is looking for information, data, and patterns that are notreadily apparent or familiar. This is how decision-making and leadershipbreak down inside seemingly great organizations. In his book Thinking, Fastand Slow, which sums up his life’s research on human judgments anddecision-making, Daniel Kahnemen, a Nobel Prize–winning psychologist,talks about a concept called “What you see is all there is” (WYSIATI).Kahnemen explains that the benefit and curse of WYSIATI is that it allowsus to make sense of partial information in a complex world. The coherentstory this method generates is often close enough to reality to supportreasonable action but shields us from looking deeper. Kahneman explainsthat WYSIATI induces a number of systemic biases, such as overconfidenceand framing effects, which create fundamental flaws in human judgment.
“The idea that the future is unpredictable is undermined every dayby the ease with which the past is explained. Thus, we can be blindto the obvious, and we are also blind to our blindness.”3
—Daniel Kahneman, author of Thinking, Fast and Slow
How does WYSIATI impact digital transformation efforts? Many timesthis concept prompts a tendency to accept the first thing that occurs or thefirst thing we see. In digital transformation, WYSIATI promotes quickdecisions and entrenches the organization into a single view of whatinformation we need or should use to make critical decisions. This viewlocks the organization or team into one prescribed future from the outset,often based on little information. Within your organization, how many timeshave you witnessed teams and executives blind or unwilling to contemplateand evaluate alternative strategic options due to the information in front ofthem? If we’re told that certain metrics or data are all that matter, there is a
high likelihood that any new digital system will either reaffirm this belief orbe labeled a failure, no matter the benefit.
Executives must leverage the explorer’s mindset to check naturaltendencies and go well beyond the first “truths” and the surface-levelfamiliar that is in front of them. As an executive, your key responsibility isto go far beyond what’s normal and explore new paths. This explorationallows you to not only find new possibilities but also to chart the best courseforward. Like a great explorer, the executive needs to explore the unusualand strive to look for information beyond where one might normally look.Digital, as we have said, changes many aspects of a business. One of theseareas is decision-making. Executives who thrive in this environment arethose who consistently seek more information and push teams beyond thequick and usual. This skill is key to changing the odds and successfullybetting on the future of your organization.
“We have to establish our credentials as an explorocracy; so tosurvive and rule ourselves, we have to explore.”4
—China Miéville, author of Embassytown
From our research, we found the act of comparing two similarorganizations gives us a near perfect way to review the economic differencesin performance between groups of organizations. This is the closest to aceteris paribus comparison as is possible. Leaders showed incredibleeconomic returns from everything from brand to sales, marketing,collaboration, HR-related issues, and even ROI. By comparison, lowerperformers with near identical designs achieved six times less economicreturns.
By using an index for each of the eight variables for economicperformance, we can see how radically different the outcomes look forsimilar profiles. Using a baseline of 100, leaders outperform others by morethan eight to one in margin gain and revenue and by about five to one inmarket share and brand value. Remember, this is looking at similarorganizations and segments or markets.
How do leaders achieve these remarkable gains? Of the 174 variables wereviewed, a number of small but critical variations illustrate the differencesbetween an organization with a highly driven explorocracy at an executivelevel and one without. While some of the actions may seem similar, these
small differences illustrate and in many ways amplify the magnitude of theresults.
Executive Explorers Value the Journey and the PathExecutive explorers promote and push boundaries because they value thewhole process of exploring. It is this appreciation for the journey and thepath that causes them to invest in new forms of listening and to run extensiveexperiments far more often than their lower-performing peers. But it is notjust the new elements and challenges that explorers value. Executiveexplorers crank out trainings twice as often as well. This explorer mentalityshows how the best performers value and need data and information, whileempowering individuals to use and leverage these resources across theorganization. Additionally, explorers do not see legality and governance asconstraining forces. These leaders use legality and governance as guidepoststo chart their journey rather than view them as excuses for not pushingforward in certain directions.
“CEOs either ‘go with their gut’ or push people to be more ‘datadriven.’ This tends to be very crude. A more effective heuristic iswhen people in the organization interact with their leaders, do theyfeel smarter or do they feel stupider? The answers will show if theteam as a whole is there to be servants to a vision or empowered bythe vision to collaborate, share, and explore and experiment indifferent ways. Transformational leaders seek the latter and areconstantly looking for the new to explore.”—Michael Schrage, research fellow at MIT Sloan School’s
Initiative on the Digital Economy, oversees research on digitalexperimentation and network effects, and is author of TheInnovator’s Hypothesis
Executive Explorers Enable, Embrace, and then MandateWhile every organization trains its people and teams on policies, executiveexplorers use trainings to empower and push employees to succeed bymaking their own decisions based on these policies. Executive explorershelp employees execute social on their own by setting clear KPIs that tie
back into business objectives. In addition, explorers push to have other C-suite members actively engage in strategy and counsels with their teams todrive both thinking and integration. These factors, in combination withexplorers investing more than lower-performing peers in internal platforms,show that executives set up repeatable frameworks that promote action, risktaking, and compliance with the organization’s objectives.
“Risk-taking is required to learn. To express or demonstrate whatwe’ve just learned is the risk-taking process. So environments andleaders that really value taking a shot and ‘going for it’ driveorganizations and people to become curious and interested in whatmight be, as opposed to being fearful of what might not work right.”—Dr. Michael Gervais, consultant to world-class athletes and
teams, cofounder, Compete To Create Consulting
Executive Explorers Realign and Rehire as NeededExecutive explorers hire like other executives, but they are far more willingto accept and push for change and make needed shifts on the fly than theircounterparts. They seek to rightly add the best skills to match their needs asthey change and evolve. One way that this is achieved is through the use ofexternal partners. Explorers add new or realign existing partners far moreaggressively to get the right skills and mix for the organization. In socialmedia, explorers are 35 percent more likely to have external vendorsmanaging resources. These facts clearly show that these executivesunderstand the new digital world demands and how to let go of some aspectsto enable others.
“We hire with a digital vision in mind. By embracing this digitalmindset, we didn’t have to retool or reskill at all, and that is whatsets us apart from others that have tried to embrace digital along theway. Anytime you add new people and skills to legacy operationsthat are changing you are going to have significant issues withreskilling and culture change. But because we started down thisdigital path the right way, we were able to hire in people that hadthe appropriate skill set and mindset to deliver the results weexpected.”
—Larry Scott, commissioner, Pac-12 Conference
Explorers Let Go and Seek MoreExecutive explorers understand and embrace the power of others to drive thejourney, both farther and deeper. By actively engaging others, explorers findnew ways to empower members of the organization to start their ownexplorations and journeys. If we look at social transformation, we can seeexplorers absolutely overindex on every facet. They are 65 percent morelikely to talk about social and digital transformation with their peers andpush board members and teams to actively drive wider transformationinitiatives.
“When people forcibly take control, you get an impedancemismatch, where even greater barriers are created. The best analogyis attempting to climb Mt. Everest alone without the right tools,resources, and information. There are thousands of variables thatwould take you a lifetime to learn in order for you to survive andthrive on your journey. You need guides, Sherpas, or catalysts tounderstand the goals, environment, and what is required to besuccessful. This broadening and widening of the team with expertsin different areas makes a significant difference. This is how wedevelop deeper relationships while getting the best results andavoiding making costly mistakes.”—Vanessa Colella, head of Citi Ventures and chief innovation
officer of Citi
Becoming a Modern-Day Lewis and ClarkTo become a Digital Helix executive explorer requires constant vigilance ofyour time, attention, language, and actions. Much of the new digital world isnot mapped yet, and as brands move forward, study after study shows nomore than 30 percent get digital transformation right economically. Tobecome your organization’s digital version of Lewis and Clark, you need tothink about experimentation in knowledge, resource exchange, and mappingsuccess. Exploration at its best isn’t about the leader, it is about howexecutives enable others, empower differences, and push boundaries for
themselves and others. Great executive explorers understand the power ofbuilding new and reskilled work forces and adding new dimensions ininsights, and most importantly, they bring a constant energy of purpose to allaspects of digital transformation.
“Ambition leads me not only farther than any other man has beenbefore me, but as far as I think it possible for man to go.”—James Cook, English explorer and cartographer, 1728–1779
Digital Requires Executives to Develop Three NewSkills or Tendencies RapidlyExploration in the Digital Age is about the combination of three differentskills beyond those that dominate traditional leadership roles. In thenondigital era, leadership tended to center on operational efficiency, bettergrowth than competitors, and planning differentiation for long-term benefits.However, in a world of ongoing transformation, leaders must use a newcompass to guide them. Through our research and experience, we haveidentified three key skills that help separate great digital explorers fromlower performers.
Accept risk in information and enablement because it shows realambition.Playing it safe almost always guarantees lower performance. Accepting riskand pushing beyond comfort levels is required to deliver high performancein any situation. This understanding enables digital explorers to trust andtrain those for the new digital mindsets and skills that dominate startups.Fortune organizations have vast pools of capital, external partners, ITresources, and market segments. Organizations have to understand that to besuccessful, there is room for both risk and using old and new information tohelp provide the essential indicators for the digital world. The key is toidentify what is best for the path and vision you have. Not all information isborn of equal importance, and the ability to separate noise from signals isvital, especially as older signals become potential noises. As we have
discussed, brands that consistently miss the key signals and indicators missmarkets, miss opportunities, and miss their chance for the future.
Actions drive results; mandates drive inertia.Actions vastly exceed mandates by almost ten to one in successfulorganizations. When we look at all the attributes of success, actions likeinvestment and coordination from executives are ten times moreeconomically productive than those organizations that are led by flag-waving mandates. Setting up a small project can help, but all that does israise a flag in a place where most have neither the equity nor experience toexecute. It might be far more appropriate for an executive to use Salesforceand Radian6 than focus on his or her own social presence.
The currency of new information and experimentation is vital.Great golfers take calculated risks to win and beat the competition.Executive explorers need a similar disposition with experimentation. Thekey is to teach others to take calculated risks but without guaranteeingsuccess. Explorations should motivate others to explore because the DigitalHelix organization works only when all seven components interconnect andare empowered.
For executives to truly become digital explorers they need to open uptheir view of what is the right information for success and ensure they arenot simply seeing select indicators of performance or feedback. By adding ina measure of risk taking with experimentation, executives can plot smartactions based on their organization’s successes to deliver results that are fargreater than the sum of their parts.
What are the steps leaders can take tomorrow to start becoming DigitalHelix explorers and accelerating transformation from the top down?
Digital Transformation ToolsTo get you thinking like a digital executive explorer, here are a set ofquestions to ask yourself to determine your leadership and organization’scapacity for exploration. Think about these eight questions as they relate toyour own organization so that you can understand the power of the executiveleader as an explorer. True digital executive explorers can answer a
definitive yes to each of the questions. In reality you or your executiveleadership will have a mix of tools you already use and others that needattention for the future.
1. As the leader, are you actively looking at streams and themes ofinformation, or are you focusing on KPI dashboards as a key managementtool?
2. Are you dedicating a significant amount of time each week to becomingmore digitally articulate and experimental?
3. Have you changed the way you interact and give advice in a more digitalworld?
4. Have you been developing new skills for you and your colleagues, as wellas promoting new skills development to the wider workforce?
5. Are you pioneering new rewards systems that drive a more Digital Helixculture around you?
6. Has your language changed and adapted to be digital-centric?
7. Do you have one nagging issue that, if overcome, could help migrate theorganization to more of a Digital Helix?
8. Does your organization have many examples of thinking and behavingdigitally first?
Digital Transformation PerspectiveWhat happened? The hierarchical model simply doesn’t work anymore. Thecraftsman-apprentice model has been replaced by learning organizations,filled with knowledge workers who don’t respond to top-down leadership.Seeking opportunities to lead, young people are unwilling to spend ten yearswaiting in line. Most important, people are searching for genuine satisfactionand meaning from their work, not just money. For example, many employeesare motivated by their company’s mission when it attaches itself to socialand personal goals.
In response to these changes, a new generation of leaders is reshapingthe best-led global companies. Authentic leaders focused on customers arereplacing hierarchical leaders who focus on serving short-term shareholders.An example of this type of leader is Unilever CEO Paul Polman, who
recently told the Financial Times, “I don’t work for the shareholder. I workfor consumers and my customers.”5
CHAPTER 9
R
THEMES AND STREAMS FOR INSIGHTSIN THE DIGITAL HELIX
“Distinguishing the signal from the noise requires both scientific knowledgeand self-knowledge.”
—Nate Silver, editor in chief, FiveThirtyEight
emember when your children taught you how to program a VHS backin the early 1990s or set up the remote control for you? Think about
five to ten years ago when your adolescent kids helped you set up youroriginal social media accounts or showed you how to use your smartphone.Insights and ideas on how to do things in the right way don’t always comefrom the support documents or from help files on a forum. In short, theseand many more examples show how individuals are often programmed toreceive and manage information. These set ways, based on how we learnedto gather and parse information, can limit our ability to respond to newsituations in an effective manner and create bias toward what we hear, see,learn, and do. Conversely, children can handle new and different challengesoutside prescribed norms because they have the ability to focus on new andlimited but incredibly powerful pieces of information without trying to fitthem into preprogrammed processes.
In reality, individuals look for help and insights that tend to haveimmediate value or are immediately gratifying in some way. This processusually starts by using familiar sources and then filtering from there.Children, on the other hand, have remarkable capacities, often described asset shifting, that allow them to adapt to changes in the environment byswitching from one mental set to another. This ability enables children tothink through apparently complex challenges in simple ways and to cutthrough the legacy thinking and experiences that adults use to perform thesame functions.
This personal or individual bias toward the familiar is also present at anorganizational level. When you add this to the myopia based on urgency anddelivery that exists in most organizations, you can clearly see why it is toughfor organizations to think differently about the value and sources forinformation and decision-making. This effect and resulting bias are theconundrum that is at the heart of the theme and stream component in theDigital Helix. But overcoming this legacy sourcing and thinking is and willcontinue to be a critical function for successful digital transformations, sinceinformation and data are key drivers no matter the initiative or desiredoutcome.
“We have moved from a fairly linear, non-real-time model wherethere was a lag effect between the time that we would receivefeedback from our members and the time that it was synthesizedand presented in a digestible format. Our new model is the ‘voice ofthe member’ model, which brings in multiple forms of memberfeedback and works to synthesize that feedback on a real-time basis.We have a series of tools that combine up to twenty-five differentsources of member feedback across channels and touch points into acommon tool. We use that tool to look for trend lines, to look foranomalies, and to do a lot of analysis and hypothesis testing aroundwhat our members are telling us and where we have issues that aresystemic in nature. We use the ‘voice of the member’ feedback tovalidate what our member behavioral data tell us. ”—Chris Cox, head of Digital Experience Delivery, USAA
This chapter is designed to solve three challenges most organizationsseem to suffer from when it comes to information themes (what theinformation is) and streams (the channels of the information that bothinternal and external groups use) in the digital enterprise:
1. 87 percent of organizations are investing in listening activities.
2. Most brands and groups see generally poor performance from theirlistening centers.
3. Only 35 percent of organizations realize a measurable net return fromlistening.
The paradox here is that most understand they need to listen (87percent), but few (35 percent) can show real value from their efforts. TheseFortune-type organizations are investing heavily in listening activities,usually with elaborate command centers and multitudes of data sets comingin to show they are listening. Yet for all the social and digital listening andthe customer information available at an organization’s fingertips, most findsuccess and/or value is elusive. While there are any number of reasons forthis, three key questions should be or should have been asked and answeredto focus efforts and thus results:
1. How do we change the framework for information from architecture todelivery to extract value so that what we get delivers exponentially greaterbenefit than ever before?
2. What are the best practices for evolving how information is sourced andused that builds a competitive currency across every dimension of theorganization from employees to partners to customers and any other bodywe care about?
3. What are key indicators for success or failure we should focus on as webuild our theme and stream approach?
From Telescope to Living MicroscopeIn the pre–Digital Helix world, organizations went out searching forhistorical information and sources. This telescopic view most often involvedcollecting or even constructing findings via research and surveys. The onlytricks were the illusions of finding the right representative samples of peopleor data and carefully looking at minimum statistically significant cells withmoderate or even ridiculously low frequencies. This was, and in some casesstill is, the nature of information gathering and even simulations. Samplesizes in the millions or testing and measuring hundreds of alternatives innear real-time was unfathomable due to costs and timing that would haveproduced findings long after the insights were needed. Digital not onlychanged this but also made it both feasible and cost effective to testhundreds or thousands of parameters in real time and to provide insightsequally fast. In fact, brands, organizations, and even political campaigns areusing this ability right now to query and test any number of variables,
designs, and hypotheses they want moments after the thought pops into theirheads. This living feedback can be and often is an interactive affair wherebrands and groups test and solicit conversations and insights from thecustomers and constituents they serve in real time. This is the livingmicroscope where you can see the integrations, and it is the essence ofthemes and streams. Both the act of asking but also the undertaking oftapping into the places where people live online provides the rich, useful,and hyper-relevant insights needed to handle another aspect of the DigitalHelix, in the moment and one step ahead.
In the digital era, sources and streams are everywhere. The real questionis not about where and what to look for, but rather how do you zero in on thekey nuggets that can impact your organization today and set the course forfuture growth?
Think of the odd contradiction we now have. Data and information isvoluminous and everywhere, yet when you can find everything and trackanything, what do you look for and follow? We live in a world wherezettabytes of information are generated in weeks or days, if not minutes.Additionally, we can track, find, or follow how almost anything happensonline via cookies and IP addresses, among others. All of this givesorganizations tremendous power and a breathtakingly clear lens to tell us theexact moments that the most microscopic things happen. Think we arekidding? Read these three examples:
1. Netflix knows exactly the time you start to binge watch a show and isdeveloping shows to meet a formula to get viewers hooked faster.
2. Grocery stores know what you are going to buy many times before you doand provide coupons to push brand choices for your next trip.
3. The New York Police Department knows where, when, and what types ofcrimes are most likely to be committed in the city and deploys policeaccordingly.
All of this shows how themes and streams are occurring and smartorganizations are monitoring, analyzing, and tapping into these insights totake action. It is not that the information is completely new or organizationswere completely unaware. Rather, leaders have figured out that increasingamounts of information requires increasing scrutiny of what is valuable
(signal) and what is a distraction (noise). This key action enables successfulorganizations to move forward faster and be successful.
Digital Transformation PerspectiveUsing increasingly granular data, from detailed demographics andpsychographics to consumers’ clickstreams on the Web, businesses arestarting to create highly customized offers that steer consumers to the “right”merchandise or service—at the right moment, at the right price, and on theright channel. These are called “next best offers.” Consider Microsoft’ssuccess with email offers for its search engine, Bing. These emails aretailored to the recipient the moment they’re opened. In two hundredmilliseconds—a lag imperceptible to the recipient—advanced analyticssoftware assembles an offer based on real-time information about him orher: data including location, age, gender, and online activity both historicaland immediately preceding, along with the most recent responses of othercustomers. These ads have lifted conversion rates by as much as 70 percent—dramatically more than similar but uncustomized marketing efforts.
Companies often test offers through multiple channels to find the mostefficient one. At CVS, ExtraCare offers are delivered through kiosks as wellas on register receipts, targeted circulars, by email, and recently, via couponssent directly to customers’ mobile phones. Qdoba Mexican Grill, a quick-serve franchise, is expanding its loyalty program by delivering coupons tocustomers’ smartphones at certain times of the day or week to increase salesand smooth demand. Late-night campaigns near universities have seen anearly 40 percent redemption rate, whereas redemption rates average 16percent for Qdoba’s overall program. Starbucks uses at least ten onlinechannels to deliver targeted offers, gauge customer satisfaction and reaction,develop products, and enhance brand advocacy. For example, its smartphoneapp allows customers to receive tailored promotions for food, drinks, andmerchandise based on their SoLoMo information.
These few examples show just a bit of the incredible detail in the petridish of living information that is available to almost any brand or group.More importantly, this vast array of knowledge and insights is growing andgetting more prescriptive. While volume was historically comforting, now itcan be utterly disruptive if not harnessed and parsed to provide value. Thismeans we have to ask ourselves about what really matters in the universe of
information we now have and what we should be filtering and seeking nowthat collecting and collating is infinitely easier than before.
The winning digital enterprise or agency needs to experiment, witness,and collaborate to find the right signals among the mass of noise weconsciously, and even unconsciously, collect every moment of every day.This is the new currency for success. When information is near perfect, onlythe near-perfect organizations will figure out what to focus on and how touse it for a competitive advantage. These are generally skills that need to betaught, experimented with, and constantly socialized across all parts of theorganization, as certain streams could have incredibly valuable insights atkey moments.
All of this shows that information is a constant flow. In the Digital Helix,the act of listening is not enough. You need to listen with intent and screenfar more than you pick up. The secret is understanding the three variablesthat drive success:
1. How you collect information may be more important than what youcollect and requires constant examination.
2. What constitutes value for pieces of information and how combinations ofdata and sources can be used to deliver even greater value.
3. How you decide to deliver and adjust information becomes vital.
“We only succeed if our customers succeed. That’s why theirinsights and feedback are invaluable to how we innovate at speedand scale.”—Karen Mangia, vice president, Customer Insights, Salesforce
A whole new science of applied information is just around the corner.The parlor trick with information in the Digital Helix organization is a set ofsequenced steps that allow you to amplify, glue, ignore, or enable newinformation to come in and then maybe out of the framework. It is thesethemes and streams that then become the focus for listening. The followingquestions are ones you should ask yourself and your teams frequently toincrease the value of information for your organization. Clearly, we wouldlike you to be able to say yes emphatically to each of these. However, weknow that there are different states of awareness and maturity. The best
organizations we have worked with or interviewed show strong performanceacross each of these seven areas:
1. Are you sharing cross-functional and departmental streams of informationfar more often than ever before?
“Our company is organized with the idea that we need to manageour enterprise information distribution strategy at an experiencelevel. By structuring ourselves this way we are able to betteridentify what we need to do to be successful as well as work acrossfunctions and channels to better meet our members’ needs within adigital framework.”—Chris Cox, head of Digital Experience Delivery, USAA
2. Can you quickly adjust information needs as you see behaviors andopportunities change?
“In 2009, Hallmark came to the realization that greeting cards alonewould not allow us to achieve our growth objectives. Thisrealization led to a shift in strategy to complement the greeting cardbusiness with other forms of growth through innovation. We knewwe could use the enormous trust in the Hallmark brand to ouradvantage if we had the right information at the right time and couldleverage it to shift our overall strategy quickly with our customers’new needs in mind.”—Lisa Macpherson, CMO/SVP marketing, Hallmark
3. Are all levels of the organization sharing ideas about themes forinformation?
“How would a better understanding of the people you’re trying toserve, internally or externally—understanding them, empathizingwith them—how would that help you make better decisions andbetter execute on your strategy? Listening to them, sharing storieswith them, and engaging with them—those are my three pillars ofvisual approximation and visual leadership. Can you listen, share,and engage?”
—Charlene Li, principal analyst, Altimeter, a Prophet company
4. How have you changed the way you interact with information to actfaster?
“Technologies like IBM’s Watson are able to ingest both structuredand unstructured data. This is incredibly powerful becauseunstructured data is the language of humanity. By understandingthis data we’re able to understand people as individuals with deeperand deeper levels of detail. This level of understanding is going tobe increasingly relevant in the future. We must ask our customers,‘How much more can we learn about you, and therefore, how muchmore relevant can we be as we serve you?’”—Jon Iwata, senior vice president, marketing and
communications, IBM
5. Is the organization developing new skills to handle informationdifferently?
“A lot of people come from Silicon Valley with in-depth techknowledge and knowledge of agile methods and DevOps, which isgood, but they don’t necessarily have the same appreciation for thefact that the value in becoming truly digital comes fromtransforming how the work is done and the skills that are needed tobe successful. Creating digital value across an organization meansyou must have the patience to dive into the existing processes andsay, ‘Is this process still necessary? If not, can we get rid of it? If itis still necessary, how can we make it faster, better, more efficient,whatever the case might be?’ This type of mindset requires atransformational skill set.”—David Bray, CIO, Federal Communications Commission
6. Are there new rewards that have been instituted to drive a more DigitalHelix culture around you in terms of information (gathering, dissemination,and analysis)?
