The Digital Helix

How to Transform Every Aspect of Your Organization to Win Now and in the Future

Michael Gale

• Publisher: Greenleaf Book Group Press
• Year: 2017
• Print ISBN: 9781626344648
• eBook ISBN: 9781626344655
• Topic: Business
• Subtopic: Business Strategy
• Index: Business

Wall Street Journal Bestseller Thrive in the Digital Age
Digital transformations are everywhere: business to business, business to consumer, and even government to citizens. Digital transformation promises a bridge to a digital future, where organizations can thrive with more fluid business models and processes. Less than 20% of organizations are getting digital transformations right, but these digitally transformed organizations can deliver twice as fast as other organizations, cut OPEX by over 30%, and have seen a near-immediate doubling in brand value. The power to act faster and do it better than before sits at the heart of truly digitally transformed organizations. In The Digital Helix, authors Michael Gale and Chris Aarons explain the specifics of digitally transforming your organization— from the role of the digital-explorer leader in using information to empower the organization to move better and faster to shifts in sales, marketing, communications and leadership, product development, and service and support. The Digital Helix is a practical guide to bringing all the key functions together and includes guidance on developing a digital culture from the ground up—making it part of your company's DNA—and the mindset tools needed to bring your organization into the digital-first age. Creating this digital-first DNA for your organization will allow you to not only embrace the digital age but thrive in it.

PART 1

THE NEW DIGITAL WORLD WE LIVE IN

CHAPTER 1

TO THRIVE WITH DIGITAL, YOU HAVE TO UNDERSTAND THE PAST AND LOOK TO THE FUTURE

“It is a paradoxical but profoundly true and important principle of life that the 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

Though Toynbee had this revelation well over a century ago, this same sentiment could apply to how most executives view the opportunities in the age of digital transformation that we live in now. The nature of digital transformation is pervasive, with more than eight in ten executives focusing their organizations toward its promise.¹ Yet far fewer of them are able to define what the term “digital transformation” means. Maybe the same was true during the Industrial Revolution when humans tried to define what they were experiencing.

In reality, revolutions are often poorly understood until they touch many people or some defining model explains the what, the why, and most importantly, the how. There is significant evidence that many leaders are now trying to ramp up digital transformations in their organizations. In fact, the term “digital transformation” is now a common banner that organizational leaders stand beneath when trying to rally the troops or investors. Many times, their approach is little more than project-focused attempts at digital marketing, using technology to improve business outcomes, or changing an isolated ecosystem in an organization. You may be experiencing similar efforts in your own organization, with digital being touted to improve sales, marketing, customer retention, internal communications, real-time feedback, and more. These attempts are usually not true digital transformations. They are at best business improvements that fall far short of using digital to transform how your organization functions and of delivering future value to your customers.

“We’re trying to be both digital on the outside as well as digital on the inside and focus our investments on what the member will experience. We’re being very intentional about how we make the right investments to digitize our business, to drive a digital transformation that manages the benefit to both our members and our internal teams that support them. Our ability to deliver exceptional, differentiated, highly personalized experiences to our members will be as much about how digital we are on the back end as 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 of organizations that are blazing ahead without a clear road map for success are experiencing suboptimal results from their investments as they go through their own digital transformation journeys. In fact, the basic challenges and the underlying assumptions about our businesses in this digital-first era are fundamentally changing. These changes are as profound as the Industrial Revolution that changed the world some 270 years ago. Like then, there will be a few Luddites who resist the shift. Those who choose not to move forward will ultimately fall by the wayside.

“In my professional experience, the most useful way of thinking about digital transformation is that the economics of digital technologies and platforms become the organizing principle around which business model and business process as well as value creation decisions get made.”

—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 of The Innovator’s Hypothesis

The speed of change, the volume of insights, and the capacity to disrupt market and organization economic models in a few moments are more extreme than at any time before. If Adam Smith, the father of economics and author of An Inquiry into the Nature and Causes of the Wealth of Nations, 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 also by digital innovations that are transforming the way we listen, design, deliver, and interact with each other and our customers. Amazon Machine Learning, Omniture, and Salesforce are all living examples of digital transformation systems today.

If you think digital doesn’t have the potential to change business, you have not been looking around. There are examples, both large and small, from all over the planet where digital revolutions are changing markets and opportunities. One of the best examples is a program in Uganda called AfriGal Tech, which is run by four young women who are trying to improve the process of diagnosing sickle cell anemia, an ailment that kills 80 percent of those afflicted with the disease before they reach the age of five. In most parts of the world, this disease is manageable, but in Uganda, too few hospitals (only three hundred for 37.8 million people within seventy-seven million square miles) and the prohibitive cost of testing make it deadly. By using cell phones with small and inexpensive cameras to diagnose the disease at the touch of a button, these young women have found an easy and cost-effective solution.

This example shows the power of the digital transformation we are living 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 from competitors. If four young women in Uganda can solve a deadly problem by using inexpensive digital technology, then digital transformation being done by small and large businesses across the globe surely can drastically change every facet of marketing, communications, sales, product development, and customer service in more ways than we can imagine.

Almost all the evidence and research we have seen and done ourselves shows how digital transformation too often focuses on only a few initiatives and lacks ambition to go beyond the mere goal of doing something digital. In fact, most organizations miss the mark of becoming truly digital in nature and thus fail to deliver the benefits promised. Yes, organizations need to start somewhere. But digital, if done correctly and in a prevalent way, can not only deliver the benefits expected but also exponentially change the “art of the possible” for businesses and consumers. Now is the time to grab on to the right digital opportunities or risk playing catch-up with the new digital leaders later.