“In the IT world with the kind of rapid change and complexity ofwhat we do, it’s less effective to try to micromanage or command
and control the people who are doing the work. You’re hiringpeople with technical skills that hopefully go beyond your skills, soyou can’t really tell them what to do, in a sense, because they knowbetter than you. What you need to be doing at the management levelis setting the vision, the target, setting up incentives that encouragepeople to move in the right directions, finding ways to communicatewhat the agency or the organization is trying to do, and thenmolding the behavior of those people.”—Mark Schwartz, chief information officer, US Citizenship and
Immigration Services
7. Is there a revised process to get new information into your currentmanagement themes and streams?
“We often talk about how we constantly need new skills and newways of working to be most effective. The ‘old school’ thinking isthat leaders know and have the right answers. To be successfultoday, we have to combine this thinking with curiosity and opennessto the idea of leaders not having all the answers and being willingand able to set the example of asking more questions. If we are notasking the questions, we are not finding the solutions.”—Vanessa Colella, head of Citi Ventures and chief innovation
officer of Citi
As discussed, it is often easy to look at the volume of information andthe vast array of sources it comes from in the digital enterprise as a soothingsign of being in control. It is easy to believe that among all these sources andall these pieces of information you will be able to find valuable truths toguide the organization to the next level. In fact, this is the illusion of controland the opposite of what it takes to make information valuable. To createreal value requires not just access to the information but extraordinarily goodfiltering and contextual skills across teams and the organization. Teammembers as well as senior management, in both their daily leadership stylesand line management, need to be comfortable with this change of lens.
Leaders in the old world argued that information was power. In truth,information is infinitely available, and therefore the knowledge about how touse it is the vital ingredient for success. Now, information not only tells us
what a customer did or liked, it informs business models and instant businessdecisions. This is where themes and streams meet the sales moments andmarketing communications that matter. But in order to do any of this,businesses that use data to drive daily or hourly decisions have to understandthe needs of the consumer, provide information and value to the consumer atthe moments that matter, and alter the business to accommodate all of this topositively impact the business. Without getting the right data at the righttime, businesses cannot ensure that they have the products, features, orservices needed to impact sales. In addition, consumers have to understandthe value above and beyond the competition, so this information also has tobe delivered in the times and places where the consumer wants it. Thisinformation dance requires an active themes and streams engine withadequate levers within the business to adjust (otherwise the insights are fornaught).
Think about Uber and its business model. While Uber’s streams seemcommonplace to us, they were unheard of just a little while ago. The Ubermodel uses everyday business information streams complemented withgeolocation, click behavior, social data, online commentary, searchinformation, and algorithms that add one piece of data to another to createexponentially more value. What is more, there are hundreds of smallerexamples within every organization, but most are used in small teams orisolation.
Once you recognize the power of these themes and streams, filteringbecomes the vital skill. Success comes from not only the information placedin front of you but also the understanding of the themes and the streams aswell as the moment they are being delivered. The trick is to go back tosomething we said in the first chapter: “To succeed, leaders need to makesure all their digital investments work together and deliver value that ismeasurable and greater than the sum of their parts.” This mantra isespecially true for each component, and doubly so for themes and streams.Successful digitally transformed organizations all exhibit a more confidentview of the future than many of those that are struggling in the process.Confidence in our own futures will be dominated by our ability to beflexible, be responsive, and learn how to filter in relevant and filter outpotentially irrelevant but highly available information for decision-making.
Thinking about listening more in the guise of the themes and streams ofinformation is critical in the Digital Helix. Take this example from the
former vice president of marketing at Hallmark brands, Lisa Macpherson.Hallmark is an archetypal American retail brand, but the advent of digitaldelivery and the enormous value of socially sharing emotions in near realtime for free created immense pressure to change in order to find the rightfeedback from the right channels at the right moments to maximize value.
“We had metrics and business processes that focused on assessingmarketing campaigns after the campaign was over. We would doexhaustive analysis of all the various measures and objectives set upfor a campaign and think about how we would do it differently thenext time. With the advent of digital marketing, the ability tomicrotarget, the ability to be in multiple channels at once, weneeded to set much more granular measures, things that were morepredictive of the ultimate sales results, whether they were click-throughs or eyeballs or actions taken. We were able to look at muchmore granular measures, look at them much more frequently, andthen develop the business processes and culture to evolve and learnand experiment much more quickly, and to do so while thecampaign was still active.That meant that we could optimize themarketing effort in flight and very real time, and not wait for thenext season or the next campaign or the next new product to usethose learnings. So it was a very systematic change in how we setobjectives, how we set measures and metrics, how we tracked those,how we acted on those, and then, culturally, being willing to workwith a little less data and more hypotheses on what to do differentlywhile the campaign was still in flight.”—Lisa Macpherson, CMO/SVP of marketing, Hallmark
When you have these themes and streams coming together, you get a realand actionable picture of the situation in real time. The process of listening,filtering, and ultimately combining relevant data to identify and make theright moves in an instant is what theme and stream allow. Asking the rightquestions and getting the organization set up to handle the process beforejumping into action is what separates the leaders from the laggards. Can youidentify signals and noise in your organization that would bring you closer tousing a themes and streams approach?
CHAPTER 10
I
CUSTOMERS HAVE EXPERIENTIALPORTFOLIOS
“Knowledge speaks, but wisdom listens.”—Jimi Hendrix
t sounds like common sense that consumers, business buyers, or evencitizens in the Digital Age are building a portfolio of experiences every
time they engage a brand or agency. In fact, most marketers are so in tunewith this that billions of dollars annually are spent on providing, refining,and drawing people in to the experience. But this is a one-sided view. Yes,your organization can and should provide the best experience for yourcustomers or users. But have you thought about the inverse from thecustomer’s perspective?
Every time a product is purchased, a service is delivered, or a friend talksabout how to best use the product or what to avoid, the portfolio is beingbuilt. While to you or even to the customer themselves this may seem like aseries of slightly isolated elements, they do collide at some point. This ishow people handle and filter the massive amounts of information thrown atthem from every corner of their physical and virtual world. For example, youcould be shopping with a friend who bought a product and mentioned theydid not like it. In the digital world, this could be reviews or ratings presentedas you shop. It can all happen in a few seconds because of the technologiesconsumers, citizens, and business influencers have at their fingertips. Thisradically shifts the power base in good and bad ways and directly onto thebacks of the people you are trying to reach and convince.
“Digital makes the hard easy. It makes esoteric commonplace. Butmost of all, it makes things that used to be fairly time consumingreal time.”
—Michael Schrage, research fellow at MIT Sloan School’sInitiative on the Digital Economy, oversees research on digitalexperimentation and network effects, and is author of TheInnovator’s Hypothesis
You can think of it like a financial portfolio, where all the parts areconnected. In the worst case, your organization is vulnerable if it does nothandle one of the pieces of the portfolio well enough. All of the good you doas an organization can be dismissed if a key piece of the portfolio does notdeliver. Take, for example, great product reviews. Earning a “five-star”rating at the purchase phase is not enough if you have troublesome serviceand support, since all pieces of the journey are now connected. A badexperience in one phase can drive overall ratings and portfolios down.Amazon or Cars.com, along with thousands of other sites, show you howreviews and the specific details of your portfolio are presented and scoredinstantly for would-be buyers. In fact, 90 percent of Yelp users say thatpositive reviews affect their buying choices,1 and 93 percent of people whoconduct research on review sites typically make purchases at the businessesfor which they search.2 But the key here is that this is not done in isolation,and a review or comment across any item in your portfolio is all that isneeded to carry favor for your product or service vs. another. Look at it inthe positive: A well-balanced portfolio where everything is delivering canadd enormous value simply through the act of being connected. In addition,buyers leverage their portfolio with making brand choices to specify theconsideration set of features, benefits, and must-haves for products andservices they want. All of this points to why brands that have more“connected” positives tend to have greater market velocity for their productsor services.
The key is to deliver the best experience across each phase andtouchpoint, from reviews to search to pricing to service to support andultimately to feedback. This seems obvious, right? Deliver across the boardand you win. But the portfolio shifts and compresses over time while stillbeing interconnected. As new information is delivered constantly andinstantly and the buyers’ needs shift, their portfolio of experience morphs aswell. This radically changes the overall impact of negatives or positives withthe brand and its competitors. That is why understanding customers’ orcitizens’ complete experiential portfolios is vital.
“There will be different ways for consumers to access content. So,everyone needs to be a lot more flexible in working with andunderstanding their consumers. For us at the Pac-12, we havealready begun thinking about tailoring our offerings to give fansmore of what they want in the format that they want it in. We arealready planning on how to use and find more information and dataabout our fans from existing and new sources. This is and will bethe backbone of engaging and connecting with our fans across bothdigital/social media as well as working closely with our schoolsthrough various initiatives to drive fan engagement to new levels.Using more tailored and targeted efforts driven by ourunderstanding of what our fans value is core to providing the bestexperience and continually improving it.”—Larry Scott, commissioner, Pac-12 Conference
Identifying and handling the interconnected experiences within theportfolio is where most organizations fail and exactly where digital issupposed to help the most. Many times the isolated systems and groupsresponsible for tracking and monitoring these feedback loops are to blame.ERP, CRM, social feedback, customer support, competitive pricing reviews,communications, and sales feedback have to connect based off the near real-time information an organization can access. These pain points need to beidentified and adjusted to make yours a winning portfolio.
In our experience in this area with brands both big and small, there tendsto be a wide gap between organizations that are digitally transformed andthose that are not. Digital leaders have built their portfolios and connectedinsights to allow the buyer to self-navigate. Laggards, on the other hand,know the theory for connecting insights but have not correctly investedleveraging and surfacing these insights in a connected manner. From ourresearch, we have found that the most transformed enterprises didn’t do onlyone form of social engagement with customers; they invested in a hugerange of activities. From crowdsourcing new product ideas to service andsupport to demand generation and even stockholder engagement throughsocial, the underlying philosophy was to connect all these elements. Theseleading organizations did so through various departments or functions withthe goal of building their set of experiences and inputs into a completeportfolio across all facets of the brand.
The Catherine wheel in figure 10.1 offers potential elements thatcontribute to any organization’s portfolio of experiences. This diagramcovers the full range of elements, including products/services (experiences),the company overall, and even the nature of the customer’s sales andmarketing interactions (moments). Now, these all compress either in parallelor at least in pairs (peer and market feedback, for example) and nearlyalways in real time.
Customer power is the new driving force, and an organization’s ability torespond, interact, and comanage becomes the key indicator of successfuldigital transformation. This highlights the vital nature of the connectionsinside the DNA of your digital organization. Take a look inside each strandof the Digital Helix. Each shows us the forms of digital behaviors andprocesses that are necessary for success. Following are some examples.
In chapter 8, on executives as digital explorers, we discussed theessential behaviors, attitudes, and actions that would drive successful digitaltransformations from the top. We have seen ideas around the concept of“customer first” work well here when executives have the full picture andunderstanding of their customers’ portfolios. Successful executives choosethe key customer portfolio moments and drive focus and knowledge of eachthroughout the organization. Leaders use this information live to deliverpersonalized experiences. They understand how instant and customized canamplify the needs of each component in the portfolio to highlight the rightfocus for the customer and deliver meaningful change in ROI. Furthermore,we have also seen mistakes made when leaders try to build a complex modelto attack portfolios as a kick-off point. It is far too tough for even the mostmature and traditional organizations to absorb significant changes withoutdigital processes and DNA to act on the findings or recommendations.
Figure 10.1: Customers’ Portfolio of Experiences
A model naturally follows as organizations absorb and set up the digitalDNA to handle the shift to portfolios based on the insights and dynamicsfaced. But the model only comes about and works after vast improvementsin collective awareness of the portfolio itself as well as of the areas thatrequire attention. From there, the teams must be set up to handlecollaborative resolutions regardless of the goal or issue. As mentioned, ahighly digitally transformed organization can perform faster than their lessdigital counterparts in this regard. For example, we have twice seen theresults in developing and implementing programmatic designs in socialengagement when architected right. Here is where the relevant role of theexecutive as a digital explorer shows its value. Executives who focus theorganization around maximizing the value of the customer portfolio knowthis to be true. By bringing resources to bear for the key aspects of theportfolio (through both small and tangible examples), executives rally theorganization around key issues to solve and grow.
Looking at the theme and stream component is also vital for resolving orleveraging customer portfolio components. Customer satisfaction surveysand Net Promoter Scores tend to give color to customers’ views of thebusiness and offerings. However, these do not identify the key portfolioelements that are critical to an organization’s long-term success.
Digital leaders need to think about how to identify and incorporate newcustomer themes into their marketing and customer satisfaction equations toimprove the portfolio offerings. For example, seeing a product get onlyneutral feedback at launch or little to no positive customer service feedbackis a leading indicator in the new digital world. In addition, informationthemes may well come via streams such as letters or calls to executives. Inaddition to these examples, digital leaders have the ability to use all of thecomponents of their digital DNA to recognize, properly evaluate, and drivethe right course of action to truly make positive impacts on the customer’sportfolio.
“The banking business is very mature, and Citi has been around forover 200 years. Even as an established player, we cannot assumethat we know our customers’ pain points. We push to validate, evenif we think we have a potential solution for their needs. Wechallenge each other to solve these pain points by learning, testing,and validating to understand the best ways to roll out these solutionsefficiently and effectively. Our systematic model has created anenvironment where making changes is faster and more plausiblethan it has ever been before. For large established financialinstitutions, we are spending a lot of time trying to understand notonly how we make use of technologies to make our existingprocesses more efficient and deliver to customers ever-betterproducts and services, but the right way to step into this completelydifferent kind of world where people and customers are attemptingto reimagine the industry before someone else does first.”—Vanessa Colella, head of Citi Ventures and chief innovation
officer of Citi
Sales as connected moments, by definition, will only function with a fullunderstanding of the customer’s complete portfolio of experiences thatmight affect the sales processes and outcomes. Imagine knowing all the
experiences a customer has with the brand and potentially with yourcompetition. Now, think about your sales process and how it would benefitfrom:
1. Better access to the right people with the right portfolio and offering
2. The ability to target key sales moments
3. Being able to show higher value for your offering, including more repeatvalue or a lower cost of acquisition
The stronger the understanding and management of customer portfoliosinside your organization, the more effective sales moments can be to deliverbeyond current scope or competitor offerings. This may sound a little far-fetched, but this level of vision into the minds and experiences of thecustomer is a huge advantage for the company. Knowing the value placed bythe customer as well as the value the customer assigns to you and yourcompetitors gives you the complete customer experiential portfolio to useacross the entirety of the funnel. When we have helped organizationsmigrate from a traditional to the moments-based sales model, we have seenthem leverage this knowledge and vastly expand their targeting, selling, andclosing capabilities. But to rise to this level requires the ability to shareportfolio information in near real time with a team able to access andleverage it.
Marketing and communications as a flow offers an important layer to thecustomer’s experiential portfolio because it can deliver a coordinated set ofactions through key parts of the customer’s experiences that matter in pre-,during, and post-purchase moments. As with sales, for connected moments,having the ability to identify and use your customer’s portfolio to youroptimal advantage, while also using it to depose your competitors, is asignificant benefit. Portfolio strength can identify marketing andcommunication strategies and tactics that lay the groundwork for sales andhelp differentiate your offering. In addition, knowing the customer’sportfolio and values enables organizations to drive and promote buyingcriteria that favors your brand.
A great example of this as well as product development is betweenApple and Android. Both have similar smartphone offerings in terms ofcapabilities, features, and benefits. Yet most iPhones sell for twice what theirAndroid competitors sell for. A key reason for this is the value placed on
experience. Apple’s marketing of their experience and “ease of use” is bornout of the knowledge of its customer’s portfolio and perceived value fortechnology that “just works.” The company exploits this experience to drivepricing premiums across phones as well as their other products while helpingset buying criteria for the market. While not 100 percent foolproof, havingtwice the pricing advantage and forcing competitors to react to your criteriahas had huge advantages dating back to the original Macintosh computers.With digital transformation and the knowledge and insights they havegained, Apple has been able to accelerate this advantage over formidablecompetitors like Google and Samsung.
“You have got to start with the customer experience and workbackwards to the technology.”—Steve Jobs, founder and former CEO, Apple
Because your customer’s portfolio of experiences covers such a widearray, it is essential and almost a prerequisite that everybody has to beresponsible to everybody else. In almost every case, there is not a singlepoint or group that has the scope to turn numerous insights into portfolioresults. Managing and leveraging the potential power of your customer’sportfolio of experiences requires digital technologies that enable cross-platform sharing and curation of insights via many forms, including internalto external social, instant messaging, and collaboration as a backbone forsuccess.
Precisely this agility and long-range thinking, combined with theresponsibility to each other and provided by the right tools, can set up anorganization to drive portfolio success or seal its fate.
Organizations designed around the customer’s portfolio of experiencesare, by definition, in the moment and one step ahead. As an organization,these digital leaders are capable of understanding the blips, trends, and quickshifts that can change the velocity and shape of the market as well as theircustomer’s portfolios. Understanding and using this one-step-aheadphilosophy matters because it is a constantly evolving process. Digitalleaders use tools and processes to identify and harness these evolutions.Further, these organizations accept that constant change can be utilized todrive real growth when the whole of the company is aligned to leverage thecustomer’s experiential portfolio. This, too, requires a balance. Too much
focus on customer service feedback or competitive feedback can distort thepriorities of the organization and cloud the real values inside the portfolio.This can lead to being in the moment but not being truly one step ahead, asorganizations tend to miss new moments when overindexing on existingones. This fact alone is an illustration of how important it is to beconsistently one step ahead and to keep everything connected to thecustomer’s portfolio of experiences.
“In health care, we need to remember that we are not competing justwith the hospital system across town. We’re competing with theexperiences that our patients have with Amazon and Google, withhow easy it is to find something, order it, and have it delivered withjust a click or two. And now, it’s not just Amazon who delivers thatexperience. All kinds of businesses are moving fast to change theircustomer experience. Customers now expect every industry to keepup with that level of experience. It is our job to identify and meetthe experiences customers want now and anticipate the experiencesthey will want in the future.”—Kelly Faley, vice president, digital marketing, Sharp
HealthCare
Unfortunately, there isn’t a complete model to measure the full value oreffect of the customer portfolio on the value of a company’s economic valueor equity like Interbrand’s Best Global Brands Report. Leading digitalorganizations understand and have identified the components that drive thatcustomer portfolio equity like some of the elements we have discussed(increases selling price, faster time to close sales, shorter sales cycles, etc.).In addition, these leaders used the metrics they had to validate the benefitswithout waiting for a market-ready performance index to prove them right.The best organizations have worked diligently to leverage each of the otherDNA components to drive exceptional value in their customer’s portfolioand have used metrics in place today to identify and change as needed. Theyhave also gone one step further and recognized the need to bring each ofthese digital DNA components into play together to complement each other.
Make no mistake, there are significant challenges to getting all the othersix DNA components working together to improve your portfolio value inthe eyes of your customers. Even with Net Promoter scores, customer
satisfaction indexes, and all the data that comes with them, vaunted brandslike Toyota and Lexus have had to reorganize and reevaluate how best tostructure themselves to make and leverage the shift. But in the case of thewinners, they have used these challenges as opportunities to set themselvesup for the next round and to stay ahead.
The DNA of the most successful digitally transformed organizations isless about grandiose statements or mandates and far more about the carefulorchestration of knowledge sharing, collaboration, processes, and a constantvigilance to look for small but important shifts in dynamics. As we havementioned, the role of the senior executive is vital here. But so, too, areothers across the organization. Digital requires tools and technology, but italways runs on the strength of its people and teams. Our research shows thatan unusually high focus on distributed ownership and collectivemeasurements drives success. That pattern alone should be your first signabout how to move toward a customer experiential portfolio as one of theseven digital components of the digitally transformed enterprise.
If the present is about increasingly putting the customer first, then wemust do so in their combined experiences, not only in purchasing or service.We cannot continue to think of our actions solely along “how do we servecustomers better.” They need to evolve and involve a major shift in how wecollectively share responsibilities in a digital-centric world where the wholerange of ongoing customer experiences drive purchasing decisions.
Can you see how your organization’s portfolio is perceived and how itcompares to that of competitors?
CHAPTER 11
T
MARKETING AND COMMUNICATIONSAS A FLOW
“Life is a series of natural and spontaneous changes. Don’t resist them; thatonly creates sorrow. Let reality be reality. Let things flow naturally forward
in whatever way they like.”—Lao Tzu
hroughout the history of marketing and certainly for most marketers’careers, almost every form of marketing or communications has been
planned and managed by quarterly and/or annual goals and reviews.Marketing plans, product launches, crisis management readiness, loyaltyprograms, and all forms of commutations (stock holder, employee, PR, etc.)have been tied to this rhythm. And, many times, these activities have alsobeen done in semi-glorious isolation from each other. The reason for this isthat management usually needs its teams to deliver against specific targetsand goals and report results back every few months. Even if yourorganization is more dynamic, chances are your budgeting process forcesyou into this regular timing and cadence.
“The value of middle management is in driving focus. If you wereto eliminate them, it would create a control and focus gap in thecompany.”—John Steinert, chief marketing officer, TechTarget
It was then management’s job to make sure things worked together andthat these results boiled up to the greater goals. If things were working, youcould ask/beg for more money and resources to do more or shift directionbased on your results. But customers and competition don’t always workwithin your cycles. How many of us have been pushed to drop everythingbecause of a new “idea” from senior leaders? Add in the pressure to do more
with less, and you can see why this dilemma has been ongoing long beforedigital arrived. So, like most of us, you probably walked this tightrope tryingto balance quarterly goals and budgets with competitive and customerpressures while adjusting to the digital realities of instant information andunlimited experimentation. If you happened to be successful, it was in spiteof this tug-of-war process. If you ever failed, it could well be because youdid not balance your efforts between the traditional and the digital.
Digital gives us a chance to know the customer better, a lot better. This istrue about what they want, but more importantly about how they act, think,and get information. Customer knowledge is critical, and most organizationsdo a pretty good job of surveying customers and watching their behavior.But where does this activity take place, what information is collected, andwho gets the data and when? In most companies or teams, it is the marketingdepartment. If there is sharing of the information (like the corporate andmarketing planning initiatives), it will likely be done in glorious isolation.Even if you are one of the rare organizations that live off data and spread itacross the company, chances are you are still planning in cycles. In eithercase, you are working from inside the organization out to the customer andnot starting with the customer. There is a better way to deliver for yourcustomers and deal with competition. And there is also a way to increasevalue and speed where digital, instead of being a piece of the puzzle,becomes a connecting thread that brings everything together.
“We’re trying to make it easy for our members to engage with usinitially digitally and then moving on from there depending on theirindividual needs. We want to deliver an absolutely worldclassexperience for our members by being digitally focused but notdigital only.”—Chris Cox, head of Digital Experience Delivery, USAA
One route many have tried is investing heavily in technologies thatdeliver near real-time information sharing and collaboration. The theory ofthis approach is that the more we share and the more we collaborate, thebetter the decisions will be. Sharing of customer information and knowledgecan certainly be increased via this route. Other marketing leaders havelooked to force a comingling of people, teams, skills, and/or knowledgeacross functions, hoping to bring consensus and better ideas to the overall
group. In either case, digital plays a vital role. Whether it is a foundationalelement like Salesforce, Marketo, or other crossorganizational tools orindividual solutions like WebEx and SharePoint, more technologies arebeing implemented to increase real-time information sharing. When doneright, either approach will make the company more knowledgeable on manyfronts. But the act of simply buying and using software or technology doesnot automatically deliver a more effective organization that excels atworking together. Also, while both technologies have their merits and arecapable of producing results, they suffer from the same issues. Each tries touse forced collaboration as a crutch for the balancing act we all do betweenplanning cycles, customer knowledge, and cross-group sharing.
“We’re definitely collaborating much more because it’s risky not todo so, especially in a highly regulated environment. Too manythings can and will go wrong if companies aren’t collaborating andworking together.”—Jeff Winton, senior vice president of corporate affairs and
chief communications officer at Astellas Pharma
The missing piece is the rhythm or flow of the customers and our market.Organizational timing and collaboration aside, being better connected andhaving a better understanding of others in the group or company does notinherently solve the rhythm and flow of our markets, customers, andcompetition. The fundamental philosophies driving more collaboration,greater skills, and shared knowledge are still based on a brand’s outwardview of the world. Customers are often reduced, even in customer-centricorganizations, to targets that are not necessarily equal or even greater in themix.
Again, this in many ways is similar to the ways people tried to adaptsailing ships to the steam revolution by adding engines to the old hulls. Now,like then, you can’t just add technology (either organizationally and/ or at anindividual level) and expect the results to change by magnitudes. Theaddition of the technology itself adds new challenges and issues. For ships,the hulls were not made for the additional weight of the engines and fuel,therefore many failed rather dynamically. For marketing andcommunications, the additional digital infrastructure has created moreinformation to parse, and in many cases, information overload can hinder
efforts to be efficient. We are at a point where most organizations are usingthe digital data smartly, albeit in the old time-based paradigm. How do webreak this mold and get better results that can be sustained and drive ourmomentum?
First we have to recognize the world, the market, and the premise thatbrings us to this point. Bringing teams together to share in their processesand giving them more data is not enough when consumers can instantlyswitch between all the possible marketing and communications activitiesfrom yours and every other brand instantly. From search to social to peerfeedback to product reviews to email, information is available to anyoneinstantly. And this movement can occur anytime in really any way (digital oroffline), 24/7, and certainly 365 days a year across the globe. This means thecustomers and their actions have evolved well beyond the traditional, butmost of our functions have just added digital elements to traditionalmarketing and communications. As marketers, should we not try to channelthe customer’s momentum the way a judo master does when flipping abigger opponent, rather than trying to reshape it to our internal processes andtraditional approaches?
“So what we’re seeing today is that companies that are newmarketcreators are not just creating ‘new markets’ in the digital domainbut are colliding with traditional industries. Whether you’re runningan international hotel chain or a regional taxi service, you’restarting to see companies that are making use of technology toreimagine what industries will look like.”—Vanessa Colella, head of Citi Ventures and chief innovation
officer, Citi
We need to think differently about how to structure the way we worktogether to deliver without disrupting the customer’s flows in the process.Customers see all forms of marketing and communications as part of oneflow in their real-time worldview. This means we need to adjust the way wework, think, interact, and plan around the idea of the customer’s flow. Also,one function (yes, including marketing) cannot solve the challenge or graspthe whole opportunity in the customer’s view and moments. There are toomany variables and combinations that exist for one function to be successful.The customer touches sales, support, and accounting, to name a few.
Therefore, we need to flow our efforts and interactions to match thecustomer’s across both direct and indirect customer interactions.
To be successful, organizations with winning digital DNA approachesuse marketing and communications as a flow focused on four key behaviorsthat drive more success:
1. Information is seen less as a proof point and more as anongoing way to adjust dynamically.The constant noise makes it difficult in a digital environment to filter usefulfrom interesting or distracting information. This challenge is heightened bythe group or purpose of marketing (focusing on demand vs. brand orcommunications, for example). What might be considered positiveinformation in one aspect of the equation may have little to no immediateimpact on another aspect. This means critical data may be missed or shelved.A perfect example of this is when customer social questions show a needand marketing promotes a solution that solves their problem. Sales wouldalso help the process to create demand with pricing or offers, and everythingis backed up by support helping to guide use. The equation comes full circleas customers share, post, and discuss the answer/product across off- andonline channels, thus expanding the flow to others (both new and currentcustomers). In this example, data is used to adjust the interactions with theflow and guide response and actions, as well as promote success.
2. Marketing is used as an immediate and bidirectional channel.In a world where breaking through with your message requires extraordinaryeffort, marketing must be vigilant in order to communicate today, and toknow where to act in the future. For example, typical communications andmessaging can break through and be seen in social, tracking research, mediaanalysis, etc. In demand marketing, the breakthrough is often seen inresponse rates, sales feedback, win/loss, or channel feedback. In the digitalworld, these all collide far faster and closer than ever before, whichempowers smart organizations to use feedback to drive faster adjustments.The more an organization’s functions connect, share, and make rapid smallor even larger adjustments, the better. Part of what drives success formarketing and communications as a flow in the digitally transformed
organization is the sense of shared responsibility and ownership aroundeverything—not just the defined areas of personal or group responsibility.This helps drive rapid and effective reactions to market changes that aremore common than ever before.
3. Customer preference wins over all other competing demands.Everything we have discussed in the previous two points you should be ableto clearly see. Where marketing and communications go off the rails is whencompeting priorities and fiefdoms come into play. When two or more peopleor groups have different ideas, who wins? In most organizations, it is eitherthe stronger or the higher-ranked group or leader. But this is not always bestor preferred by the customers. That is the ultimate acid test, and it can onlybe answered with data, not feelings. If your organization is looking at yourcustomers’ flows, most answers are straightforward. When the answers arenot straightforward, the data and experimentation provide the right course ofaction. If marketing and communications do not have this drivingphilosophy or principle, any action(s) might serve the purpose of one of thegroups or initiatives but not be in alignment with the experience that bestbenefits the customer. Given the connected nature of customers’ informationflows across social to sales to messaging to content, the need to connectactions together on one guiding principle and in one flow is vital. Now,nothing occurs in isolation for a customer. In order for an organization to actquickly and effectively, these functions need to be given strong guidingprinciples that add focus versus trying to do everything at once and being tooslow or too fragmented. This is also true in almost every case but especiallywhere organizations need to make the best choice from a few suboptimaloptions. In these cases, where the best solution is not ready or available,having a flow mentality can help you choose the best option as anorganization in almost an instant. But, throughout the flow, this mentalitycan also help guide the communication and ensure support of this lesser oftwo evils. This is seen as the organization uses its digital tools and data toinform and support today’s reality with tomorrow’s new solution.
4. Planning is a series of tests and experiments backed by data.As we discussed, internal timing is nothing that should be used to change ormanage the flow of the customer. Rather, your customer’s flow should
dictate your time and planning. The best way to do this is to budget for testsand experiments, while putting capital behind the best options andcontinuing to test and experiment. In practice, this is not much different fromthe process today. The biggest change is that every big plan or idea has atesting phase before the full effort. Some will say that this is not alwayspossible with tight timelines or launches where you have to start big rightaway. But if you are living with and in your customers’ flows, you should beable to understand what they want. This gives you the ability to pretest usingyour digital tools and to use the best options when a testing phase is notpossible. This should give you a pretty good answer with or without a leadtime. Also, the fact that customers choose what information they get andwhere they get it means that anything you do must be coordinated across thecustomers’ experiential portfolios. Your efforts need testing on the externalside to see what works but also on the internal side to ensure idea, form, andfunction work near perfectly.
By now you should be able to see that the key to better customerunderstanding is mapped to setting up and working within the customer’sdynamic rhythm while using a constant flow of in-the-moment information,all backed by continual testing and experiments. This gives every group achance to deliver better for the customer because the group now betterknows what is needed, and they are prepared to operate in the same dynamicfashion and rhythm as the customer.
This effort is tied to the other Digital Helix components. Organizationsneed to share information to get the customer moments right (theme andstreams) or the flow may be missed. In addition, shift planning and cyclesrequire leading by example (executive explorer). Changes cannot occur ifthe leader does not fully understand and walk in the customers’ footsteps toexperience the world the way they see it. This is especially true in themarketing and communications areas where intensity of planning,decreasing human resources, and a vast increase in data or intelligence doesnot guarantee a more outward-centric approach. Marketing truly deliverswith a better understanding of the customer and a shared perspective of theconnected parts of the organization coming together.
“We have a common framework through which we pipe a lot of themember feedback in a process. We combine member feedbackacross channels and touch points into a common tool, and we usethat tool to look for trend lines and anomalies and to do a lot of
analysis and hypothesis testing. This ensures that we’ve includedthe voice of our members to drive our prioritization efforts.”—Chris Cox, head of Digital Experience Delivery, USAA
Those organizations with better connections throughout are 89 percentmore likely to have a competitive edge over their competition, and 87percent show better signs for growth. If the very act of managingcommunications and marketing as a flow around those target moments orjourneys can bring far greater success, then we need to focus on this newdirection for design and execution being a priority. The digital world movestoo fast to try and guess or judge it each time. Constant information frommultiple streams means we need a vital bond between marketing andcommunications more than ever before.
Kristin Lamoureux, associate dean at New York University’s TischCenter for Hospitality and Tourism, noticed in her research that “Millennialsneed to have experiences that are meaningful. They want to get closer to thenatural environment, to the social environment, and they want to have anauthentic experience.”1 Think about your products or services in thiscontext. How can you deliver an “authentic experience” without being in theflow and free to experiment? Millennials and other generations are nowbeing trained to look and expect an “authentic experience” from every brand.This is their definition, not yours, but your organization has to live up to it.This “authentic experience” has to flow across all touchpoints and groupswithin the organization with which they interact, every time. Digitallytransformed winners are changing their mindset and using the tools theyhave to clearly understand how this seemingly small change in perspectivefrom inside out to flow can dramatically shift efficacy, results, andexperience to really deliver for your customers now and in the future.
How many customers have you directly talked to during the last week,and how many should you be talking to every month going forward to betterunderstand and deliver?
CHAPTER 12
SALES ARE CONNECTED MOMENTS
R
“It seems essential, in relationships and all tasks, that we concentrate onlyon what is most significant and important.”
—Søren Kierkegaard
elationships matter. Successful relationships are two-way and ongoingdialogues that deliver lasting benefits for all parties. These
relationships rely on a combination of listening and interacting so each partycan respond to actions, languages, and ideas even when they may be out ofthe norm. This type of communication produces a fundamental confidenceand mindset so that even when unknown variables enter, there is enoughhistory and experience that the relationship will survive and may evenprosper. This process is tested, day in and day out, and has endured forcenturies or more. You can look at your own successful relationships and seewhere mutually understood meanings of critical moments help drive trustand push a relationship deeper.
These fundamental facts or truths about relationships do not change inthe context of sales or customer relationships. Trust and confidence are theingredients needed to create a meaningful and long-lasting B2C or B2B. Wemust trust that the retailer can deliver what we want and is able and willingto handle our issues promptly and effectively. At a more profound level,businesses should be able to direct and guide customers, whether brick andmortar stores or in a B2B setting, to the best solution for their needs at anygiven moment. In the old world, the sales interaction is often fleeting andmight not be verbal. Too often, this interaction is the hand that points to theright aisle, right shelf, or right product.
Digital changes the sales interaction and enables instant and richcollaboration if the brand is ready to take advantage of the opportunity. Thesame elements of two-way dialogue, both ongoing and momentaryconversation, drive successful sales. However, in the digital landscape ofthese moments, the relationship and trust can flourish, evaporate, neverappear, get tarnished, or fail to be connected due to the immediacy of ourinteractions. Think how quickly Allstate, IBM, and Zappos have to react andinteract with a complex set of services, ideas, and customer inputs. Mortgagepreapprovals that once took hours, days, or even weeks now happen in
minutes or seconds. These are large personal or organizational decisions, andtrust in the sales approach continues to matter in the decision-makingprocess. This behavior indicates that trust is possibly the competitiveadvantage for sales. Marketing experts Don Peppers and Martha Rogers usethe example of Ally bank, an entirely online banking institution that activelyreminds customers that money that they have in certain accounts would earnhigher interest rates if moved to other types of accounts. There is no chargefor this model, and it represents a trust currency that enables the customer toget more value from their relationship with Ally than with other banks. Thisis what Peppers and Rogers refer to when they say that “trust and honestyare a competitive advantage.” This example shows how digital and sales canbe used together to deliver value beyond the sum of their individual parts.The Ally example shows what can happen after the relationship begins. Butdigital can and should be the linchpin that identifies and defines the salesinteractions and brings together all the right components to build trust andget the customer to your side.
“We’re very focused on delivering experiences that are innovative,personalized, and frictionless to our members as well as proactive,wherever possible. This is important to us as an organization fromtop to bottom in the way that we want to think about our members’relationship with USAA at every interaction. To do this, we mustunderstand our members and their needs as well as, if not betterthan, they do themselves. We use this as our core to deliver verysimple, reliable, focused, digital products that are supported byprocesses and interaction models that are all about making theexperience robust and intuitive for our member base.”—Chris Cox, head of Digital Experience Delivery, USAA
The importance of digital’s role in sales is further emphasized by theresearch we conducted. Fifty-six percent of respondents saw the number oneopportunity for digital transformation as improving sales operations andcustomer satisfaction. Gaining a competitive advantage was next at 47percent. These findings show that successful organizations recognize theneed to shift the way they are leveraging and organizing the sales functionaround digital principles to improve customer success.
But how and where do organizations shift and change to build lasting,meaningful relationships with customers using digital? According to PeterDrucker and Theodore Levitt, the fundamental focus of an enterprise is tosell and market product and services. Old and simplistic as this sounds, italso does not account for the relationship and trust variables that driveeffective sales or how to get that trust in a world of near-instant digital salescycles. Being always on and omnipresent in the sales cycle is impossible forbrands when you consider the pervasive digital universe of choices. Rather,successful organizations look for and optimize the key moments whereleveraging trust can hold the buyer’s attention and present an opportunity forsales. The key is to be the digitally transformed organization that can presentitself at these critical moments when the buyer is ready to interact. So howdo brands map these moments in the digital world and transform sales to bethere and ready in the right way?
From our work and research, we see that leading Digital Helixorganizations use three underlying factors that force sales to radically changethe way they think, invest, and behave in building customer relationships.
Factor OneCustomers, no matter the market or category, have extreme levels of controlover the sales functions in a digital world. Everything is one click away.From abandoning a shopping cart to requesting more information tosearching for alternatives to deciding to purchase, customers can go in anydirection they see fit in less than a second. An interesting paradigm of digitalin this situation is that the vast expansion in customer information gatheringhas also radically diminished the customer’s desire to trust information untilit is filtered in his or her own specific way. Now, most buyers use anycombination of social, influencer, independent media, or even experientiallydriven information to verify and assess the information brands provide. It isthis overwhelming task of search and evaluation that makes trust so criticalfor both brands and customers. Building trust becomes a shortcut in thedigital journey, and it is an incredibly simple way to help when and whereconsumers want it in a world they control. Think back to the Ally bankexample. If you trust Ally is always looking out for your best interests,where will you look first when a new banking opportunity arises?
Factor TwoInstead of having to get information in large buckets (brochures, websites,events, etc.), customers can get hundreds of small slices pulled together fromdigital sources that they find through their own cycles. It is nearlyimpossible for any marketing team to do it all or be everywhere. But if thesales team could be at the right moments with slices of the right information,there is a far higher chance for success. In fact, our research has shown thatGen X buyers consume five times as much information and content as babyboomers. Imagine how this impact will grow as more digitally savvy buyersget more information faster in the coming decade and are able to slice andpaste their own tapestry of information instantly in a self-controlledpurchasing cycle. Think how this might impact your sales and marketingfunctions. Do you have the right content slices (product, customer feedback,etc.) in the right places (social, search, with sales teams, etc.) when themoment hits your buyers to either further the relationship or build a newone?
Factor ThreeThe more other organizations move to embrace new sales processes, themore we will likely see a shift toward longer-term behavioral changes.Selfactualization by buyers of the whole sales process in connected momentsaround slices of information is already becoming the norm. Think about appsthat enable instant price matching or Google ads that deliver informationthrough search or retargeting to remind the buyer of deals they searched for.And this is just one section of the funnel. Buyers are now accustomed toseeing, digesting, and having slices of information presented wherever theyare. This nonlinear journey can seem to be an almost chaotic combination ofevents, which is probably not fully understood by the customer. This digitalsales journey is a rhythmic process nonetheless.
In most organizations, sales has been attempting to manage a linearmodel starting at awareness building and moving to consideration topreference to purchase. Many successful digital firms have realized that intoo many cases long-term trust and happening to be at the right place at theright time with the right information is what ultimately drove the sale, notthe careful linear sales model. In either B2B (where this is a more obvious
dynamic) or B2C (where the challenge is the ability to intercept the buyer inthe exact moment), the shape of successful selling and how trust is garneredin that process has changed forever.
Think about creating an infographic on the five questions to ask beforebuying a particular product. We produced such a chart on Lasik early on inour careers that discussed why each question was important and what buyersshould look for in a provider. This positions other brands as proactive buyersand enables sales to enter at any moment with an educational slice ofinformation to redirect the conversation to the brand. Does your organizationhave content like this that can be delivered digitally in a number of differentmoments by sales and marketing to build trust and demonstrate your brand’svalue?
You need to evaluate your organization’s sales models and see where thecompany still relies on an old linear nature that is biased toward funnelmanagement. This requires identifying a new patchwork of information andmoments for sales to own and target. However, moving sales to a new digitalframework can only be done in a connected organization that has thesystems and culture available to enable the sharing of information acrossfunctions. For example, does your organization have the ability to see andtrack a download? Can you track a visit to a key sequence of web pages andconnect that to a response of a specific advertisement? Can consumerspurchase and then visit an additional product part of the website? Armedwith information and the right automation in a system like Salesforce, yoursales team could, with surgery-like precision, deliver the exact digital slicesto the prospect to reinforce or build the trust the customer seeks. This isexactly what digital enables to its fullest. Digital gives your brand the abilityto show that your organization understands the customer or prospect andtheir needs when and where it matters.
“Digital transformation is centered on the relationship you want tohave with your customers. Do you as a brand really understandwhat your customers want, how they are making new decisions,how they are going through their journey, and what they are tryingto accomplish? Where do you meet them along that digital journey?Answering these questions correctly is becoming very lucrative forbrands and also forces differentiation. So if I am a company thatunderstands my customers’ needs better, I anticipate them better,and I’m going to have an advantage over my competitors. In many
ways, understanding your customers better prompts investing incontent that gives you more touch points, which is key to any sort ofsale. The better my touch point with my customer, the better we cansell to them. Digital is by far the best way to improve the salesprocess, in terms of the consistency and also the scalability.”—Charlene Li, principal analyst, Altimeter, a Prophet company
To give you a more concrete understanding of this principle, figure 12.1shows how the customer’s or prospect’s quest for information drives the newmoments approach. It can be sequenced in three possible pathways (A, B, orC) in this example. But you cannot catch them all or be everywhere witheither marketing or sales. We have heard a lot about the idea of social sellingand the notion of being where your customers are when they are online. Thisis not what we are describing, and social selling is only one 12.1 small butinteresting component of the idea of sales moments. Rather, sales momentsinvolve all forms of the customer’s content or information needs and takesinto account the concept of right time and place, no matter if it is offline oronline.
Figure 12.1: Old Sales Model vs. New in the Digital World
In both the B2C and B2B markets, brands need to leverage the conceptthat the customer has control. In this regard, you cannot change the directionof the wind, but smart organizations adjust their sails to reach the bestdestination faster. These adjustments allow organizations to take advantageof the natural forces of the customers’ sales journey that enable winners to
gain an advantage. By understanding how to respond and be where theircustomers are at key times and places, leading firms have exponentiallyincreased their sales efficacy by delivering digital content for the exactmoments that matter to their customers.
So what do moments look like? Well for one of our clients, looking overthe data and interviewing sales teams and customers showed us that a vastmajority of their sales happened in under sixty days. In addition, those oversixty days tended not to come to fruition anytime soon, if at all. In atraditional sales organization, the leadership might be tempted to figure outwhat can be done to improve the close rate on the over-sixty-day prospects.But data and research showed that customers were buying because they hadan immediate need for our client’s technology product. Just by luck, they hadstarted selling how fast they could solve complex problems, not knowingmost customers came to them in dire straits for a quick solution to a problemwith a tight deadline. This is a moment. Knowing that prospects have dozensof other alternatives from the leading brands in the space for simple, long-term projects as well as understanding that our client can be the superherofor those extraordinary problems was a huge move forward.
Think about it. We no longer have to go toe to toe with larger, moreestablished, and better capitalized brands. We can concentrate our sales andmarketing on the moments that matter and where we have an advantage. Wecan produce digital content that helps people identify these situations,determine how best to handle them, and showcase key elements likecustomer feedback and profiles that show we are the obvious solution towhatever problem they are trying to solve. This approach provides clarityand efficiency and demonstrates that if we can help in your moment of crisis,we can also handle your day-to-day needs as well.
This last point is particularly important. Without having a broad marketapproach, we have built in a broad market strategy to use our advantage togrow the business by leveraging our superior ability to handle “even yourmost difficult challenges.” Now our client can focus on the moment thatmatters for the customer, and they are uniquely suited to win, be where thesemoments arise online and off, and have a focused content effort that iswithin budget and sustainable. This approach, combined with sales trainingand automation in Salesforce, is enabling these companies to win in a spacedominated by Fortune 500 brands with sales teams that outnumber themtwenty to one.
To determine if your sales functions (as individual transactions or asrelationship managers) are equipped to win, you will need to audit theircapabilities against these key questions:
1. Have you tracked the moments that matter to your customers with yourdigital tools, surveys, and interviews so that your sales force can interactwith customers and prospects in the most relevant moments?
2. Do you have feedback systems that constantly track the content needs andwants for customers around each of the moments that matter?
3. Can you adjust quickly to give sales new content or slices that arepertinent for a small window of time?
4. Have you created portfolios of content and information that can be used atwill by sales functions for each of the moments?
5. Are you rewarding or measuring sales around their ability to amplify trustand deliver in the moments that matter?
6. Do you have systems to enable sales to automate and refine the contentslices for each moment that matters?
“If you looked at IBM before and after our transformation, youwould see how we moved from hierarchical structure to agile, self-directed teams. Our teams are completely focused on the reality ofwhat’s happening in the market. If you’re not driven by what’shappening with your customers in the moment and how people areactually engaging and responding to you and your efforts, you havelost already.”—Jon Iwata, senior vice president, marketing and
communications, IBM
It is also important to know that shifting sales to digital can turn into aneternal debate if your market or markets buy based on one moment, somesimple connected moments, or a complex set of interconnected moments.Moments matter more than ever before in sales functions because trust as acurrency is swinging toward whether or not sales can aid or orchestrate thesemoments. Information systems aside, there are three key elements that willdrive success here:
Identifying MomentsFirst you have to know when and what these moments for sales engagementcan look like. As we discussed in our previous example, data and researchcan and will show you the moments that matter. What you want to be waryof is creating a whack-a-mole model where sales points out any possibilityof nailing a moment by accident.
Moments are, by definition:
Actionable: Meaning we as an organization see the opportunity andunderstand the logical next steps. For example, your organizationshould understand the difference in actions between seeing a change ina prospect’s business that usually means a need to upgrade or changesystems versus seeing the same change but knowing the prospect isunder contract for two years and cannot change providers.
Acknowledged by the customer: If we were to ask our customers, theywould understand and agree that their need was specific and actionable—for example, needing more support or infrastructure during seasonalor peak times.
Repeatable: There has to be a pattern of behavior or needs that can beseen over many customers and scenarios. For example, addingcomplementary products or entering a new market versus one-offmanufacturing or staffing changes.
Recognizable: We can set up rules to find it and take action on it—forexample, leadership or other changes that are searchable or in the publicdomain via quarterly reports versus internal systems.
You will see that many of these criteria require some level of search orlistening to understand. While much of this information can be somewhateasy to find, depending on your business, you may need to begin trainingsales and marketing to listen for the key elements that drive a purchasewithin your customers. Over time and with the right customer research, thesemoments and their triggers will become second nature for the organization,as they have become for many digital leaders today. As we pointed out,sometimes the moment that matters most to you is the one moment that youare best equipped to address. Not all companies are equal, and not allmoments are perfect. Just because you have used the criteria to identify the
moment does not mean it is the best or only moment for your business towin. In the digital world, as we have discussed, experimentation andresearch should be your guide.