What can organizations do to be digital and gain real competitive advantages? To thrive now and in the future, everyone in the organization has to realize that bringing about a digital revolution in your world requires much more than only taking small steps. Organizations need to focus on a set of principles and practices that underlie the nature of that change.

We saw a similar phenomenon when we first researched how to win with social technology and created the Social Media Accelerator with the Economist Intelligence Unit in 2012 to pinpoint the best practices of leaders. Digging in deeper and looking through 170-plus variables and more than a thousand case studies in our social research showed some distinctive patterns. These patterns clarified how some succeeded while others did not.

“Social is a catalyst for digital transformation in that the rest of the world is becoming increasingly social, and because of those social interactions, is putting demands on companies to go through a digital transformation.”

—Charlene Li, principal analyst, Altimeter, a Prophet company

The Social Media Accelerator research showed that more than 85 percent of Fortune-level executives believe in the potential power of social engagement. But as with digital transformation, barely 14 percent (whom we termed “Thrivers”) were garnering any form of real economic returns. This lack of result includes not seeing gains in key variables, such as managing and recruiting human capital, sales, margins, new product development, and even much softer variables such as brand equity. After another wave of social research in 2013 with three times as many respondents, we saw the Thrivers category marginally grow from 14 percent to 16 percent.

All our research projects have shown that the Thrivers were achieving transformative success because they understood the nature of digital and found a way to architect for success. Interestingly enough, these organizations were relatively evenly spread across all segments and sectors, including both regulated and nonregulated industries, as well as manufacturing, retail, health care, and both B2C and B2B. This clearly shows us that success is not driven by industry, but by you and your organization.

To that end, this book isn’t a rallying cry for digital transformation. Most organizations understand why they need to be digital or move beyond one or two isolated digital transformation projects to become a fully digitally transformed business. Rather, the data and extensive work in the field show that most organizations simply need frameworks to guide them toward winning with digital now. Thus, we have chosen to focus on this deeper approach, and we view this book as the keystone of an integrated support system that will show you not only why but also how to leverage the delivery of digital transformation to achieve greater results for your organization.

To succeed, leaders need to make sure all their digital investments work together and deliver value that is measurable and greater than the sum of their parts. This phrase, “greater than the sum of their parts,” is one we will use often, as it describes the true exponential value you should seek from your digital transformation efforts. Not viewing your efforts this way usually leads to the worst failure in digital transformation, investing in isolation (for example, adding Salesforce or similar digital solutions, but not changing other dependent areas in the organization that could and should be connected to that investment). Investing in isolation defocuses the organization and usually leads to chasing what is next rather than elevating the organization to the task of using digital to solve customer problems and act competitively.

Connecting these investments is vital and cannot be understated. Adam Smith’s pin theory, the division of labor, showed that the focused division of connected labor in one system was far more powerful than the same sum of individual craftsmen working in one place, each trying to make the same product. As in the Industrial Age, the Age of Digital Transformation needs a framework for defining and driving success through key functions and roles inside the corporation. Organizations need to understand how people and teams working together in an interdependent way with the tools and information needed is the only way to win as you go through the journey to full digital transformation.

“Digital transformation requires that we change the way technology organizations connect with the rest of the enterprise. We can no longer think of the technology organization as if it were an arms-length contractor, separate from something called ‘the business.’ On the contrary, we have to imagine IT and the rest of the 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 Wrapping

Digital today is much like the green revolutions of the past decade. Many companies jumped on the bandwagon to make products, services, and businesses that were environmentally friendly, or “green.” In truth, most of the initial work by brands in this area was cynically seen as “greenwashing” (when a company or organization spends more time and money claiming to be “green” through advertising and marketing than implementing business practices that minimize environmental impact). Brands such as Ecolab, Whole Foods, and others that are truly green from the ground up paved the way for a genuine recognition across industries of the attainable premium to be found and the need for companies to deliver portfolios of new products and services as consumers became more environmentally conscious. We are seeing the same phenomenon with digital transformation today.

“This is a vulgar example of digital done wrong when an organization gives their sales team an iPad to interact with customers. This kind of thinking completely misses the point. All these types of things that add digital flavor, digital spice, or a digital emphasis, without organizing, cohering, uniting, or building congruent digitally oriented strategy are bound to fail.”

—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 of The Innovator’s Hypothesis

Thriving Requires Digital Transformation to Deliver Value Far Greater Than the Sum of Its Parts

Digital should allow all of us to have a far more fluid and real-time approach to market opportunities, as well as to human capital, innovation, marketing, communication, and selling. The fluidity of digital should even extend to new product development and governmental services. The key is effectively tying these areas together and at the same time delivering a more ambitious view of the world. We cannot use a checkbook to buy our way successfully through the digital landscape. Successful organizations understand the need to continuously architect for digital in new, innovative ways.

This new structure also requires a different way of thinking about how we apply our resources. Great companies, like great nations, understand that transformation needs not only change their resource allocation but should also impact architecture, attitudes, mindsets, and the habits of the people and the organization. These aspects are often the most challenging to change because individual and group dynamics slow or impede the progress. As Jim Collins, author of Good to Great: Why Some Companies Make the Leap . . . and Others Don’t, states, “Greatness is not a function of circumstance. Greatness, it turns out, is largely a matter of conscious choice and 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 putting it all together and getting it right. Although we do not pretend this book is the pin theory for the Digital Age, the interviews, research, frameworks, and other tools provided will enable you to be far more like the 16 percent of Thrivers who are on the right path toward digital transformation than the majority who are struggling.

Each section of the book will give you the information needed to promote the right thinking internally. The chapters will also provide you with the frameworks needed to identify how to do digital...

Table of contents

• 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