Once you have your moment(s) identified, sales needs a set of momentplaybooks to show them exactly what to do and when and where it matters.Execution and adjustment is critical at this step. Without the right playbooks,it is far too easy to resort back to linear, nondigital thinking and actions.Sales may not feel that they have the same historical controls as before(funnel management), but in reality, they are far better equipped to thrivewith this method than by trying to force old methods into a new world.
Building the Right SystemsSystems have to be built to give extremely quick feedback on what isworking and what is not working in terms of customer needs. It is far betterin this environment to have 80 percent of what you need now than a 100percent perfect view after the moment has passed. Whether it is a single,paired, or complex moment sell, sales needs to be empowered to makechoices as fast as possible. They can adjust on a near-term basis, but if themoment passes, then it is lost. The CIO needs to be the chief sales officer’snumber-one partner. The social feedback systems from service and supportas well as communications are the most vital tools they can have. But anyand all feedback needs to be rapidly collected, filtered, and delivered so thatthis information can deliver a much closer set of interpersonal actions for anorganization’s customers. The sales function has to be far more intimatelyinvolved with the flow and analysis of information beyond pure revenuetargets. In effect, great sales in the Digital Helix organization have more todo with how trust is built around the customers’ needs when and where itmatters than a stereotypical sales prospecting and responding approach.Relationships are crucial in this chaotic landscape, but the ability to partnerwith a customer in a transparent way is essential. There is logic for whyProgressive Insurance so happily shows (and advertises) that you can getcompetitive quotes compared on their site with their own quotes. Theyunderstand the brevity of that comparative shopping moment, how to bethere with the customer as it happens, and how to not lose them.
Aligning CultureFrom a cultural perspective, it is vital that sales become even more highlyindexed on listening than ever before. We started this chapter discussing howimportant relationships are in our world. In Digital Helix organizations, salesfunctions excel in identifying and working the moments that matter. Theybecome instinctively better at gaining insights on how to maximize thosemoments. This is where the “Challenger” sales model from Dixon andAdamson’s book The Challenger Sale: Taking Control of the CustomerConversation becomes the norm. In this book, the authors state thatChallengers have a deep understanding of the customer’s business and usethat understanding to push the customer’s thinking and teach themsomething new about how their company can compete more effectively. AChallenger is really defined by the ability to do three things: teach, tailor,and take control. These organizations focus on pushing the customer out oftheir comfort zone. This book is a great starting point because it talks aboutwhat it takes to be part of that conversation, especially in a world where theirconversations might be very short.
Putting these three elements together is the key to transforming yoursales function. As we have discussed, digital transformation requires you todo more than simply identify the right elements and put them in place. Theorganization and the structure of the company and its culture must rewardand support the sales function to be truly successful. By building trust withyour buyers, while understanding the moments that matter in their journeys,your organization can use sales to either elevate your transformation orbegin to reap new benefits from being digital. How well does yourorganization know the value of each moment in the connected sales process?
CHAPTER 13
EVERYONE TOGETHER, ALL THE TIME
S
“Innovation, the heart of the knowledge economy, is fundamentally social.”—Malcolm Gladwell
ome may wonder why company and team dynamics is one of the lastpieces of the Digital Helix, especially since people and collaboration
play such a crucial role in building the foundation of digital transformation.This decision was made not because this topic lacks importance, but ratherbecause the foundational components of the helix need to be in place beforeyou can think about how teams factor into the equation.
There are two key reasons why this topic is essential for digitaltransformation success. First, ongoing mutual support from teams as well asfrom individuals is critical to any successful organization. No leader wouldever suggest otherwise. Yet all the research and interviews we have donepoint to how difficult it is to get and keep people working together andremaining responsible to each other. Due to the dynamic nature of digital,many find it more difficult than ever to ensure that everyone is watchingeach other’s backs. Almost all people we have worked with and interviewedtell us that the traditional top-down ways of holding teams and projectstogether do not work at the level they did only a few years ago.
Think about the power of bringing people together to perform thefunctions of digital transformation within your organization. Digital enableseveryone to listen better, share more, integrate activities, blur roles andfunctions, and experiment at will. This level of integration and flexibility is adifferent landscape from the traditional silo of departments so common inthe less-digital age. A successful digital transformation requires strategicdesign sensibility around the components in the Digital Helix. This shiftcompels executives to begin seeing sales as moments and not journeys andto start understanding that strategy is often a moving dynamic. Eachcomponent of the business must understand that the organization is betterserved by harnessing the power of connecting people instead of justbranching out as independent functions.
To allow this shift to happen, each individual and team needs to bealigned with the digital goals that enable everyone to thrive and succeed.
“Organizations that take a ‘network effects’ approach to interactiondesign are the ones who ‘get’ it. They understand Tim O’Reilly’sgreat insight that digital services should become more valuable themore people use them. That’s ‘more’ as in the number of people and‘more’ as in the amount of use. As a fundamental organizingprinciple for success, the technical and economic benefits ofnetwork effects are as true for Amazon recommendation engines asthey are for Google search engines. The network effects approachrequires that you design for collaboration and digital together andnot merely try to digitize your organization to create the illusion ofcontinuity. Organizations that understand digital transformation isan investment in network effects will find themselves far ahead ofthe others.”—Michael Schrage, research fellow at MIT Sloan School’s
Initiative on the Digital Economy, oversees research on digitalexperimentation and network effects, and is author of TheInnovator’s Hypothesis
Effectively aligning teams with digital goals is an ongoing challenge.Executives in Fortune-type organizations told us in our research that thestrongest benefits of successful digital transformation are increasedcompetitive advantages (89 percent), improved external and internalcollaboration (87 percent), and enhanced management of growth demands(87 percent). These benefits are only outcomes because they break thetraditional silo approach that dominates traditional models. In moretraditional models the focus on outcome rarely includes the need to changethe way people work together after the needed outcome has occurred. Giventhe exponential changes in the digital world, focusing on processes is vital,especially because some outcomes are clearly not known. Leaders of digitaltransformation must think about how knowledge, interactions, andinterchangeability are constantly tied together. This ecosystem thinking is abetter measure of how goals can be achieved.
Second, for every new process that is introduced, there are severalmakeshift workarounds that people and teams employ to get their jobs done.These “systems” are hard to replace, as they have the owners’ pride ofauthorship and development behind them. Often replacing these processesalso carries risks. One example of a shift in process that most people know
of is the agile development model. Agile was originally designed to removethe barriers to rapid software and service delivery in IT functions as thecloud and apps on demand became more prevalent. As we become moretechnology dependent with digital transformations, it is inevitable that someof the methods used to drive change in IT will migrate across the rest of theorganization. In a Harvard Business Review (HBR) article entitled“Embracing Agile, How to Master the Process That Is TransformingManagement,”1 the authors talk about the factors that drive and prevent greatsuccess with Agile. They found that many companies that launch Agileprojects fail because most people become overly involved in the work ofindividual teams, talk more than they listen, and promote marginal ideas thata team has previously considered and already put on the back burner.
“We have redefined roles to be much more specialized and recastour people into ‘Agile Squads.’ We’ve assigned these squads todifferent parts of our business portfolio—either a geographic unit, acountry team, or a P&L unit or product unit. We then get thesesquads to come together as teams for a one-week, intensive bootcamp. They learn about Agile and study both the new digitalmethods and the traditional methods, including how to createquality content. It’s the combination of the two that has really gottentremendous feedback. After the boot camp, they go back as Agilesquads and apply their learning to their part of the business. Theybecome self-directed teams that are driven by data and marketrealities. This is what makes the program and the squad veryconducive to creativity and innovation. The improvement in theirwork is dramatic.”—Jon Iwata, senior vice president, marketing and
communications, IBM
Even with the best intentions, these missteps erode the benefits thatAgile innovation can deliver, as the model is built on a “cadre of eagerparticipants.” To succeed with the Agile model, as well as with digitaltransformation, organizations need to provide the right supportiveenvironment while trusting employees to get the job done in the new model.As the HBR authors pointed out, “General George S. Patton Jr. famouslyadvised leaders never to tell people how to do things: ‘Tell them what to do,
and they will surprise you with their ingenuity.’” Rather than give orders,leaders learn to guide with questions, such as “What do you recommend?”and “How could we test that?” This principle for success communicates,supports, and allows organizations to put people over processes and tools.Like the Digital Helix model, this framework has shown that it createstransformational results. Success can only happen if organizations, teams,and individuals let go of nondigital thinking and makeshift processes.
“Digital and the changes that it brings move at different speeds, andit’s sometimes hard to fit the pieces together seamlessly withoutwithdrawing or scaling back. Organizations and people should becautious and focus on the areas where you have traction to moveforward as opposed to pushing on those that are stalled. To getdigital right, you must have the right approach, which starts bygetting people to come together in a different and stronger way thatreinforces the digital goals, teams, and results. Look for low-riskstarting points and a good general direction for how you’re going toapproach digital, and then you refine it and make it better every daywith the help of the teams involved. This steady process is how youget people to realign to the new ways of digital and build a better,more agile workforce in the process.”—Rick Holgate, former CIO, Bureau of Alcohol, Tobacco,
Firearms & Explosives, current research director, Gartner
To succeed in digital, leaders need to inspire unity of purpose, unityaround information, and even unity over principles and practices. But inmost large and established organizations, this collaboration happens mostlyin small clusters, if at all. Startups, in contrast, tend to be digital by nature,which encourages more of an “all-for-one” mentality around a simple goal orobjective. This singular-purpose mindset is essential to binding people togoals. In larger organizations, this binding is difficult due to progressivelymore complex structures, history, geography, and organizationalcomplexities. As we have seen and the research proves, commitment todigital goals across teams with a startup mentality is essential for success.This commitment is where the concept of “all together or all for one, all thetime” comes in. The mantra may sound blindly optimistic on the surface, butin a digital world where all actions can immediately affect others and
decisions need to be made quickly, a common set of priorities is vital foraction and results.
Strong teams are something that successful digital organizations knowand understand, be it a small startup fighting to succeed and gain share or thelargest retailer in the world. If you look at Amazon, you will see a companythat acts like a startup at its core. The company uses its list of fourteenleadership principles to guide business decisions, as well as to guide thepeople, functions, and interactions across the organization. Anyone wholooks at these fourteen principles will see they include several keys togetting teams to consistently come together and that they have helpedAmazon become one of the most digital businesses on the planet. Read theseprinciples and compare them to your environment. Think about how youwould make decisions at Amazon and at your company if these were thefourteen things you hired on, evaluated people on, and based decisions on.
Digital PerspectiveHere are the fourteen principles Amazon uses across its business and forhiring and evaluating its employees:
1. Customer ObsessionLeaders start with the customer and work backward to earn and keepcustomer trust.
2. OwnershipLeaders are owners and don’t sacrifice long-term value for short-termresults.
3. Invent and SimplifyLeaders expect and require innovation and invention from their teams andalways find ways to simplify.
4. Are Right, a Lot
Leaders are right a lot. They seek diverse perspectives and work todisconfirm their beliefs.
5. Learn and Be CuriousLeaders are never done learning and always seek to improve themselves andbe curious about new possibilities and act to explore them.
6. Hire and Develop the BestLeaders raise the performance bar with every hire and promotion.
7. Insist on the Highest StandardsLeaders have relentlessly high standards—many people may think thesestandards are unreasonably high. Leaders are continually raising the bar anddriving their teams to deliver high-quality products, services, and processes.
8. Think BigThinking small is a self-fulfilling prophecy. Leaders create and communicatea bold direction that inspires results.
9. Bias for ActionSpeed matters in business. Many decisions and actions are reversible and donot need extensive study. We value calculated risk taking.
10. FrugalityAccomplish more with less. Constraints breed resourcefulness, self-sufficiency, and invention.
11. Earn TrustLeaders listen attentively, speak candidly, and treat others respectfully. Theybenchmark themselves and their teams against the best.
12. Dive DeepLeaders operate at all levels, stay connected to the details, audit frequently,and are skeptical when metrics differ. No task is beneath them.
13. Have Backbone; Disagree and CommitLeaders are obligated to respectfully challenge decisions when they disagree,even when doing so is uncomfortable or exhausting.
14. Deliver ResultsLeaders focus on the key inputs for their business and deliver them with theright quality and in a timely fashion.2
As you read these principles, notice they include topics such asownership, invent and simplify, learn and be curious, think big, and a biasfor action, among others. While this is a nice-sounding list, how theseprinciples are used across the organization is more important than the wordsthemselves. To quote Amazon, “Our Leadership Principles aren’t just apretty inspirational wall hanging. These Principles work hard, just like wedo. Amazonians use them, every day, whether they’re discussing ideas fornew projects, deciding on the best solution for a customer’s problem, orinterviewing candidates. It’s just one of the things that makes Amazonpeculiar.”3 Having worked with Amazon directly, we can attest to the factthat these principles are in fact used every day to bind teams, direct actions,and push everyone to find new solutions together that are not readilyapparent from a business-as-usual approach. In fact, while working withtheir B2B gift card group, together we revamped the sales motions, creatednew digital sales processes, and developed an entirely new digital contentmarketing and fulfillment system in less than four months. We saw firsthandhow the fourteen principles and having the right teams removed barriers thatwould have stymied efforts elsewhere. While Amazon is not unique in thisregard, they are a near-perfect example.
How do you ensure this level of binding in your organization? The secretis in the binding mechanism combined with a complete organizationalsupport and enablement structure. While some may argue about which ismore important—the rallying cry or the structure—research and experience
show you need both in concert so that your teams can work acrossboundaries to achieve great things. If you look at any great organization, youwill find that glue and a holistic structure supports it. The “glue” is theintrinsic bond that brings people and teams together for a common vision orcause, but it goes deeper as well. Looking back at Amazon, its goal is to bethe “most customer-obsessed company.”
Jeff Bezos has led that charge and inspired the vision and the steps tomake that goal a reality, but it is the fourteen principles that guide the teamsand people that help make the organization successful every day. As we haveand will continue to discuss throughout this book, Amazon takes risks andexperiments like no other company. This level of experimentation would notbe possible without their leadership’s commitment to hiring the right kindsof people and enabling and encouraging them to come together across everyfacet of the business to meet their goals. This simultaneously top-down,middle-out, and bottom-up way of getting teams and people workingtogether is what Jeff Bezos calls a “pioneer spirit.”
“When you attract people who have the DNA of pioneers and theDNA of explorers, you build a company of like-minded people whowant to invent. Creating is what they think about when they get upin the morning: how are we going to work backward fromcustomers and build a great service or a great product? This innatecuriosity is a key element to invention. This curiosity is the fun part,so if you’re the right kind of person that likes to invent and makethe world a better place, you’re the type of person that excels atAmazon. Over the last eighteen-plus years, Amazon has attracted abunch of people that have fun changing the game.”4
—Jeff Bezos, CEO, Amazon
Not every employee or team can adjust to a world where these principlesare applied as a whole, or even in pieces. The power of the all-togetherapproach is that it is fundamentally designed to bring everybody to the tableas equals as long as they have access to the right information. Think back tothe theme and stream examples we discussed and the new and immenseopportunities that information and data are providing. People and teams thatare finding new, creative, and innovative ways to harness this informationare the stars. Those who love going down different roads just to figure out
where they lead, even if they hit a few dead ends along the way, are the oneswho drive successful digital transformations. This innate curiosity leads to awillingness to experiment, push boundaries, and ask questions that mostdon’t ask. This mindset also leads to the creation of a binding that bringseveryone together around a shared goal or vision.
The ability to be successful with digital transformation in yourorganization largely comes down to taking a fundamentally differentapproach to enabling people to work together in an empowered andinformed way. A Digital Helix organization in action looks and functionslike a startup or digital giant like Amazon in many ways. Becoming a DigitalHelix organization starts during the hiring process and is constantly testedthrough a set of working principles that respect the role of teams andindividuals to solve problems as they occur and evolve.
Hiring, coaching, and talent development become huge catalysts fordigital. Like so many aspects of transformation, every department plays arole, and HR cannot be left out.
“If you think about the many different industries where there is aconsumer frustration with the legacy incumbent, you see onecompany trying to protect their position, their revenues, and theirprofitability streams. Companies find it difficult to move as theydon’t have a digital, innovative dynamic that thrives on change andfinding new answers.These people are protective and don’t want toupset the status quo within the business.They don’t want topotentially lose their own job, so they move things along slowly tomake sure that they’re secure.The ones that succeed run in essenceskunk works and use entrepreneurial-type groups that can go off toexperiment and challenge the whole company. Apple was themaster of this concept. Under Steve Jobs, the company wouldactually create completely different, independent units that werecompletely separate from the main business, whose job wassometimes even to destroy the main business. However, not manycompanies have the vision, leadership, or willingness to be able todo that. Unfortunately, for most organizations and leaders, it iseasier to live in a culture that maintains the current status quo thanto push toward change and build something new all of the time.”—Colin Crawford, investor, Loudr
Every successful digitally transformed organization combines aboundary-pushing vision with an innovative culture backed by keyprinciples that guide daily actions. Even if you get some or all of the otherDigital Helix components right, without enabling people to function togetherin a digital-first world, your helix is neither complete nor effective. Listeningdifferently, having executives who push digital barriers, seeing customers ashaving portfolios of experiences, and truly connecting sales’, marketing’s,and communications’ views of the world means little without having teamswith the right mindsets to use this new knowledge. As our research hasshown, having 90 percent of the right elements is often no better than having40 percent in place. This fact alone should push you to get 100 percent andnot waste time getting most of the way there for far less of the benefits.
Think this statistic is an overstatement? Think about the digital leadersand laggards in the world today. By all accounts, Walmart should havebeaten Amazon. GM should currently be the leader in electric cars, notTesla. There are hundreds of other examples like this where once leadingbrands did not innovate people, processes, and products to remain ahead.Amazon is again a great example of digital success. The company began as abook retailer and is now the largest web host in the world. That level ofinnovation is only possible if your organization brings people across teamstogether to ask the right questions and encourage the answers to be explored,no matter what the answer turns out to be.
If you are a senior executive reading this, your role is to drive all thepieces of the Digital Helix together for maximum success. In just this onehelix component, you should be able to see that executive leadershiprequires much more than just setting vision and providing encouragement.You and your organizations’ leaders, teams, and people need more vital andinnovative mindsets so that everybody can function at the pace of digital andcontinue to adapt to the change it brings. If you believe that humans areinfinitely valuable to your organization’s success, then your role has to beabout bringing them together every day in every way, all the time.
As numerous articles and case studies5 have pointed out, a shift isoccurring in talent management from one that focuses on outcomes to onethat is more focused on learnings. The key finding is that organizations havelearned that their focus when teaching problem-solving skills and developingpeople has to be on teaching those skills and the ability to handle aconstantly changing world. Digital transformations are, at their heart, human
development opportunities. With access to capital, technology, andinformation being more abundant than ever, the challenge is less aboutfinding talent than it is about knowing how to filter it and use it to drivetransformation.
The challenge is bringing people and teams together in the same way thatnew digital information comes together from disparate places and momentswithin and from outside the organization. For this to happen, we need tomake sure our people are up for and ready to adapt as the needs arise andchange. “All together” is a key component in this success. If you hire, train,and enable people to be together all the time in how they work with the sameease we now move data across functions and roles, we will be successful.What one element can bring groups together in the next thirty days?
CHAPTER 14
A
IN THE MOMENT AND ONE STEPAHEAD ALWAYS
“It is a mistake to look too far ahead. Only one link in the chain of destinycan be handled at a time.”
—Sir Winston Churchill
s we have seen in our work as well as in the work of numerous others,people and organizations promote and reward based on past
performance. But in a digital world, past performance often has little ornothing to do with future success. In fact, agility and willingness toexperiment are important traits in digital leaders, and past performancemetrics can often be gamed to inflate success. When companies focus onperformance and volume or sales metrics to the exclusion of othermeasurements, many individuals will provide lower goals. They know theycan hit these numbers and will be rewarded and even applauded for“exceeding expectations.” Surveys have even shown that two-thirds ofemployees tell colleagues that they set goals that they are “sure they canmeet.” This play-it-safe behavior, both at the individual and at theorganizational level, creates an environment where risk is avoided,experimentation is frowned upon, and underpromising while overdeliveringis the unwritten rule for success.
“A culture that supports execution must recognize and reward otherthings as well, such as agility, teamwork, and ambition. Manycompanies fall short in this respect. Agility requires a willingness toexperiment, and many managers avoid experimentation becausethey fear the consequences of failure. Half the managers we havesurveyed believe that their careers would suffer if they pursued butfailed at novel opportunities or innovations. Trying new things
inevitably entails setbacks, and honestly discussing the challengesinvolved increases the odds of long-term success.”1
—Donald Sull, Rebecca Homkes, and Charles Sull
Thinking about agility versus past performance and risk-taking versusconsistency are just some of the key questions we will all face time and timeagain in the new digital world. The tension between these choices is due tothe focus on efficiency and repetition versus a focus on the opposite, whichcomes with more potential risk and some levels of uncertainty. Alignmentand execution become a priori needs for many executives, and in keymoments the strategy often focuses everyone on one clear and long-termdirection. Leaders must set up the culture and mindset of the organization soit can provide the foundation needed for digital success. Otherwise, tweakingthe culture and living with the existing pre-digital mindsets that exist inevery organization become the unseen barrier that will relegate yourcompany to being an underachiever.
The ability to handle collaboration and the acceptance of the fact that noone strategy is perfect are fundamental to understanding how digital isdifferent at its core from the old-world bias toward efficiency.
When we have gone into organizations that are in the process of movingtoward digital, we have seen the tendency to handle stress by focusing onone issue and solution rather than developing alternative strategies upfront.In a digital environment, constant collaboration in design, delivery,reflection, and metrics can be a challenge for an organization used to atraditional single-focus approach. Beyond being challenging, this thinkingand action puts an even greater stress on organizations looking to maketransformative changes. If your focus, culture, and rewards systems favordoing the same things as before but with some small improvements, you arestill 180 degrees from transformation.
David Lee, COO and CFO of Impossible Foods, stated during aMcKinsey roundtable discussion on digital culture that “the true measure ofagility is what businesses you have seeded to replace the business that isdying. Often the timing doesn’t work. Transformations take a long time. It’sa fallacy to look at the initial results. Rather, look at the underlyingbusinesses that have high prospects for growth versus the ones that aredying.”3 This statement sums up one of the reasons many more companiesfail at digital transformation than succeed regardless of the challenge.
Revolution cannot occur without the bias toward evolution being broken bypushing, enabling, and encouraging extraordinary change that comes fromaccepting risks and moving to where the world soon may be, not where itwill be tomorrow.
In our research, we have seen that success comes from understandingthat there is no one perfect strategy for delivering digital transformationresults. A constantly moving world with shifting market dynamics requires anew philosophy combined with a strategy that aims to be one step ahead andcontinuously evolving. Think about the set of variables your organizationhas to contend with within your market and company as well as assets andliabilities that are truly unique to your organization at any time. Long-termplanning is too limiting and forces companies into a false “right pathforward.” You have to look ahead, watch trends, and adapt as needed.Planning needs to be based on a guiding framework for dealing with thisvariability. While it may sound nebulous and counterintuitive, there arepatterns for this framework planning that we have seen in our own researchand the work of others that will help you build this capability in yourorganization, now and moving forward.
Leading organizations consistently perform three elements of alternativestrategy development that are tough to copy but essential to success:
1. Being constantly open to evolution
2. Designing alternative strategies with extensive experimentation
3. Building large advocacy and support groups (see the section “DigitalTakes a Village and an Architecture” in chapter 5)
These three elements set the tone for digital leaders and create afoundation that moves beyond a single issue or long-term focus, which wehave discussed. Successful teams and companies are driven to be one stepahead and constantly open to evolving their approach, tactics, and focus asthe situation warrants. Even the mere openness to identify new possiblepaths (usually from the top with an executive as a digital explorer) sets thestage and provides the entire organization with the freedom and liberty topush limits and evolve. In truly successful firms, like Zappos for example,this way of thinking is part of the culture and DNA of the organization.Zappos and others who adopt and internalize this mindset see evolution asthe most natural and best way to use their knowledge to push the boundaries
of the business and their opportunities. These organizations train their peopleand teams to think about what is next and what borders are possible.
“To move toward a new digital foundation, you stop feeding the oldsystem you are using. You need to start right now with smallcustomizations and programs that show the right style and right wayforward. Once the results start flowing in, it opens your team’s eyesto what’s possible in their world and the whole of the business.”—Jud Barr, president, JTB Consulting, LLC
Another key ingredient in most successful digital and socialtransformations is that leading brands deliberately design alternativestrategies and do extensive experimentation before they commit to an initialkickoff. As we have mentioned, digital enables experimentation like neverbefore. The ability to source, test, validate, and propose “what ifs” canhappen quickly, easily, and immediately before an organization must fullycommit. It is in these quick one-off moments that winners find the strategies,tactics, features, and insights that are worthy of full organizational supportand resources. In success and in failure, these tests are illuminating for whatthey reveal to a keen digital enterprise. Look at Google. We have marveledat dozens of their successful experimentations and derided many of theirfailed attempts. But every success and every failure provided data andinsights to improve their business and keep them one step ahead. WhileGoogle Glass did not take off, the knowledge about mobile use, activities,and patterns for connected devices is already helping them in ways that arenot readily apparent to the end user.
In addition to having the openness to evolve and the willingness toexperiment, there also needs to be a built-in advocacy and support system tobring ideas to fruition. Having the desire and ideas means absolutely nothingif the resources and wherewithal to incubate and grow are not robust enoughto make the dream a reality. Organizations must go beyond simply changingattitudes. Yes, the company and key individuals have to be supportive. Butthere needs to be time, resources, and opportunity to plan and push forevolution as well. Far too often, great ideas die, or in the Internet economybecome stand-alone ventures that should have helped propel or give neededinsights to their corporate parents.
“The mark of a great leader is when people in the organizationinteract with the head of the organization, do they feel smarter or dothey feel stupider? Great leaders are seen as leadership ‘geniuses’when they make individuals feel smarter and inspire them to pushtheir vision forward. The challenge comes; does that visionempower us to collaborate, share, explore, and experiment indifferent ways?”—Michael Schrage, research fellow at MIT Sloan School’s
Initiative on the Digital Economy, oversees research on digitalexperimentation and network effects, and is author of TheInnovator’s Hypothesis
In today’s world, brands must live up to customers’ high standards,providing consumers with fast, free, instant delivery as well as numerousother amenities. The ability of companies to provide this retail experiencecame from experiments within Amazon. Before Amazon offered freeshipping on orders over $25, any retailer would’ve told you that the mathand economics don’t work to support this. But differentiation and being onestep ahead with customer desires pushed the company to run the experiment.Not surprisingly, Amazon found that Super Saver Shipping (as Amazonrefers to it) on orders over $25 (which has since been changed to $35) didnot make good economic sense in the short term. But they asked a differentquestion around customer values and brand loyalty. Using these metrics as aguide, the company saw free shipping dramatically pays off in both amountand frequency of purchases, thus increasing the lifetime value of almostevery customer. All these delivery innovations could have come from otherretailers or even shipping companies like FedEx or UPS. Being open,experimenting, and having the right internal structure enabled Amazon tobuild differentiation while keeping themselves one step ahead of thecompetition trying to copy them. Amazon is now looking into drones as astrategy to rewrite how delivery is done without using shippers asmiddlemen. The company is even piloting a program to deliver packagesdirectly to the trunk of your car by partnering with Audi and DHL. Amazonrecently introduced their Internet-connected “Dash” devices, which let youorder items from an enormous online store with a single press of a button.The product has been wildly successful and has seen a 50 percent increase inuse in just the first year. This level of success happens when the organization
is set up right to take advantage of evolutions and revolutionssimultaneously.
“Experimentation can be a precursor to innovation, so make surethat you’re always experimenting.”4
—Jeff Bezos, CEO, Amazon
One significant advantage of this combination of commitments is theability to deliver new social and digital transformative programs twice asfast as organizations without alternative strategy models or extensiveexperimentation. From our own work and research, we have seen programlaunches happen more than twice as fast (75 days versus more than 150days) than for those who do not adopt this mindset. Moving twice as fast notonly brings speed but also provides the ability to run twice as manyprograms and gain advantages over the competition. In addition,organizations with this approach can also adjust strategy even more quicklyby taking a greater range of inputs and outputs from their programs. In thiscase, speed kills the competition if it is organized properly. Digital leadersunderstand and think as much about the strategy as how to corral the rightresources to constantly be pushing to be one step ahead.
But this speed and power is not unlimited. Even in the digital world withthe promise of almost infinite scalability, it does not mean that each strategyor set of tactics is infinitely scalable. This is an important paradox tocomprehend. In a world of increasingly gray strategic choices, thepsychological tendency is to grab onto something and ride whatever it isuntil it is exhausted. But this strategy is not one step ahead. In reality, leadersin digital transformation are extremely aware of the need to continue to pushboundaries and not accept hunkering down in one place, even whensomething is working. Going back to the Amazon example, even when freeshipping was working, the company was busy developing Prime to speed upshipping and provide more value in the form of downloads. Shipping is justone part of the total offering, and according to Amazon, Prime is one of theirmost effective worldwide marketing tools.5
It is also important that we talk about measurement here. Whileexperimentation and openness to evolution are critical, having the rightobjectives and metrics in place cannot be understated. As an organization,you need to be able to define what constitutes success. As we have
discussed, this has to occur even after failures. But to accomplish this, thecompany and leadership must have the right framework for not only what tomeasure but also what insights or information they hope to gain beforeventuring down the path. If an experiment is done right and for the rightreason, there will always be some form of victory, even in defeat. But youhave to know what to look for before you get there.
“Based on the work I do at MIT, both as a teacher and as an advisorto organizations, I can tell you that the quality of analytics in anorganization is either a driver or barrier to results. The ability tohone in empirically, analytically, and experimentally on your bestcustomers and your most likely prospects has really dramaticallyimproved. Companies that choose to be data-driven in sophisticatedways (we are likely talking about no more than the top 10 or 15percent of organizations) get a rapid accrual of benefits that aretransformative. These organizations know what to focus on in themyriad of choices to get to both the most efficient and effective wayof investing for their customers, market, product portfolios, andoverall business.”—Michael Schrage, research fellow at MIT Sloan School’s
Initiative on the Digital Economy, oversees research on digitalexperimentation and network effects, and is author of TheInnovator’s Hypothesis
Digital transformation winners understand the need for the rightcombination of strategies. For example, in effective digital and socialtransformations, “Thrivers,” or social media leaders, routinely commit toonly four types of eighteen social content strategies available. They focus ontraining, stakeholder Q&A, product strategy, and executive communicationsto thrive and stay ahead. Others, who are less successful, tend to use manymore. Leaders recognize that a great content strategy is about a uniquecombination of ideas and the right combination of approaches. Theseexecutives understand that focusing only on one area or even naturallycomplementary areas, like crisis management and executivecommunications, cannot deliver the results desired the way the right paletteof strategies can.
“Greatness requires deep focus on the right factors and rightelements. Understanding and fine-tuning where to spend your timeand energy is quite literally the difference between being great andaverage.”—Dr. Michael Gervais, consultant to world-class athletes and
teams, cofounder, Compete To Create Consulting
To be successful with digital transformation you need a strongattachment to the Digital Helix as this philosophy plays itself out across theother six components in the framework. For example—
Leaders should always be pushing the boundaries of great performance,both in the speed of execution and the constant quest of envisioningwhat is next.
New information sources and identifying new ideas are essential tohelping push the boundaries of what is next strategically.
Focusing constant attention on the key elements of the customer’sexperiential portfolio enables organizations to not just execute better,but also to identify and naturally step ahead toward the next strategicopportunity.
Marketing and communications should leverage their flows to identifyand tap into potential next steps.
Sales moments become more immediately understandable if we arelooking for how they are evolving.
These components can only work if the organization’s collectiveinvolvement in knowledge and processes comes together andeverybody is responsible to each other.
This is a severe departure from the old world where the idea of “in themoment” historically offered insights about being more efficient. The digitalworld sees “in the moment” as more about learning what an organization canor should do, not do, and how to gauge performance potential to moveforward. This shift in understanding and a focus on constant change is at thecenter of successful digital transformations. Think about it this way: Youcan’t be “one step ahead” if you don’t know the alternatives. These
alternative options need to be planned before and in parallel to activities thatorganizations are doing now. Companies also need to be open to building onthese alternatives as the situation warrants and on an ongoing basis.
“Many companies go after alternatives looking for the data theyneed like it is a needle in a haystack. With the gobs and gobs of dataout there, trying to find the right data that makes sense at anymoment in time is a challenge that distracts teams and leaders.Many organizations tend to wallow in the noise. The bestcompanies work to find the right signal-to-noise ratio, and moststart with a pretty simple premise to guide them. Using a customer-centric or customer-first approach and pushing to find alternativeways to deliver new value to the customer is their ‘secret sauce.’Looking at all the enablers within the company, being open to off-beat options, and having the right digital tools can enable all of us todo that a lot more and stretch ourselves to deliver the next big thingfor our customers.”—Colin Crawford, investor, Loudr
Now go back to the question we asked earlier about whom you wouldpromote. Would you still choose the person who has executed flawlesslytime and time again or the person who has pushed boundaries? In fact, mostorganizations need both great strategists and great executors. But since manycompanies still default to old paradigms, the question stands as a clearexample of how many create false choices. To be one step ahead and in themoment, you clearly need a balance between the skills of the two candidates,plus a capacity to ask why (to identify the alternatives) in order to executefaster with digital knowledge as the guide.
Digitally transformed corporations also have the ability to constantly askquestions and get feedback from multiple parties to determine the next set ofalternative strategies the organization should be looking into. This ongoingsearch for new answers can put enormous pressure on the organization toexecute. But as with each of the other six digital DNA components, lookingahead is vital for highly successful and sustainable transformations. Thecapacity to be effective and stay one step ahead is often why digital startupscan better adjust to the current world; they inherently live in the moment andoften can only think of the next logical step.
A clear example of how this thinking manifests itself comes from a jobinterview early in one of our careers. The recruiter for a Fortune 100 brandasked a question designed to be calculated in one’s head and to see how acandidate thinks. The question provided a set of parameters and focused onthe resources needed to harvest a set of fields. According to the interviewer,the correct answer was 196 harvesters. When asked how the hell somebodycould justify buying or leasing nearly 200 harvesters, let alone parking,manning, and even coordinating them, he was left dumbfounded. Using 196harvesters cannot be the most efficient way to accomplish any task. Yet, inthe moment and given strict rules and information, 196 was the right answer.
Increasingly, long-term strategies must not rely solely on thetimehonored parameters we always use or default to. As we have discussed,almost every successful startup that has achieved scale over the last decadeor so has redefined the boundaries by thinking about what is possible. FromFedEx looking at overnight delivery by shipping everything to Memphis firstto Uber redefining the pay-for-transportation model, companies that lookone step ahead have and will continue to change what is possible andprofitable. In the digital world, there will always be one or more teamslooking to change the question, the frontiers, and the thinking in order togain an advantage or launch a new business that eats into existing ones. Thequestion is, will you be the one changing the question or the one being eateninto?
E
CHAPTER 15
BUILDING OPTIMAL MINDSET ANDCULTURE
“An organization’s ability to learn, and translate that learning into actionrapidly, is the ultimate competitive advantage.”
—Jack Welch
ven with all the right moves, investments, and strategies, digital doesnot work if the organization is not prepared to support it culturally.
While there are any number of ways you can have or build a great cultureinside your business, digital requires a digital culture mapped to the needsand priorities of an accelerated and constantly informed business. Digital isthe engine for business success, and culture is the fuel to keep it running attop speed.
Research conducted by ourselves and others has consistently shown thatno matter how much you transform your business, you have to have theright culture to reap the rewards. Winners build digital cultures across allelements of culture (vision, values, practices, people, narrative,environment, and many others) to provide the basis for success. Thinkabout what this means for your organization when you factor in the SevenDrivers, Seven Challenges, and Digital Helix components. For example,think about how the right culture is needed to support new digital metrics.These metrics help guide the business and require new forms of thinkingand acting to capitalize on their results.
Organizations need to have the right digital culture that encouragesopenness to thinking about alternative strategies upfront and that allowsextensive experimentation along the way. How many of us have worked fora great company that did not support and reward this behavior across theorganization? And this is just one aspect of a digital business. A case couldbe made for all of the challenges, drivers, and Digital Helix components.
“Digital requires rigorous thinking and an acceptance that yourcultural norms have to change.”—Michael Schrage, research fellow at MIT Sloan School’s
Initiative on the Digital Economy, oversees research ondigital experimentation and network effects, and is author ofThe Innovator’s Hypothesis
The key to getting any culture right, especially a digital one, isempowering individuals on a daily basis to put themselves into a moreoptimal mindset. The fact that much of the success winners experience isowned and managed from within suggests that peoples’ skills and mindsetsare vital ingredients for success. Leaders and department heads have toenable this transition in thinking and acting to make digital transformation areality.
“Everyone wants really highly successful people, functioning attheir best and delivering really good results. This takes acommitment to the right culture. When introduced to new people,settings, and ways of doing things, there’s a transition period. Theorganization has to be committed to teaching the ideas, theconcepts, the principles, and the beliefs and showing what greatlooks like. To succeed, you have to find people with the rightmindset to pass on the message and the mentality to maintain it andsupport it. We start by trying to make people appreciate andunderstand that the new philosophy is really valuable and a greatway to elevate performance, re-create success, and establish thefoundation for the long term so everyone and the organization canfunction at their best.”—Pete Carroll, head coach, Super Bowl Champion Seattle
Seahawks
This is a huge shift. For the better part of three hundred years, humancapital and function has centered on the primary value of people beingsiloed in specific functions or departments. That was the power ofeconomies of scale and the process that Adam Smith promulgated in TheWealth of Nations. People were a part of the system, not necessarily thesystem itself. But even with Smith’s breakthrough in thinking, it is notuncommon today to see old-world cultural elements in digital-eraorganizations.
“The biggest risk is not taking any risk . . . In a world that ischanging really quickly, the only strategy that is guaranteed to failis not taking risks.”1
—Mark Zuckerberg, founder and CEO, Facebook
To get to the level of optimal mindset, you must dive into the heart ofhow you help develop the people and culture in your organization. The keyis to build a high-performance culture with diverse teams and individuals.This is no easy feat and requires new skills, mindsets, and knowledge forleaders and teams alike. One of the world’s leading practitioners in culturaltransformation in high-performance environments is psychologist Dr.Michael Gervais, consultant to world-class athletes, teams (including theSuper Bowl champion Seattle Seahawks), and Fortune 100 corporationsundergoing massive digital transformation changes. He has helped teamsand individuals set themselves up for the creation and ongoing fueling ofoptimal mindsets in highly complex and competitive environments.
His expertise is invaluable, as he has succeeded in transitioning bothteams and individuals from good to great and has helped people do thingsthey might have never imagined to be possible. This is the promise ofdigital transformations. Remember, less than 20 percent of businesses getdigital transformation right and see an economic benefit. The difference inwinning and losing in a market or against a competitor often comes down toa handful of moments that make or break the quarter or the season. Inaddition, pro sports, the NFL in particular, are some of the most competitiveand fast-paced environments in the world. Teamwork and performancematter every second of every day, including during practice. This is theworld Dr. Michael Gervais excels in and helps others to succeed in evenwhen faced with world-class competition. He, perhaps better than anyone,
understands how to shift the psychology of your organization and capturethe innate capacity of your most important asset, your people.
We asked Dr. Gervais a series of questions about high performancedesigned to understand what the key components of an organization need tolook for to be successful now and in the future.
Question 1: What are the characteristics of organizations that seem to beable to make these cultural and high-performance leaps from where they arenow to where they’re heading?
“Over the course of being in the trenches with some of the mostdynamic performers in the world, there are some common traits we see,from the environment they work in to their team setting to their internalmakeup. One of those characteristics is a deep, deep curiosity towardmastery. There is an obsession with driving forward and mastering aprocess. At the core level, I’ve found that people are highly engaged inimprovement. That deep drive toward mastery, with a curiosity of how tobecome better on a relentless basis, is one of the core factors allowingteams and individuals to continue growing. As soon as somebody becomeslocked in, or they are smacked in a place where they have all of theanswers, then we find stagnation and they stop growing. So, the firstvariable is this deep, intrinsic interest in growth and curiosity aboutmastery.
“The second variable is that people have a command of themselves.More specifically, they are able to handle themselves in quiet moments,rugged moments, and very hostile moments. This ability comes fromhaving a rich awareness for who they are, how they express what they’reworking to develop, and how they express their craft. It sounds like amouthful, but this approach and awareness helps individuals interface withtheir dynamic environments. If you couple the deep awareness they haveabout experiencing a moment-to-moment basis with a deep hunger andcuriosity of how to grow and get better and progress, the combination tendsto be an accelerant for sustained performance.”
Question 2: How do people learn to take risks?“This likely comes from the way our parents first taught us about
learning, and there is one of two ways where this at least takes place. If ourparents were hypercritical of the way we took risks, then we might learn
something about the process of learning, since risk-taking is required tolearn. Expressing or demonstrating what we’ve just learned is part of therisk-taking process. Environments that truly value when people take riskshelp people become curious and interested in what might be, as opposed tobeing fearful of what might not work right.”
Question 3: When you look at this at an organizational level, is it fairlyeasy to understand which leaders have both the capacity and the desire fortaking risks, and also the propensity for handling failure?
“For companies, I think that the ecosystem is naturally orientatingtoward capacity for curiosity or the propensity to handle failure. Startupsare more interested in rapid iteration and in getting it right. But they alsohave a tolerance for making mistakes because the idea or ideology is to getsomething into the world. On the other hand, large and establishedcompanies have a history of winning and tend to play it safer. These largeorganizations focus more on accountability and metrics. This concentrationis deeply embedded into the ecosystem, and thus more caution exists foremployees, managers, directors, and leaders because if they make mistakes,the errors are likely recognizable and are often not understood by theorganization.”
Question 4: If you are the CEO of a Fortune-type organization and you’refacing prototypical new-world pressures from agile startups, how do youincubate and then solidify potential test examples of successful digitaltransformations?
“What I’ve come to learn is that whether we refer to a startup, a largecorporation, an individual athlete, or a collective team, human performanceis met by our most precious and fragile resource: time. We need to get ourarms around the idea that time, meaning this moment, is our most preciousresource. Also, we need to understand that time is extremely fragile,because as we are talking, the last moments that first started thisconversation are now gone. Time is the vehicle in which we experience lifeand relationships, and performance is expressed. If we can help ourindividual performers increase the quality and the frequency in which theyexperience moments, then a dramatic increase in output will result. Thepace and the current way of living right now occur at unprecedented speeds.We’re in the midst of an evolutionary adaption. This adaptation is forcing
people to shut out irrelevant information in our time-compressed, rapid-paced life and business environment. Those who are able to shut out thisirrelevant information will have a competitive advantage to performoptimally in environments that naturally have challenges. We are in a fast-paced environment where changes occur at an unprecedented pace. We, asleaders, need to train people’s minds to better adapt to being in chaoticenvironments.”
Question 5: Can we train mental skills so that we have the ability toperform under pressure in these fast-paced environments?
“There are many mental skills that we know are trainable. Thediscipline of sport psychology has taken a scientific approach to understandhow world-leading performers train their mind to excel in pressure-packedenvironments. In the global business world, there is a sleeping giant that,once awake, will create a distinct competitive edge for employees andleaders. This advantage is not just about performing better during high-intensity contexts, but rather teaching and training the minds of theemployees to be able to use the speed and pace of the modern-dayworkforce to their advantage.
“The pace and speed of modern business only becomes problematic ifwe lack the mental skills to thrive in those environments, or if we are notrecovering well enough to be able to sustain the required output.
“It is not the actual speed of business; it is the pressure that weexperience that prevents us from operating in real time. Pressure is the forcethat creates the belief that we have to think or do something faster than wemight be capable of. For some people, the fast-paced environments areaccelerants to performance. Those folks benefit mostly from training themind to recover well. For some, the speed of the global business becomes abarrier to performance because it applies pressure to the mindset of theperformer.”
Question 6: What are some common pressures people face that hinder theirperformance?
“Pressure comes from fear of criticism, performance expectations, fearof looking bad, as well as the natural demands of deadlines andpresentations. Most people are highly motivated to perform well but havenot been taught or given the chance to properly train their mind so that they
can excel in situations where they typically feel anxiety, tension, agitation,or straight-up panic. It seems absurd that we would train our craft (creatingbeautiful content for a presentation, for example) and not train our mind(having command of ourselves during that presentation), but therein lies theopportunity.”
Question 7: What are ways that people can train their minds to excel in themodern-day conditions of global business?
“First, make a decision. Make a decision to train your mind so that youcan live an authentic life more freely and more often. Once this decision ismade, with a real commitment, you are on your way. Now the search for themost effective methods to train your mind begins.
“Second, train your mind to become more aware of the thoughts thatbuild an optimal internal state for you. Invest in those thoughts bypurposefully guiding your mind to one of these two types of thoughts:positive thoughts that are backed by real experiences in your past and giveyou the right to know that you can do difficult things in this moment. Thisis a commitment to be very clear about the types of thoughts that fuel thebest version of yourself, that come from real experiences in your past.
“Third, just breathe. While you are becoming more aware of yourthoughts, start becoming more aware of your internal activation level. Thebest way to think about activation levels is to imagine a scale from 1–10,with a 7, 8, 9, or 10 representing too much internal energy to perform andthink optimally. An example of a 10 would be physically shaking rightbefore a performance or presentation. On the other hand, on this scale, a 1,2, or 3 is not having enough activation to be able to think optimally. Anexample of a 1 would be just getting out of bed. To have control over youractivation level, just breathe. Deep breathing sends signals to the survivalcenters of the brain that we are safe. Deep breathing well is a trainable skill,and makes an immediate impact on finding an optimal activation level.When people are consistently too low on the scale, it might be an indicatorthat they have not recovered well.
“Lastly, recover like a world-class performer. Getting adequate sleep,eating healthy, drinking water, and incorporating more movement in yourday are all part of a recovery plan for people to be able to wake upconsistently with fire, zeal, and zest.”
Question 8: Walk us out five, maybe ten years from now. These changes inthe work world and even at home feel exhausting. How much is fatigue anissue in driving these types of changes?
“To be good or even great at something, an incredible amount of time,energy, passion, grit, and deep focus needs to be crafted. To do all of this,an exorbitant amount of fuel is required. What’s amazing about the humanexperience is that we can do difficult things for long periods of time, butevery organism is bound by the same constraints of stress and recovery.There is an interesting paradox here, which we need to overcome to makedigital transformations work. It’s like the workforces of many world-classorganizations are fatigued. This is because they and the organization havepushed so hard to handle the pace of information coming in at its currentand ongoing pace. There is a ratio between deep curiosity and interest ofmastery for not only finishing the job now but also doing it right to preventpenalization, demotion, or the chance of being fired. I believe that we needto be careful and mindful of the current working conditions, which requireincredible amounts of energy from employees to become great. With thepace at which we’re driving without the necessary recovery mechanisms tosustain such a high level, I fear we’re going to find that our fatigue in manyof these workplace environments will turn into deep staleness. Thisstaleness results directly from not managing the recovery process well. Bydefinition, staleness means that there’s a lack of zeal, zest, spunk, and life indaily engagements, both in the workplace and at home. I can only imaginehow this boredom would affect the cost of creativity, innovation, andprogression.
“On the other hand, there is a potential upside for those that get ahead ofthis current fatigued workplace. If an organization can become aware andcare about the possibility of fatigue, then the opportunity is very exciting. Ina sporting context, if two talented teams are going to be competing and oneis highly fatigued and not in an optimal state and the other is recovered andfinely tuned, then the well-recovered team is going to have a competitiveadvantage. Like in business, this is where the gap between competitorsbecomes easily noticed and winners start to separate themselves. I think thata fork in the road will develop, separating successful organizations fromlaggards. Those that understand the value of human capital and the recoveryprocess will be able to deliver sustainable and optimal performance.”
Question 9: What two guiding principles do these changes lead us to thinkabout?
“Number one, the highest-performing individuals, athletes, andorganizations embrace the combination of taking risks and failure hand inhand. This appears to break many of the codicils of twentieth-centurycorporations.
“Number two, in a world where risk and the ability to decide how tomanage information that matters (signals) versus information that doesn’tmatter (noise), filtering will help decide who wins and who does not. Butthis can only happen if these individuals are in a healthy workforce that isnot too fatigued to see the differences when it matters.”
If human capital is at the heart of the most successful digitaltransformations as we, Dr. Michael Gervais, and numerous others suggest,then we need to cultivate and enable it. Encouraging the capacity to strivefor achievement through the rapid prototyping of ideas (alternativestrategies) and actions (new ways to combine certain forms of execution)are essential nourishing mechanisms for the digital transformation process.Having the time to become more curious and to continue a thirst forlearning might be the fuel your teams need. We encourage you to think hardabout four high-performance and cultural development questions as youmove forward at an ever-increasing pace in your digital transformationjourneys:
1. Have you helped develop a new, more robust culture encouraging thefundamental acceptance of the need to accept and encourageexperimentation as well as relevant failures?
2. Do you help your teams siphon or filter information from noise and focuson key signals?
3. Are you thinking about how to balance the energy levels and recoverycycles needed for people increasingly stressed by constant change andrapid pace?
4. Are you investing in people and their ability to train the mental skillsneeded to perform at a high level?
If you want a true digital transformation to occur and not just a digitalrepackaging of current business practices, then the soul of your organization
and how you reward, stimulate, and encourage people has to change.Acceptance of failure and having a high index for the capacity to learn andadjust is vital. The Digital Helix benefits we discussed can only bedelivered through a fundamental change in the mindset and behaviors oforganizations at an individual and collaborative level. In fact, each of theseven Digital Helix components collectively demands other underlyingevolutions.
Following we define how critically changing mindsets and cultures areessential for success across the Seven Digital Helix components.
Executives as Digital ExplorersThe key mindset shift here is the constant need to push boundaries outsideof comfort zones within the unknown areas of the business and digitaleconomy issues. The executive needs to have the right mindset to leadaround these new principles and empower his or her teams to be mindfuland able to handle the growth and pace required. Digital transformationinvolves changes in decade-old underlying assumptions, as well as thecapacity to handle failure and potential ambiguities as we learn far more onthe fly. The capacity to challenge age-old assumptions engrained in formaland informal learning is vital. The executive needs to let go of the instinctto control and lead more by exploring and filtering the good from the badinformation as it happens. The new optimal mindset for the executive isleadership through learning, collaboration, and speed with experimentation.
Theme and StreamInformation is quite different in the Digital Age. Great digitaltransformations require that organizations know how to handle the constantunderlying evolution of the value of information born fromexperimentation. Changing mindsets to see information in connected versuseureka moments requires a confidence to break out from the abundance ofnoise and volume and to live in moments as they occur. This shift requires astillness that can only come from developing a more optimal and high-performance mindset. It is so difficult to train ourselves to ignoreinformation, but that is now part of the success factors we need to adopt and
embrace if we want to thrive with digital. Knowing when to abandon orrecategorize the value of information is also vital. This also requires a levelof risk-taking, which is encouraged but rarely rewarded, and is nowessential for success.
Customers Have Experiential PortfoliosInformation is coming from everywhere: the Web, social, sales, customerservice, friends, partners, etc. There might be hundreds, possibly thousandsof inputs that change in value for customers and for us over time.Customers are aware of all these stimuli and in fact have developedradically different levels of high-performance mindsets to handle them well.To give you some perspective, the average consumer sees between twelvehundred to five thousand messages and views about 15.5 hours ofinformation a day, and this amount is increasing every year. Our businessmindsets need to be reengineered to handle this volume of complexity inthe same way we do as consumers so that we can support our customers’portfolios along the way.
Marketing and Communications as a FlowMihaly Csikszentmihalyi’s seminal book, Flow: The Psychology of OptimalExperience, talks about methods for managing this constant deluge of tasks,information, and decisions. The act of moving to a more customer-centricapproach and understanding how we intercede between those momentsneeds a more connected process between marketing and communications.Success needs to be orchestrated by a fundamentally different mindset. Thisneeds to be driven by a collaboration-first mindset (and not territorialthinking and behavior). Success must also be focused on the customer’smoments and how all forms of marketing (demand, brand, support, thoughtleadership, crisis management) meet those moments. Leaders need to beconstantly curious and open to continual testing and new thinking. Old-world models of singular cause and effect no longer prevail in the digitalera.
Sales Are Connected MomentsRecognizing what types of moments matter is a vital skill for a sales leader.We have talked about simple, connected, and sequenced moments startingto prevail in the digital economy. For salespeople to handle this, they haveto sense and feel the process a customer is going through and the rightmoments for interaction. These are classic skills muddied by the enormityof choices available to customers. You can’t just be good at recognizing onemoment. The skill is to know most if not all of the moments possible foryour customers. Again, curiosity and a capacity to know how and when tofail are vital and often unrewarded attributes. High performance in sales,like for athletes, is more about the capacity for risk taking and rapidlearning.
Everybody Together All the TimeInformation flows 360 degrees in the digital corporation from almostinfinite places. We each need to collaborate so we can pass information toand from each other because we all collectively benefit or suffer in the sameway. Knowing when and how to share, collaborate, and connect is part ofthe Digital Helix. This individual and collective responsibility can only beachieved by breaking down traditional and successful boundaries set up inthe departmental hierarchy of corporations. Collaboration and sharingrequire a sense of shared purpose and the capacity to potentially sacrificeour biggest asset, time, for the collective value. We might not be rewardedfor it and we may not even understand why we are doing it, but we needconfidence and the capacity to push for the greater goal rather than beingblindly resolved to failure without a chance to control the result.
In the Moment and One Step Ahead AlwaysThere is a quote that sums up the essence of the book Flow: “There are somany moments that we have to divide noise from genuine signal.”2 Theworld is littered with examples of people not paying attention to thesecurrent moments and then not watching or listening to the next piece ofevidence that matters. We have talked about the Apple Watch, Uber, and
Amazon Web services as examples of digital business models that wereignored in their initial moments because organizations (Swiss watchmakers,taxi companies, and hosting and cloud companies) failed to see theimmediate threat and the next steps in their progress. Instead, thesecompanies relied on old-world logic of how to react, rather than usingdigital to move ahead.
As Dr. Michael Gervais mentioned earlier, winning in business and insport comes down to a set of key moments. These moments can change inimportance for the company or marketplace far faster than ever before. Ittakes a very different mindset and culture to be present now and also to be alittle ahead of that moment. The best athletes have an ability to see thingsslightly ahead of the curve from the others they play with. It is thiscapability in business along with the mindset to react that separates theleaders from the losers in any given market.
“On the job people feel skillful and challenged, and therefore feelmore happy, strong, creative, and satisfied. In their free timepeople feel that there is generally not much to do and their skillsare not being used, and therefore they tend to feel more sad, weak,dull, and dissatisfied. Yet they would like to work less and spendmore time in leisure.
“What does this contradictory pattern mean? There are severalpossible explanations, but one conclusion seems inevitable. Whenit comes to work, people do not heed the evidence of their senses.They disregard the quality of immediate experience, and base theirmotivation instead on the strongly rooted cultural stereotype ofwhat work is supposed to be like. They think of it as an imposition,a constraint, an infringement of their freedom, and thereforesomething to be avoided as much as possible.”3
—Mihaly Csikszentmihalyi
None of the concepts in this chapter—risk-taking recovery, a desire ofachieving true mastery, and being open to experience the true value ofmoments—are complex. However, as evidence has shown, it is difficult toachieve them. Having the right mindset to reward and encourage your
teams and individuals gives the organization the fuel needed to drive thedigital engine to transformation success.
“When we think of culture and high performance, we focus onassisting people to achieve their greatest potential. The care that ittakes and the love that it takes to truly help somebody be their bestis a powerful sentiment, and I think it’s a motivating, inspiringsentiment when you really mean it and you really act on it. I thinkthe commitment to that is so valuable in terms of leadership, interms of production for people and so important in creating theenvironment where people can be their best. That’s what the wholeeffort is about.”—Pete Carroll, head coach, Super Bowl Champion Seattle
Seahawks
We are moving to a world where digital will be the norm, and gainingadvantage will be critical and difficult once almost everyone is transformed.With that in mind, how will you set your teams up for success and build theright mindsets? When we are all digital, the ability to truly use wearabledevices, meditation, and other “personal” tools for business may be one ofthe few items to separate you from your competitors. Are you ready tocompete alongside others who have refocused their organizations on thepower of mindset and cultural change and see how far we can all take it?
A
CHAPTER 16
OVER THE HORIZON TO A BRAVE NEWWORLD, FOR SOME OF US
“My interest is in the future because I am going to spend the rest of my lifethere.”
—Charles F. Kettering
ldous Huxley and George Orwell each painted somewhat dark viewsof the future, one dominated by central controls and the other
somewhat despairing and inhumane. But the digital future is bright withopportunity. However, this opportunity can also blind some. As digitalbecomes the preeminent way of business and life, many may make themistake of ignoring the almost simplistic inevitability of a fully digitalworld. The UK government’s “Digital Inclusion Strategy” policy papermakes an obvious statement that strips away the complexity of experts.
“Being digitally capable can make a significant difference to individualsand organizations day to day. For individuals, this can mean cuttinghousehold bills, finding a job, or maintaining contact with distant friendsand relatives. For organizations, going online can provide ways to reachmore customers and reduce operating costs. The Internet also providesbroader benefits by helping to address wider social and economic issueslike reducing isolation and supporting economic growth.”1
Most of the focus of this book has been the journey toward exceptionaldigital results and helping more enterprises and agencies win and see
results. If we assume the future will see both winners and losers, thenunderstanding and getting the future of your organization’s role right reallymatters. Failure to do so might leave you and your teams looking at a digitalversion of Huxley’s or Orwell’s view.
Ten Years from Now and a Look at PossibleFuturesWe believe that key elements of digital will be quite different in ten years.From our conversations with experts across technology, psychology, social,and organizational dynamics, we have identified a core set of principles toframe your future plans. To be clear, we are not trying to predict the future(that is too easy of an exercise and almost always fails the test of time). Weare instead trying to lay out some ideas that are going to be key issues andpotential challenges going forward. Be advised that some of these mightsound strange, but your organization’s ability to navigate these potentialchallenges could well determine the difference between winning and fallingbehind in the digital future.
Getting Signal-to-Noise Ratios Right Is CriticalIn his book The Power of Noticing, author Max Bazerman showcases someof the twentieth century’s greatest blunders around missed informationindicators from the space shuttle Challenger disaster to a whole range offinancial market misreads and more. The underlying tenent is that in aworld of vast chunks, waves, and moments of information, it’s vitallyimportant that listeners are able to break through noise and get the rightsignals. Getting the right message demands, as we have talked aboutthroughout the book, diverse personal and organizational skills (especiallythe theme and streams portions). With the Internet of Things pumpingbillions of pieces of data to us all the time, combined with real-timedecision-making for suppliers and customers, we are going to have to livein a world with more data (and thus more noise) than ever imagined.Customers will have far more control over what they see, hear, experience,and even feel as they make decisions. They will have virtually instant and
comprehensive information on demand via watches and/or smartphones tomake decisions. Customers will be able to cut through the noise-to-signalratios far more easily than a brand can. Imagine a world where the power ofknowledge has so severely shifted to consumers that they know maybe 400percent or 1000 percent more than a brand can ever know in a moment.
Cognizant’s research on signal-to-noise ratios, “The Value of Signal(and the Cost of Noise),” illustrates the economics of not getting listeningright. In 2016, global IP traffic was 1.1 zettabytes, and this will increasenearly threefold over the next five years. Cognizant’s survey says thatindividuals and groups can make meaning of this with what they term“Meaning Makers.” Meaning Makers are able to shift the economicperformance of organizations by 11.3 percent in revenue and a reduction of10.7 percent in costs. Over the next ten years, everything from recruitingbased on these new sensing skills to how you enable and empower teamswill need to shift to account for and take advantage of this phenomenon.Filtering may well become the number one technical skill while persuadingothers to listen and act becomes the number two. Together with a keen,almost infant-like curiosity to pursue knowledge, practical insights thatchange outcomes will largely drive successful individuals and teams tofollow the “right” signals and avoid the noise.
In the Future, Everyone Is Simply the BestIn a world dominated by micro markets and even momentary markets ofone, you cannot service every segment in every moment. Right now, we arein a mixed world of physical and digital. We might be taking a moreaggressive digital lens, but we still live and work in a mostly physicalworld. Ten to fifteen years from now, that is not likely to be the case. Howwe communicate, interact, exchange information, and collaborate willchange rapidly as the world moves to an all-digital future, enabling everyorganization to be equal to the best or quite possibly near perfect.
In this digital future, these changes are equally true across the boardfrom organization to employee, organization to customer, organization tosupplier, and all other engagements dominated by the digital-first lens.Pareto’s law argues that there are a vital few interactions that will matter(the 80:20 rule). These are the key engagements between your best
customers and the moments that open up new opportunities and markets.These instants become the vital component for indicating and drivingsuccess. While they may change from moment to moment, identification,recognition, and focus in how you market, sell, and manage is vital forsustained victory. Additionally, this keen understanding of the customer willrequire a new way for organizations to capture more than their fair share, asno one organization can win all the time due to pricing, disloyalty, and evensmall differences in systems, offerings, and logistics. Constantly askingquestions and improving on your organization’s “bests” becomes a vitalfilter for everyday interactions with HR, suppliers, customers, and everyonein between. To be the best an organization can be and improve with everyinteraction, leaders and teams need to pay vastly more attention to the best20 percent of your business (customers, suppliers, and employees). Youmight be able to sell, manage, and service all 100 percent with a digitalbackbone, but your growth and quality of relationships will be determinedby your success with the critical 20 percent first and foremost.
It is an interesting paradox of the digital world that just because you cansell, market, and engage almost at will does not mean that each moment orpoint of engagement is equally weighted in significance. Take for examplethe story of Tesco, the premier UK groceries brand for decades. Thecompany was selling 70 percent of the weekly groceries in the UK. Tescowas a brand so dominant it could rightly be called a monopoly. In fact, thisalmost insurmountable position was backed with leading loyalty programs,incredible advertising, and smart location models. Its success crossed bothconsumers and investors alike, and even tight shopping hours and misstepslike product shortages were tolerated and giggled about because they weresomewhat rare and well handled. Even as new brands like Asda, Aldi, andLidl started or rebirthed as food discounters in the UK, nobody expectedthem to break Tesco’s control, as loyalty data kept showing the sameglowing numbers, month in month out.
Two major factors, when combined, were toxic for the brand that wasstill hanging onto its loyalty data as the indicator of its success.
1. Shopping hours were vastly expanded in the Sunday Trading Act of1994. There was less pressure for the frantic weekend shopping startingfrom Thursday and ending in traffic chaos on a Saturday. In addition,
online advertising and coupons helped consumers see the value in otherofferings as they began to break shopping for the week into chunks.
2. And unlike stores in the French model (Carrefour for example), Tescowas not a superstore that could offer an exponentially higher range ofproducts than the others.
Price equilibriums, geographic choices, wider opening hours, and equalor better logistics from competitors meant that the loyalty card became lessand less representative of what was happening or could happen in achanging market. Tesco was looking in the wrong places for data and notfocusing on the new 20 percent of their business that mattered. Consumerstalked about and easily saw the difference in shopping basket costs betweenstores in both real life and the media. Additionally, in 2014, expanding eventhe Sunday shopping hours to twelve hours a day became the new normalfor major retailers. Tesco made plenty of other foolish moves, including aUS expansion and shifting to a Korean model, in part to try and rebalancethe precipitous changes in the UK results. The key failure was relying on anold source of information to try to describe an evolving 20 percent thatreally mattered to the brand’s success. This example clearly shows thatbeing constantly able to push through the information barrier in new wayswill be vital for success now and even more so in the all-digital future.
“There is a risk of information overload that we’re trying tomanage. There’s also an issue of making sure that as we framereporting and we think about metrics from a digital standpoint, thatwe educate folks about what we’re looking at.”—Chris Cox, head of Digital Experience Delivery, USAA
Marketing a Cyborg FunctionIn Terry Gilliam’s film Brazil (1985), the world is dominated byconsumerism and really bad delivery, customer service, and attitudes. EvenRobert De Niro’s portrayal of a revolutionary plumber shows the way thattechnology (and piping) is so complex as to be unfathomable. As we learnmore and get more data, marketing could become that complex as well. Infact, many brands are still adapting and evolving to the new customer-
centric world as they change the way they sell, market, communicate, andengage.
Ten years from now, we should and we will be vastly better, if notnearly proficient, across the board. Every marketer and communicator willhave the tools and ability to react and deliver more immediately, morepredictively, and more automatically. If marketing progresses to a point ofnear perfect and instant information, then it will likely be dominated byprogrammable responses to a world driven by consumer needs. Think aboutit this way, if 80 percent of the moments that matter could be planned withprogrammed responses and processed with intelligent systems, only askingfor human interaction when needed, would we need the vast swathe ofmarketers we have now for content, pricing, messaging, and otherinteractions? Once-novel concepts like interactive voice or chat functionsare now common components that speed up and automate a vast majority ofinteractions and needs. From a technology standpoint, not much more needsto happen to continue the automation across more marketing interactions.Once the logic is set, the machines and intelligence could do the rest. Froma career and organizational perspective, much of the digital revolution weare all undergoing offers career opportunities, but also career threats.
The Digital Helix and the success with this approach are dominated bythe ability to be flexible, collaborate, and use information in near real timeto make decisions. This view combined with being responsible to eachother and customer experiential portfolios pushes us all on this path. Even ifyou have not fully embraced the Digital Helix, odds are that yourorganization marketing and big-data efforts will push you in that direction.What does marketing in your organization look like in ten years with thisbackdrop?
While we are unlikely to see a Luddite reaction to the revolution in tenyears’ time, the skills and the actual functions of marketing could be vastlyreduced and/or significantly different in nature. For example, marketingmay be more about understanding reactions to vast arrays of ongoing testswith a focus on small elements and critical messaging and communicationsskills. This sets up a need for great communicators with incredible analyticchops or a unique combination of left and right brain skills. With theseabilities, marketers will utilize intelligent systems to handle design,delivery, and reactions that can account for and automate 80 percent or
more of customers’ moments or needs. Like self-driving cars, this feels likethe direction we are moving toward, and most believe it is rather inevitable.
We May End Up Job Sharing on EverythingThe volume of information, the levels of collaboration required for success,and the complexity of the digital world we live in demands a new way ofworking. The Digital Helix is the recommended approach because itconnects the key components together as an a priori process to be able tohandle this speed, complexity, and continual connected fiber of the digital-first organization. If automation of many of the actions and reactions isgoing to be common in the digital organization, then we need to think aboutthe nature of what employees do as well. As we have already seen, sharingroles are becoming more common and not just for fractional hours. It maysound crazy, but if the systems follow the Digital Helix, they will take morecare of themselves, making traditional human guidance less commonplace.This could create pathways to replace functional perspectives and roles withSWAT teams formed and focused on key issues of the moment. In someways, this world looks at people and marketing in a similar way to howAmazon looks at fulfillment, where automation is the rule, and people areadded to the mix when the systems need more of a human touch. Webelieve that this is certainly one plausible route for marketing over the nextten years. If this comes to pass, what are the implications for careerdevelopment, job skills, and the physicality of the workspaces?
To highlight these and other possible changes, we interviewed one ofthe leading futurists in this area, Michael Schrage, research fellow at theMIT Sloan School’s Initiative on the Digital Economy.
His views on the future of digital and the work worlds in which theyoperate provide a radical new lens for not only how to architect for nextyear but also for the next decade. Rather than chop up the interview intopieces, we thought it would be best for you to see the entire dialogue andcontext to formulate your own opinions.
Question: What can organizations do to be better prepared for thedigital future?
“Clearly, traditional planning models and paradigms don’t really work indigital. The ones that do work, embrace some aspect of predictive analytics—they’re empirically extrapolating from the statistical past into aprobabilistic future.
“If we look at Newell, Simon, and Chase’s work on chess with humanproblem solving from the 1970s, one of the key points is not that chessmasters have a superior memory of the pieces on the board, but that theyremembered important patterns. Chess masters couldn’t recall randomlyassorted positions any better than novices could. Grand masters wereexceptional at pattern recognition. Experts know there are two kinds ofpatterns to understand: One is the pattern that you see. These patterns are infront of you and on the board just like in the chess example. These are thepatterns that go into your repertoire of responses.
“The other patterns are those you anticipate. Back to the chess example,with these patterns you see the board and the other person’s move. Now youknow that if they make this move, it’s this pattern, or if they make thatmove, it’s that pattern. Recognizing where you are in the moment isdifferent than where you might be next. Experts grasp both.
“This kicks into the challenge of ‘combinatorial explosions,’ becausethere are a finite number of patterns people can meaningfully recognize,anticipate, and respond to. If something has happened, you’re responding toit. If you anticipate something, though, you will make certain adjustmentsin anticipation of what you expect.
“When we think ten to fifteen years out about the future of ‘patternrecognition,’ anticipation and response, we are moving into a cyborg era.The augmentation of people by technology, by choice, or by impositionseems inevitable. I’m not saying everyone will be ‘jacked into’ their mobiledevice, but I find it impossible to believe that serious business people won’tsomehow use some serious technologies to improve their pattern-recognition and decision-making capabilities. People will become‘cyborgs.’
“In this cyborg era, the capacity to manage decisions or design strategyand create plans will be changed forever. What isn’t digitally automatedwill be digitally augmented.
“The past really is prologue: I would argue comfortably that clothes,shoes, and protection were the beginning of augmented people. You are lessexposed or you have more flexibility since your feet and your body are
protected when you’re hunting. The invention of the eyeglasses in the1500s augmented vision. Attention deficit disorder drugs to give childrenbetter ability to concentrate longer are now taken by musicians to be lessnervous or more focused on their performances.
“These technologies enhance performance and maybe even change thestrategies we use to meet our goals. The role of technology as anaugmentation force, both cognitively as well as physically, is going to bethe transformation platform for individuals and organizations alike over thenext ten years. How people want to become more effective in theproductive domains they choose becomes the future narrative.
“It’s the top 2 percent in any field that seeks to be at the very, very topand at the same time be seen as someone who transforms their field or theirdiscipline. Think of the world in a new way with high value-adds or hightransformatives leading the way. Then, there are those that we can call thecompetitives, competing in the marketplace against low-cost labor that iscompetent. The burden is on the individual or organization to decide howthey use a digital-first set of ideas and technologies to augment theirabilities and move beyond being competent. Also, they will have to identifyand understand that some of these technologies are just the cost of entry aswe all digitally evolve. Simply put, just as you need a plane or drone tosuccessfully fly today, you will need digital capabilities to successfullythink and decide.
“This is the future, and everyone needs to understand that this is howdigital and technology will vastly change the landscape and the art of thepossible. This is how organizations need to prepare, as missing thesemanifestations or not anticipating the impact to you and your organizationcould relegate you to one of the competitives and not high value-adds orhigh transformatives.”
Question: In ten years, how do CEOs need to change or evolvetheir thinking?“I am one of those people who does not believe that one can consistentlynail market timing. How one does ‘risk management’ versus ‘opportunityassessment’ is critical.
“The types of questions the digital CEO should be asking have tochange. Time, in a digital world, becomes one of the greatest assets and
liabilities. For example, think of a pie chart with two main groupings. Thefirst, as every leader knows, is managing political risk, and there are threequestions around this issue: How do you quickly move to digital whilemanaging the political risk, regulatory risk, and legal risk worldwide?
“The second part of the pie chart would be identifying the value-creating community of best employees, customers, and clients. This smallgroup, the 80/20 or the Pareto part of the organization, generates the vastmajority of value for the organization.
“For most CEOs, the Paretos should consume between two-thirds tothree-quarters of their time. I’d guess the remaining quarter to a third wouldbe a mix of how the CEO believes he or she will improve the median or thePareto-supporting community.
“These are the things the CEO needs to scour and maintain in order tobetter support infrastructure for the political and the value-creating needs.In the 80/20 sense, it’s the 60 percent of politics and the 40 percent focus onvalue-creating community that matters. If the CEO has done a less-than-optimal job or less-than-superior job of defining those two communities, heor she will be gone within a very short time. But I freely confess my view isslightly cynical. I feel and fear that politics and the administrative state—not market innovation and individual choice—will cast the larger shadowover executive decision.”
It is now time to think about the next ten years in your life. Given thesepossible shifts and inevitabilities, what changes do you need to startthinking about and looking for to guide your future digital self?
T
CHAPTER 17
THE NEXT STEPS FOR YOU
“Never look down to test the ground before taking your next step; only hewho keeps his eye fixed on the far horizon will find the right road.”
—Dag Hammarskjöld
hroughout the book, we have referred to what winners and leaders aredoing to get their vital digital transformation efforts to work for them.
There is no specific secret vector or set of mapping coordinates to that endgame. In fact, there might be tens or even hundreds of pathways to reachthe ROI you seek. However, two vital components exist no matter whatpath you take—the drivers and the challenges. Understanding where yourdepartment and/or organization stands against each is vital because itenables you to focus on the nature of the debate and plans around digitaltransformation. Another critical component is absolute honesty. As anysuccessful organization knows, if you can be brutally honest with whereyou are and what you have, spending time, effort, and resources on yourdrivers and challenges sets the stage for the right decisions later on in theprocess.
“To be successful in any venture, there is a real need to ventureinto self-discovery. It’s really important that the process ofselfdiscovery include everyone across the whole organization. Self-discovery is a fundamental necessity to really be effective. Indeveloping a high-performance culture, you need to respect the
uniqueness and the special qualities that people bring in yourorganization. Self-discovery helps you uncover those qualities soyou can bring them to the surface and use them effectively. This isempowering to employees because it shows that you care enoughto dig in and to help find their uniqueness. You’re validating themand also celebrating these qualities. This style becomes a reallycrucial strength of the makeup of your organization. Plus, you candemonstrate that you really do care and that you are sincere abouttrying to find where people can be positioned and postured at theirvery best.”—Pete Carroll, head coach, Super Bowl Champion Seattle
Seahawks
In terms of the actions taken, it is easy to get paralyzed with thecomplexity of the tasks at hand. As a part of this, you cannot set highexpectations or hope that every one of the seven Digital Helix componentswill immediately deliver or produce results consistently. As we havediscussed at length, there are a few absolutes to keep in mind:
1. Deep and ongoing executive engagement is vital to ensure that both thecurrent and future plans are being guided from a holistic perspective.
2. Changing the way we architect, manage, and use information in fastertime frames is crucial.
3. Thinking about strategy in a different, post–Michael Porter Five Forcesworld is critical and can be the key to winning or losing.
The seven components of the Digital Helix are the foundation tosuccessful digital transformations, and they all have important roles to playin the rebuilding of your corporation with digital DNA at its center. But aswe have mentioned, success requires that each and every component worktogether in a highly interconnected way. To get these critical components insync, finding the first few simple stepping-stones is important. Our originalresearch with the Economist Intelligence Unit in 2012 showed some of theearly signals for both successes and failures. Organizations that neithercommitted fully nor prepared to handle the future of the digital-firstorganization often failed, and the setbacks impacted far more than just ROI.
These signals were further illustrated by the second and larger round ofresearch we conducted in 2013. When looking at more than a thousand casestudies, we could clearly recognize the early patterns for success. Manybrands and government entities recognized the value and economics ofdigital, but only a fraction fully understood the path and fortitude required.
Every leader we have interviewed, researched, or received data fromsays the energy for digital transformation is here inside every organization.The secret is to balance the importance of the seven components and to plotthe right course. You can plot for yourself all the possible areas where oneor more of the components work well together. These areas could include:executives as explorers, theme and stream listening, sales as connectedmoments, and marketing and communications as a flow. But remember,brutal honestly is required throughout the process. Giving the organizationcredit for something they don’t deserve or cannot achieve is pointless.
Real effort and coordination are required to bring the other componentsinto alignment using one step ahead and with everybody being responsiblefor each other. As we have seen in many instances, this leads to great initialmomentum for the organization, but a sudden change in market conditionsor competitive landscape stalls longer-term success and isolates digitaltransformation and the benefits to a few areas. Just one misaligned orinactive component can be the difference between digital success andfalling behind the competition.
As discussed, the right construction process is critical. Not only do youhave to ask yourself tough questions inside each of the seven barriers andSeven Challenges, but you will need to constantly question the performanceand dynamics inside each of the seven Digital Helix components.Selfawareness, or the lack thereof, is about 50 percent of the challengeorganizations face. None of this is easy. Trying to convert the organizationand their daily processes to the new world of the digital-first organization isincredibly tough. Fortunately, it can be done, and we are confident that thetools, frameworks, and insights in this book will give you the ability tosucceed. In fact, you probably bought the book because you are eithertrying to implement digital right now, or have had less than stellar results inthe past. Either way, you are now well armed to understand the mistakesmade or that could be made along the way and how to overcome the hurdlesyou may face. You are prepared, headed in the right direction, and ready for
the challenge. You are already way ahead of the competition because youread this book.
Now is the time to ask the question: What is your potential firsthundred-day plan for becoming a digital leader?
We wish you the best of luck!
AFTERWORD
As the IP for this area evolves, we will continue to publish addendums,examples, and tools for you to use in your own digital transformationjourneys. We have an app to use that will have the core frameworks,questions, and tools that the book is based on, giving you the ability to tapback into the ideas, best practices, and social feedback from otherpractitioners as you go.
The process of researching, learning, and writing this book was awonderful experience. Everybody we interviewed was especially forthrightand honest about their ideas, practices, and experiences and generouslyshared their insights and time. Tapping into the collective learnings andideas from these thirty or more digital leaders via extensive interviewstaught us far more than we could have hoped for and helped us sculpt andvalidate the ideas in the book. We were also fortunate to have the collectivesupport of our former colleagues at ICF, and we are grateful. ICF has beenan amazing place to see these ideas bloom and come to fruition.
ACKNOWLEDGMENTS
To the two most important people to us, Lara Gale and Wendi Aarons, wefeel a thank you is not enough. For each of us, you are the compasses thatwe navigate with and the very joy of each of our days. Your guidance,humor, and candor as we went through the whole process of the book ismore valuable than we could ever account for, and allowing us to invest thetime and energy in such a focused way is a gift we will be ever grateful for.This book is dedicated to you both. To Georgia, Aramis, and Tennyson,Jack, Sam, and Teddy, we look forward to many more days playing in thesun together.
NOTES
Introduction1. “The 2016 State of Digital Transformation,” Brian Solis et al.,
Altimeter@ Prophet, September 2016, http://www2.prophet.com/The-2016-State-of-DigitalTransformation.
Chapter 11. “The 2016 State of Digital Transformation,” Brian Solis et al.,
Altimeter@ Prophet, September 2016, http://www2.prophet.com/The-2016-State-of-DigitalTransformation.
2. Jim C. Collins, Good to Great: Why Some Companies Make theLeap… and Others Don’t (New York: William Collins, 2001), 10.
Chapter 21. Eric Hobsbawm, The Age of Revolution: 1789–1848 (New York:
Vintage; 1st Vintage Books, 1996), 52.2. “Digital Recruitment: A New Era of Job Seeking,” John Brasington,
Recruiting Blogs, August 31, 2014,http://www.recruitingblogs.com/profiles/blogs/digital-recruitment-a-new-era-of-job-seeking.
3. “51% of U.S. Adults Bank Online,” Susannah Fox,PewResearchCenter, August 7, 2013,http://www.pewinternet.org/2013/08/07/51-of-u-s-adults-bank-online/.
4. “Business Communications Never Sleep in 2015,” Evie Goldstein,RingCentral Blog, December 19, 2014,https://www.ringcentral.com/blog/2014/12/business-communications-never-sleep-2015/.
5. “Social Networks: Are They Eroding Our Social Lives?” Sam Laird,Mashable, April 25, 2012, http://mashable.com/2012/04/25/social-
networks-study/#NFhLmYEvT5kz.6. “70+ Digital Transformation Statistics,” SantokuPartners, December
11, 2013, http://www.slideshare.net/SantokuPartners/70-digital-transformation-statistics.
7. “Percentage of Disposable Income Spent Online in SelectedCountries,” Statista, February 2012,https://www.statista.com/statistics/227397/share-of-dispsable-income-spent-online-in-selected-countries/.
8. “The Salesman Who Doesn’t Sell,” Corey Dahl, LifeHealthPro,December 18, 2015, http://www.lifehealthpro.com/2015/12/18/the-salesman-who-doesnt-sell?page_all=1&slreturn=1477511943.
9. “Winning the Digital Game with a Human Touch,” Sanjay Dawar etal., Accenture, October 2016, https://www.accenture.com/in-en/insight-global-consumer-pulse-research-india.
10. “15 Social Media Statistics That Every Business Needs to Know,” ErinRichards-Kunkel, Business2Community, February 26, 2013,http://www.business2community.com/social-media/15-social-media-statistics-that-every-business-needs-to-know-0418173.
11. “Gartner Predicts That Refusing to Communicate by Social MediaWill Be as Harmful to Companies as Ignoring Phone Calls or Emails IsToday,” Gartner, August 1, 2012,http://www.gartner.com/newsroom/id/2101515.
12. “10 Customer Service Stats and What They Mean for Your ContactCenter,” Tim Pickard, Salesforce, January 14, 2015,https://www.salesforce.com/blog/2015/01/tencustomer-service-stats-what-they-mean-your-contact-center-gp.html.
13. “5 Tips for Providing Personalized Customer Service in the DigitalAge,” Melissa Thompson, CustomerThink, April 21, 2015,http://customerthink.com/5-tips-for-providing-personalized-customer-service-in-the-digital-age/.
14. “U.S. Smartphone Use in 2015,” Aaron Smith, PewResearchCenter,April 1, 2015, http://www.pewinternet.org/2015/04/01/us-smartphone-use-in-2015/.
15. “Cisco Visual Networking Index: Global Mobile Data Traffic ForecastUpdate, 2016–2021 White Paper,” Cisco, February 7, 2017,http://www.cisco.com/c/en/us/solutions/collateral/service-provider/visual-networking-index-vni/white_paper_c11520862.html.
16. “70+ Digital Transformation Statistics,” SantokuPartners, December11, 2013, http://www.slideshare.net/SantokuPartners/70-digital-transformation-statistics.
17. “10 Global Communication Trends in 2014,” Jeremy Galbraith, WPP,March 2014, http://www.wpp.com/wpp/marketing/publicrelations/10-global-communicationtrends-2014/.
18. “How Fitbit Is Cashing in on the High-Tech Fitness Trend,” JenniferWang, Entrepreneur, July 28, 2012,http://www.entrepreneur.com/article/223780.
19. “70+ Digital Transformation Statistics,” SantokuPartners, December11, 2013, http://www.slideshare.net/SantokuPartners/70-digital-transformation-statistics.
20. “Thanks Social Media—Our Average Attention Span Is Now ShorterThan Goldfish,” Michael Brenner, Marketing Insider Group, May 19,2014, http://www.b2bmarketinginsider.com/content-marketing/thanks-social-media-average-attention-span-now-shorter-goldfish.
21. “100 Amazing Google Search Statistics and Fun Facts,” Craig Smith,DMR, March 15, 2017, http://expandedramblings.com/index.php/by-the-numbers-a-gigantic-listof-google-stats-and-facts/2/.
22. “Google Search Statistics,” Internet Live Stats, accessed March 30,2017, http://www.internetlivestats.com/google-search-statistics/.
23. “160 Amazing YouTube Statistics,” Craig Smith, DMR, March 2017,http://expandedramblings.com/index.php/youtube-statistics/.
24. “15 Social Media Statistics That Every Business Needs to Know,” ErinRichards-Kunkel, Business2Community, February 26, 2013,http://www.business2community.com/social-media/15-social-media-statistics-that-every-business-needs-to-know-0418173.
25. “Cutting Down On Choice Is The Best Way To Make BetterDecisions,” Carolyn Cutrone, Business Insider, January 10, 2013,http://www.businessinsider.com/toomany-choices-are-bad-for-business-2012-12?op=1.
26. “The Myth of 5,000 Ads,” J. Walker Smith, Yankelovich, accessedMarch 30, 2017, http://cbi.hhcc.com/writing/the-myth-of-5000-ads/.
27. “What to Do When There Are Too Many Product Choices on the StoreShelves? Learn How to Navigate the Flood of Options—and SaveMoney,” Consumer Reports, January 2014,
http://www.consumerreports.org/cro/magazine/2014/03/too-many-product-choices-in-supermarkets/index.htm.
28. Peter Drucker, quoted in Philip Kotler, Standing Room Only:Strategies for Marketing the Performing Arts (Cambridge: HarvardBusiness Review Press, 1997), 33.
29. “Silicon Valley Self-Driving Car Startup’s Value Hits $1.55B,”Cromwell Schubarth, Silicon Valley Business Journal, November 7,2016, http://www.bizjournals.com/sanjose/news/2016/11/07/silicon-valley-self-driving-car-startups-value.html.
Chapter 31. John Maynard Keynes, The General Theory of Employment, Interest
and Money (London: Macmillan, 1936), 3.2. Peter Drucker, Innovation and Entrepreneurship (New York:
HarperBusiness; Reprint edition, 2006).3. “Digital Transformation, Part 6: Examples of Digital Transformation
Done Right,” Sven Denecken, ZDNet, October 24, 2014,http://www.zdnet.com/article/digitaltransformation-part-6-examples-of-digital-transformation-done-right/.
4. “75 Customer Service Facts, Quotes & Statistics,” Help Scout,accessed March 30, 2017, https://www.helpscout.net/75-customer-service-facts-quotes-statistics/.
5. “Why You Can’t Ignore Millennials,” Dan Schawbel, Forbes,September 4, 2013,http://www.forbes.com/sites/danschawbel/2013/09/04/why-you-cant-ignoremillennials/#7b2f4b2f6c65.
6. “The Deloitte Millennial Survey 2017,” Deloitte, accessed March 30,2017, https://www2.deloitte.com/global/en/pages/about-deloitte/articles/millennialsurvey.html.
7. “The Kauffman Index Startup Activity 2015,” Robert W. Fairlie et al.,Kauffman Foundation, June 2015,http://www.kauffman.org/~/media/kauffman_org/research%20reports%20and%20covers/2015/05/kauffman_index_startup_activity_national_trends_2015.pdf.
8. “Mobile Check Deposits Continue to Rise,” John Ginovsky, BankingExchange, September 3, 2015,http://www.bankingexchange.com/news-feed/item/5716-mobilecheck-deposits-continue-to-rise.
9. “10 Trends for 2015 Report,” Trendwatching, November 2014,http://trendwatching.com/trends/10-trends-for-2015/.
10. “The Future Has Arrived—It’s Just Not Evenly Distributed Yet,”Quote Investigator, accessed March 30, 2017,http://quoteinvestigator.com/2012/01/24/future-has-arrived/.
11. “Negative Reviews—A Golden Opportunity for Business,” BetterBusiness Bureau, September 15, 2014,https://www.bbb.org/phoenix/news-events/businesstips/2014/09/negative-reviews-a-golden-opportunity-for-business/.
12. “75 Customer Service Facts, Quotes & Statistics,” Help Scout,accessed March 30, 2017, https://www.helpscout.net/75-customer-service-facts-quotes-statistics/.
13. “75 Customer Service Facts, Quotes & Statistics,” Help Scout,accessed March 30, 2017, https://www.helpscout.net/75-customer-service-facts-quotes-statistics/.
14. “Online Product Research,” Jim Jansen, PewResearchCenter,September 29, 2010, http://www.pewinternet.org/2010/09/29/online-product-research/.
15. “11 of the 12 Best Global Brands Use Creative Crowdsourcing,”Yannig Roth, YannigRoth.com, March 23, 2012,https://yannigroth.com/2012/03/23/xx-of-the100-best-global-brands-use-creative-crowdsourcing/.
16. “Satya Nadella email to employees on first day as CEO,” SatyaNadella, Microsoft, February 4, 2014,https://news.microsoft.com/2014/02/04/satya-nadella-email-toemployees-on-first-day-as-ceo/#sm.000q7i3em6igf2811nz2buq1b8iq8#BCoFCqRPDeDQoqTd.97.
17. “How Adaptive Sourcing Helps CIOs Revolutionize Innovative ITSourcing,” Ben Kerschberg, Forbes, August 7, 2014,http://www.forbes.com/sites/benkerschberg/2014/08/07/how-adaptive-
sourcing-helps-cios-revolutionize-innovative-it-sourcing/#4efaf2c72e27.
18. “The Brilliant Invention That’s Setting an Indiegogo Record IsSomething You’d Never Expect,” NextShark, March 9, 2015,http://nextshark.com/the-brilliant-invention-thats-setting-a-5-million-indiegogo-record-is-something-youd-never-expect/.
19. “Industrialized Crowdsourcing,” Marcus Shingles and JonathanTrichel, Deloitte, February 21, 2014, https://dupress.deloitte.com/dup-us-en/focus/techtrends/2014/2014-tech-trends-crowdsourcing.html.
20. “Business Lessons from American Express CEO Ken Chenault,” ZachBulygo, KISSmetrics, May 24, 2013,https://blog.kissmetrics.com/lessons-from-ken-chenault/.
21. “How Much Money Does a New Startup Need,” Stuart Ellman,Business Insider, September 26, 2013,http://www.businessinsider.com/how-much-money-does-a-newstartup-need-2013-9.
22. GoFundMe, accessed March 30, 2017,http://www.crowdfunding.com/.
23. “Why Businesses Succeed and Fail,” Alyson Shontell, Entrepreneur,January 12, 2011, https://www.entrepreneur.com/article/217843.
24. “25+ Mind Blowing Stats About Business Today—Ctrl Alt Delete,”Mitch Joel, May 26, 2013, http://www.slideshare.net/mitchjoel/ctrl-alt-delete-slideshare-21954452.
25. “Kickstarter Statistics Dissected,” Maxim Wheatley, Alley Watch, July31, 2013, http://www.alleywatch.com/2013/07/kickstarter-statistics-dissected/.
26. “By the Numbers: What Are the Key Ingredients of Startup Success?”Murray Goldstein, Blue, accessed March 30, 2017,http://www.coxblue.com/numbers-key-ingredients-startup-success/.
27. “29 Quotes on the Future of Business,” Michael Brenner, DigitalistMagazine, August 30, 2013,http://www.digitalistmag.com/innovation/2013/08/30/29-quotes-on-the-future-of-business-0466930.
28. “Who Art Thou, Chief Digital Officer?” Bryan Kirschner,Entrepreneur, February 13, 2014,https://www.entrepreneur.com/article/231484.
29. Mitch Joel, Ctrl Alt Delete (New York: Grand Central Publishing,2013).
30. The quotation is attributed to Welch among public figures and inonline sources such as Goodreads.
31. “Keynote Feedback: Some Mind-Blowing Stats,” Jim Carroll,JimCarroll.com, September 2011,https://www.jimcarroll.com/2011/10/keynote-feedback-some-mind-blowing-stats/.
32. Ibid.33. “99 Amazing Facts on the Future of Business,” Forbes, October 8,
2013, http://www.forbes.com/sites/sap/2013/10/08/99-amazing-facts-on-the-future-ofbusiness/#41849e101c06.
34. “Why ‘Big Data’ Is a Big Deal,” Jonathan Shaw, Harvard Magazine,March 2014, http://harvardmagazine.com/2014/03/why-big-data-is-a-big-deal.
35. “3 out of 4 Brands Could Disappear and Most People Wouldn’t Care,”Susan Gunelius, Corporate Eye, June 19, 2013, http://www.corporate-eye.com/main/3-out-of-4-brands-could-disappear-and-most-people-wouldnt-care/.
36. “99 Fact on the Future Of Business,” SAP, October 3, 2013,http://www.slideshare.net/sap/99-facts-on-the-future-of-business.
37. Clayton Christensen, The Innovator’s Dilemma: When NewTechnologies Cause Great Firms to Fail (Cambridge, MA: HarvardBusiness Review Press; 1st edition, 1997).
38. “The Digital Advantage: How Digital Leaders Outperform Their Peersin Every Industry,” George Westerman et al., CapGemini,https://www.capgemini.com/resource-file-access/resource/pdf/The_Digital_Advantage_How_Digital_Leaders_Outperform_their_Peers_in_Every_Industry.pdf..
Chapter 41. Fritjof Capra, Tao of Physics: An Exploration of the Parallels Between
Modern Physics and Eastern Mysticism (Boulder, Colorado:Shambhala, fifth edition, 2010), 68.
2. “How to Beat the Transformation Odds,” David Jacquemont et al,McKinsey Consulting, April 2015,http://www.mckinsey.com/business-functions/organization/our-insights/how-to-beat-the-transformation-odds.
Chapter 51. “Digital Transformation and the Race Against Digital Darwinism,”
Brian Solis, BrianSolis.com, September 9, 2014,http://www.briansolis.com/2014/09/digital-transformation-race-digital-darwinism/.
2. “An Interview with Angela Ahrendts,” Didier Bonnet, CapGemini,2012, https://www.capgemini.com/resource-file-access/resource/pdf/DIGITAL_LEADERSHIP_An_interview_with_Angela_Ahrendts.pdf.
3. Ibid.4. “Discussions on Digital: How Large and Small Companies Build a
Digital Culture,” Brian Gregg, McKinsey, October 2016,http://www.mckinsey.com/business-functions/digital-mckinsey/our-insights/discussions-on-digital-how-large-and-smallcompanies-build-a-digital-culture.
5. “Customer Experience: At SanDisk It Is the Bottom Line,” MichaelConnor, Insanely Great, June 9, 2014,http://www.creatinginsanelygreat.com/sandisk-case-study-2/.
6. “Harnessing the ‘Bang’ Stories from the Frontline,” Deloitte, 2014,https://www2.deloitte.com/content/dam/Deloitte/au/Documents/Building%20Lucky%20Country/Deloitte_au_technology_digital_disruption_harnessing_the_bang_2014.pdf.
7. Ibid.8. “In Focus: Lou Gerstner,” CNN.com, World Business, Global Office,
July 2, 2004,http://edition.cnn.com/2004/BUSINESS/07/02/gerstner.interview/.
9. Charles G. Sieloff, “If Only HP Knew What HP Knows: the Roots ofKnowledge Management at Hewlett-Packard,” Journal of KnowledgeManagement 3, no. 1 (1999): 47–53,http://www.emeraldinsight.com/doi/abs/10.1108/13673279910259385.
10. “Why Strategy Execution Unravels and What to Do About It,” DonaldSull, Rebecca Homkes, and Charles Sull, Harvard Business Review,March 2015, https://hbr.org/2015/03/why-strategy-execution-unravelsand-what-to-do-about-it.
11. “Google Reveals Its 9 Principles of Innovation,” Kathy Chin Leong,FastCompany, November 20, 2013,https://www.fastcompany.com/3021956/how-to-be-a-success-at-everything/googles-nine-principles-of-innovation.
12. “5 Best Practices for Developing IoT Applications with RapidExperimentation,” Johan den Haan, The Internet Of Things, March 11,2017, http://www.theinternetofthings.eu/johan-den-haan-5-best-practices-developing-iot-applications-rapid-experimentation.
13. “Embracing Digital Technology,” Michael Fitzgerald, NinaKruschwitz, Didier Bonnet, and Michael Welch, MIT Sloan Review,October 07, 2013, http://sloanreview.mit.edu/projects/embracing-digital-technology/.
14. “Michael E. Porter on Why Companies Must Address Social Issues,”Dan Schawbel, Forbes.com, October 9, 2012,https://www.forbes.com/sites/danschawbel/2012/10/09/michael-e-porter-on-why-companies-must-address-social-issues/#831c4a4468ae.
Chapter 61. The quotation is attributed to Fuller among public figures and in online
sources such as Goodreads.
Chapter 71. PulsePoint Group and the Economist Intelligence Unit: Economics of
the Socially Engaged Enterprise 2012 and 2013.
Chapter 81. “5 Time-Tested Success Tips from Amazon Founder Jeff Bezos,” John
Greathouse, Forbes, April 30, 2013,
https://www.forbes.com/sites/johngreathouse/2013/04/30/5-time-tested-success-tips-from-amazon-founder-jeff-bezos/#5d0d08bd370c.
2. “Becoming a First-Class Noticer,” Max H. Bazerman, HarvardBusiness Review, August 16, 2014, https://hbr.org/2014/07/becoming-a-first-class-noticer.
3. Daniel Kahneman, Thinking, Fast and Slow (New York: Farrar, Strausand Giroux; 2011), 218.
4. China Miéville, Embassytown (New York: Del Rey Books, 2012), 345.5. “The New 21st Century Leaders,” Bill George, Harvard Business
Review, April 30, 2010, https://hbr.org/2010/04/the-new-21st-century-leaders-1.html.
Chapter 101. “How Yelp Can Help Your Small Business,” Cayan Insights, Cayan,
September 2, 2013, https://cayan.com/how-yelp-can-help-your-business.
2. Ibid.
Chapter 111. “Big Business Beyond the Beach Holiday,” BBC.com, July 22, 2016,
http://www.bbc.com/news/world-us-canada-36870975.
Chapter 131. “Embracing Agile,” Darrell K. Rigby, Jeff Sutherland, and Hirotaka
Takeuchi, Harvard Business Review, May 2016,https://hbr.org/2016/05/embracing-agile.
2. “Leadership Principles,” Amazon,https://www.amazon.jobs/en/principles.
3. “Our Leadership Principles,” Amazon,https://www.amazon.com/p/feature/p34qgjcv93n37yd.
4. “12 Business Lessons You Can Learn from Amazon Founder and CEOJeff Bezos,” Zach Bulygo, KISSmetrics, January 19, 2013,
https://blog.kissmetrics.com/lessons-from-jeff-bezos/.5. “Why Leadership Training Fails—and What to Do About It,” Michael
Beer, Magnus Finnström, and Derek Schrader, Harvard BusinessReview, October 2016, https://hbr.org/2016/10/why-leadership-training-fails-and-what-to-do-about-it. “The Performance Management Revolution,” Peter Cappelli and AnnaTavis, Harvard Business Review, October 2016,https://hbr.org/2016/10/the-performance-management-revolution. “AT&T’s Talent Overhaul,” John Donovan and Cathy Benko, HarvardBusiness Review, October 2016, https://hbr.org/2016/10/atts-talent-overhaul.
Chapter 141. “Why Strategy Execution Unravels and What to Do About It,” Donald
Sull, Rebecca Homkes, and Charles Sull, Harvard Business Review,March 2015, https://hbr.org/2015/03/why-strategy-execution-unravelsand-what-to-do-about-it.
2. Ibid.3. “Discussions on Digital: How Large and Small Companies Build a
Digital Culture,” Brian Gregg, McKinsey,http://www.mckinsey.com/business-functions/digital-mckinsey/our-insights/discussions-on-digital-how-large-and-small-companies-build-a-digital-culture.
4. “12 Business Lessons You Can Learn from Amazon Founder and CEOJeff Bezos,” Zach Bulygo, KISSmetrics, January 19, 2013,https://blog.kissmetrics.com/lessons-from-jeff-bezos/.
5. Ibid.
Chapter 151. “As Mark Zuckerberg Turns 30, His 10 Best Quotes as CEO,” Jason
Fell, Entrepreneur, May 14, 2014,https://www.entrepreneur.com/article/233890.
2. Mihaly Csikszentmihalyi, Flow: The Psychology of OptimalExperience (New York: Harper & Row, 1990).
3. Ibid.
Chapter 161. “Digital Inclusion and Government Services,” Becca Russell et al.,
Digital Inclusion Strategy, UK, November 21, 2014,https://digitalinclusion.blog.gov.uk/2014/11/21/digital-inclusion-and-government-services/.
INDEX
AAdidas, 36AfriGal Tech, 11–12The Age of Revolution (Hobsbawm), 18Agile development model, 173–74agility, 144, 183–85Ahrendts, Angela, 67–68“The AI Revolution” (Urban), xiAldi, 212“all for one and one for all” component, 109, 111, 171–82
aligning teams with digital goals, 172–73Amazon’s leadership principles, 175–78binding mechanism and enabling structure, 178essential nature of, 171–74hiring, coaching, and talent development, 180inspiring unity, 175makeshift workarounds, 173mindset and cultural development, 206relationship to other Digital Helix components, 144–45, 179, 181, 191support and trust, 174
Allstate, 160All the President’s Men (film), 85“all together and one step ahead”
component, 109, 112, 183–93advocacy and support system, 187agility, 183–85
balance between strategists and executors, 192combining strategies, 190elements of alternative strategydevelopment, 185–86extensive experimentation, 186infinite scalability, 189metrics, 189mindset and cultural development, 207no single perfect strategy, 184–85play-it-safe behavior, 183relationship to other Digital Helix
components, 145, 190–91Ally, 160, 162Altimeter, 56Amazon, ix, 35, 105, 138, 181, 215
Amazon Machine Learning, 11Amazon Web Services, 25, 36, 207“Dash” devices, 188leadership principles, 175–78“pioneer spirit,” 179Prime, 189shipping, 187–89
American Airlines, 45Andretti, Mario, 113Android, 84, 144Appirio/Topcoder, 40Apple, 23, 35, 43, 67, 80, 144, 180, 207Asda, 212Audi, 188augmented people, 217“authentic experience,” 157Azure cloud, x
BBackman, Paul, 37“backward compatibility” thinking, 91Bailey, Christopher, 68banking, 22, 37, 160Barbin, Chris, 39Barr, Jud, 19, 186Bazerman, Max H., 115, 210Best Buy, 72–73Bezos, Jeff, 42, 113, 178–79, 188Bing, 129Blockbuster, 81Blogger, 83Bray, David, 107, 133Brazil (film), 214Burberry, 67–68Business Insider, 41
C
Cap Gemini, 46Capitalism, Socialism and Democracy (Schumpeter), xiiCapra, Fritjof, 51–52Carrefour, 213Carroll, Pete, 5, 56–57, 196–97, 208, 220Cars.com, 138“Challenger” sales model, 170The Challenger Sale: Taking Control of the Customer Conversation (Dixon and Adamson), 170Chambers, John, xchange. See also digital transformation
adjusting and adapting to, 21, 125–26for CEOs in next ten years, 218exponential rate of, 42–45scale of digital change, 22–24small changes and long-term results, 92, 96–98Trend Spotting and Tracking Template, 44–45
Charif, Mona, 19–20Chase, William G., 216Chatman, Reginald, 74–75Chenault, Ken, 40chess masters, 214–15Christensen, Clayton, 45Churchill, Winston, 183Cisco, xCiti, 142–43Cognizant, 211Colella, Vanessa, 120, 134, 142–43, 153Colgate, 25–26Collins, Jim, 15–16Cook, James, 121Cox, Chris, 10, 93, 126–27, 131, 151, 156, 160–61, 213Crawford, Colin, 180, 191–92creative destruction, xiiCreators, 60–61Crest, 25–26Crick, Francis, xii, 105CRM (customer relationship management), 68–69crowdfunding, 41crowdsourcing, 38, 40, 46Csikszentmihalyi, Mihaly, 205, 207cultural development. See mindset and cultural developmentcustomer abandonment, 35, 55, 73, 162customer service feedback, 35, 38, 142
“customers’ experiential portfolios” component, 109–11, 137–47Catherine wheel diagram, 140–41identifying and handling experiences within, 139–40interconnectivity of experiences, 138–39leveraging, 138–39measuring value or effect of, 145–46mindset and cultural development, 205relationship to other Digital Helix components, 140–45, 191
customization, 18–19, 24–26, 36CVS, 129cyborg era, 216–17
DDarwin, Charles, 21Deloitte, 56De Niro, Robert, 214DHL, 188“The Digital Advantage: How Digital Leaders Outperform Their Peers in Every Industry” (Cap
Gemini/MIT), 46digital-first perspective, xii, 22, 34, 87, 105, 111Digital Helix framework, xii, 1, 3, 16, 108, 220–21
“all for one and one for all” component, 109, 111, 171–82“all together and one step ahead” component, 109, 112, 183–93“customers’ experiential portfolios” component, 109–11, 137–47“executives as explorers” component, 108–10, 113–24future of digital transformation, 214–15“marketing and communications as flow” component, 109, 111, 149–57overview of, 3“sales as connected moments”component, 109, 111, 159–70“themes and streams” component, 109–10, 125–36
“Digital Inclusion Strategy” policy paper (UK), 209–10digital revolution, xi, 11–12
mass customization, 18–19scale and rate of change, 22–24“seven pressures” (Drucker), 32–33
digital transformation, 1–2absolutes, 220adjusting and adapting to change, 21affinity with, 91attempts that miss the mark, 9–10, 12, 19–21changes wrought by, 11–12
concerns of CEOs regarding, xicreative destruction, xiidigital wrapping trap, 14–15enabling customer success, 24–26exponential change, x–xiframing debate regarding, 89–90future of, 209–18gravitation toward new concepts, 91–96“greater than the sum of their parts” viewpoint, 13–16investing in isolation, 13–14key conceptual shifts, 93–96leadership and, ix–xlearning from failures, 58–59, 84–85mass customization, 18–19momentum led by successes, 92, 101–2myths and realities of, 46–47 need for framework and strategy, 13–14, 16, 20–21resistance to, 10small changes, 92, 96–98technological change versus, viii, 26time investment in, 89–90, 98–101transition between third and fourth industrial revolutions, xivital components of, 219
Digital Transformation Reality Check, 47The Double Helix (Watson), xiiDreamers, 60–61Drucker, Peter, 25, 32–33, 161
EeBay, 35–36Ecolab, 14e-commerce, 22–23Economist Intelligence Unit, 12, 52, 221Edison, Thomas. A., 5880:20 rule (Pareto’s law), 212–13, 218Einstein, Albert, 89Eloqua, 81, 85Embassytown (Miéville), 117“Embracing Agile, How to Master the Process That Is Transforming Management” (Rigby,
Sutherland, and Takeuchi), 173–74Escape Velocity (Moore), 31“everyone together all the time” component. See “all for one and one for all” component“executives as explorers” component, 108–10, 113–24
accepting risk in information and enablement, 121–22actions versus mandates, 122enabling, embracing, then mandating, 118–19expansion of information, 114–15experimentation, 120–22focus on information driving transformation, 114–16letting go and seeking, 120mindset and cultural development, 204motivated blindness, 115questionnaire/audit regarding, 122–23realigning and rehiring, 119relationship to other Digital Helix components, 156, 181, 190–91valuing journey and path, 117–18What You See Is All There Is, 115–16
experiential portfolios. See “customers’ experiential portfolios” component
FFacebook, 105failure
failing well, 83learning from, 28, 58–59, 84–85, 186–87, 204propensity for handling, 199taking risk and failure hand in hand, 203
Faley, Kelly, 145fashion industry, 18–19FedEx, 188filtering. See signal-to-noise ratios and filteringFlip, xflow. See “marketing and communications as flow” componentFlow Hive, 40Flow: The Psychology of Optimal Experience (Csikszentmihalyi), 205, 207Forbes Insights, xiForbes Media, ixFord, Henry, 51Fuller, Buckminster, 89–90
GGartner, 39Gen X, 162Gen Y, 42
Gerstner, Lou, 78Gervais, Michael, 85–86, 98, 119, 190, 197–203, 207Gibson, William, 38Gilliam, Terry, 214Gladwell, Malcolm, 171Glassdoor, 37GM, ix, 181Gmail, 84Godbout, Greg, 92GoFundMe, 41Goldcorp, 40Good to Great: Why Some Companies Make the Leap…and Others Don’t (Collins), 15–16Google, 23, 80, 82–84, 105, 144, 163, 186–87“greater than the sum of their parts” viewpoint, 13–16, 76, 114, 122, 135green revolution, 14“green-washing,” 14Groupon, 80
HHallmark, 131–32, 135–36Hammarskjöld, Dag, 219Harvard Business Review (HBR), 173–74Harvard University, 42healthcare.gov, 70–71Hendrix, Jimi, 137Hobsbawm, Eric, 17–18Holacracy, 41Holgate, Rick, 174–75Homkes, Rebecca, 80, 184HP, 79Huxley, Aldous, 209
IIBM, 132, 160, 167Impossible Foods, 185Incrementalists, 60–61Industrial Revolution, 9–10, 17–18, 21infographics, 163Innovation and Entrepreneurship (Drucker), 32The Innovator’s Dilemma (Christensen), 45
The Innovator’s Hypothesis (Schrage), 2An Inquiry into the Nature and Causes of the Wealth of Nations (Smith), 11, 197Instagram, 23insurance, 23, 36, 70–71Interbrand, 38, 146Internet of Things (IoT), 18, 74“in the moment and one step ahead always” component. See “all together and one step ahead”
componentIwata, Jon, 4, 21, 132, 167, 173–74
JJacquemont, David, 58job applications, 22Jobs, Steve, 144JTB Consulting, 19
KKahnemen, Daniel, 115–16Kardgaard, Rich, xi–xiiKauffman Firm Survey, 37Kentley-Klay, Tim, 27Kettering, Charles F., 207Keynes, John Maynard, 32Kickstarter, 41–42Kierkegaard, Søren, 159Kodak, 81Kostin, Gwynne, 91Kurzweil, Ray, xi
LLamoureux, Kristin, 157Lao Tzu, 149Lasik, 163Lee, David, 72–73, 185Levitt, Theodore, 161Lexus, 146Li, Charlene, 12, 132, 164Lidl, 212listening activities. See “themes and streams” component
Los Alamos National Laboratory, 84loyalty cards and programs, 130, 212–13Lyft, 27
MMachiavelli, Niccolò, 17Macpherson, Lisa, 96, 131–32, 135–36Mangia, Karen, 131Maor, Dana, 58“marketing and communications as flow” component, 109, 111, 149–57
addition of technology, 151–52customer preference, 154–55information as way to adjust dynamically, 153–54marketing as immediate and bidirectional channel, 154mindset and cultural development, 205–6relationship to other Digital Helix components, 143–44, 156, 191tests and experiments, 155–56
Marketo, 85, 151McKinsey, 56, 65–66, 185“Meaning Makers,” 211metrics, 95
absence of reliable, 71“all together and one step ahead” component, 189concept shift to insights that drive decisions that matter, 95culture and, 196“customers’ experiential portfolios” component, 145–46Seven Challenges to Digital Transformation, 55, 72–75
microfinancing, 40Microsoft, x, 129Miéville, China, 117millennials, 37, 157mindset and cultural development, 195–208
“all for one and one for all” component and, 206“all together and one step ahead” component and, 207building high-performance culture, 197command of self, 198curiosity toward mastery, 198“customers’ experiential portfolios” component and, 205empowering individuals into optimal mindset, 196–97“executives as explorers” component and, 204fatigue, 202–3filtering, 203
learning to take risks, 199“marketing and communications as flow” component and, 205–6pressures than hinder performance, 201propensity for handling failure, 199questionnaire/audit regarding, 203–4“sales as connected moments” component and, 206taking risk and failure hand in hand, 203“themes and streams” component and, 205time as precious resource, 199–200trainable mental skills, 200–202
MIT, 46, 189mobile technology, 22–23, 37, 43, 77, 86, 129Moore, Geoffrey, 31motivated blindness, 115
NNadella, Satya, x, 38–39Netflix, 25, 129Newell, Alien, 216New York Police Department, 129Nike, 19, 3699Designs, 40Nokia, 80Nordstrom, 36
OObservers, 60–61Office365, xOgilvy, David, 96Omniture, 11O’Reilly, Tim, 172Orwell, George, 209outsourcing, 55, 78–79
PP&G, 84Pareto’s law (80:20 rule), 212–13, 218pattern recognition, 216Patton, George S., Jr., 173–74
Peppers, Don, 160pin theory, 14Platt, Lew, 79Polman, Paul, 124Porter, Michael, 87The Power of Noticing (Bazerman), 115, 210The Prince (Machiavelli), 17programmed marketing responses, 214–15PulsePoint Group, 52, 59, 90
QQdoba Mexican Grill, 129–30Quicken, 36Quiznos, 80
RRadian6, 122recommendations, reviews, and ratings, 23, 38, 138Reich, Angelika, 58retrofitting, 105–6, 152Rogers, Bruce, 65, 76, 108Rogers, Martha, 160Rolex, 43Rutherford, Linda, 46
S“sales as connected moments” component, 109, 111, 159–70
aligning culture, 169–70building right systems, 169content slices, 162customer control, 162delivering for exact moments, 165–66identifying moments, 167–69mindset and cultural development, 206nonlinear model, 163old versus new sales model, 164–65questionnaire/audit regarding, 166–67relationship to other Digital Helix components, 143, 191successful relationships, 159–61
Salesforce, 11, 25, 68, 85, 122, 151, 164, 166Samsung, 144Samuelson, Paul, 34SanDisk, 74–75Satoro, Ryunosuke, 60Schenkel, Gerd, 77–78Schmidt, Eric, 84Schrage, Michael, 2, 5, 11, 14–15, 24–25, 105–6, 118, 138, 172, 187, 189–90, 196, 215–18Schumpeter, Joseph, xiiSchwartz, Mark, 14, 133Scott, Larry, 119, 139segmentation model, 59–61Seven Challenges to Digital Transformation, 51–61, 63–87
architecture and collaboration, 54, 75–78audit regarding, 53, 64avoiding, 60common theme among, 86–87core competency within, 55, 78–79erroneous assumptions, 97–98executive engagement, 52, 65–68expectations chasm, 54, 69–72learning from failures, 58–59leveraging digital across business, 56, 84–86metrics, 55, 72–75openness to alternative strategies, 55–56, 79–84segmentation model, 59–61universal clarity regarding, 56–57
Seven Drivers of Digital Opportunity, 31, 33–34access to more information, 37–39compression of supply and demand, 34–36exponential rate of change, 42–45new digital competitors, 40–42organizational audit regarding, 49–50pay-as-you-go, 39–40price, efficiency, and innovation tradeoffs, 45–46questionnaire/audit regarding, 47–48shifting demographics, 36–37
“seven pressures” (Drucker), 32–33SharePoint, 151sickle cell anemia, 11signal-to-noise ratios and filtering, 121, 129–30, 136, 191, 203, 207, 210–11silo orientation, 67, 172, 197Silver, Nate, 125
Simon, Herbert A., 216Smith, Adam, 11, 14, 34, 197Snowden, Edward, 37Social Media Accelerator, 12–13, 59social media and technology, 12–13, 22–23, 54–56, 59–60, 93, 106, 164–65Solis, Brian, 63Southwest Airlines, 45Starbucks, 86, 130startups, 41–42, 175, 199steamships, 21, 26, 105, 152Steinert, John, 150Stop/Start/Do Differently method, 92, 99–101StubHub, 35Subway, 80Sull, Charles, 80, 184Sull, Donald, 80, 184
TTag Heuer, 43Tao of Physics: An Exploration of the Parallels Between Modern Physics and Eastern Mysticism
(Capra), 52Telstra, 77–78Tesco, 212–13Tesla, ix, 25, 40, 181“themes and streams” component, 109–10, 125–36
adjusting and adapting to change, 125–26bias toward the familiar, 126defined, 127discerning signal from noise, 129filtering, 130, 134illusion of control, 134listening, 127, 130–31living microscope, 128–30mindset and cultural development, 205“next best offers,” 129questionnaire/audit regarding, 131–33relationship to other Digital Helix components, 156, 179, 191variables driving success, 130
Thinking, Fast and Slow (Kahnemen), 115Thrivers, 13, 60–61, 190Tisch Center for Hospitality and Tourism, 157Toynbee, Arnold, 9
Toyota, 146Trailblazers, 59, 61Trend Spotting and Tracking Template, 44–45Twain, Mark, 59–61Twitter, 23
UUber, ix, 25–27, 135, 207UPS, 188Urban, Tim, xi
V“The Value of Signal (and the Cost of Noise)” (Cognizant), 211
WWalmart, ix, 181Watson, James D., xii, 105wearable devices, 23, 43Web 1.0, viii, 18, 39, 69Web 2.0, viii, 18, 93WebEx, 151Welch, Jack, ix–x, 42, 195What You See Is All There Is (WYSIATI), 116Whole Foods, 14WikiLeaks, 37Winton, Jeff, 151
YYelp, 138YouTube, 23, 81
ZZappos, 41, 160, 186Zoox, 27Zuckerberg, Mark, 197
ABOUT THE AUTHORS
MICHAEL GALE founded Strategic Oxygen in 2001, which was widely seenas one of the technology industry’s primary data toolsets for marketers,used by over 20 brands and used to model over $4 billion in marketing andsales investments. The company was sold to Monitor Group, where he wasa group partner from 2006 to 2010. In 2011, he became a partner atPulsepoint Group, a digital consulting company, which was acquired byICF in 2015. Michael has also served as chief web officer and GM atMicron Technology and was the vice president of Worldwide brandresearch at IntelliQuest.
CHRIS AARONS has helped launch dozens of companies and products usinga unique mix of digital, sales, and marketing strategies. At PulsepointGroup, Chris helped leading organizations become digital in both theirpractice and delivery. In 2006, he launched one of the first social mediadepartments at AMD and later wrote the book Social Media Judo: TheEssential Guide to Mastering Social Media and Delivering Real Results.Chris also teaches digital marketing at the University of Texas at Austin andhas won numerous awards for his digital programs while working forclients such as Adobe, Amazon, AMD, Cisco, Dell, HP, LG, Microsoft,Philips, and others.
- Cover Page
- Title
- Copyright
- Dedication
- Contents
- Preface
- Foreword
- Introduction: Digital Transformation and the Digital Helix: A Primer
- PART 1: THE NEW DIGITAL WORLD WE LIVE IN
- Chapter 1: To Thrive with Digital, You Have to Understand the Past
- Chapter 2: Tradition Is the Illusion of Permanence
- PART 2: HOW DIGITAL THINKING CHANGES YOUR ACTIONS AND RESULTS
- Chapter 3: Seven Drivers that Will Help You Escape the Old World
- Chapter 4: The Tao of Getting Digital Done Right
- Chapter 5: Diving Deep into the Seven Challenges to Digital Transformation
- Chapter 6: Small Steps Equal Giant Leaps
- PART 3: THE DIGITAL FRAMEWORK FOR SUCCESS
- Chapter 7: The Digital Helix: an Introduction
- Chapter 8: Executives as Digital Helix Explorers
- Chapter 9: Themes and Streams for Insights in the Digital Helix
- Chapter 10: Customers Have Experiential Portfolios
- Chapter 11: Marketing and Communications as a Flow
- Chapter 12: Sales Are Connected Moments
- Chapter 13: Everyone Together, All the Time
- Chapter 14: In the Moment and One Step Ahead Always
- Chapter 15: Building Optimal Mindset and Culture
- Chapter 16: Over The Horizon to a Brave New World, for Some of Us
- Chapter 17: The Next Steps for You
- Afterword
- Acknowledgments
- Notes
- Index
- About the Authors
