The Digital Helix: Transforming Your Organization's DNA to Thrive in the Digital Age

By Michael Gale and Chris Aarons

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.

• Language: English
• Publisher: Greenleaf Book Group
• Release date: Oct 3, 2017
• ISBN: 9781626344655

Book preview

Forbes

INTRODUCTION

DIGITAL TRANSFORMATION AND THE DIGITAL HELIX: A PRIMER

More than 80 percent of organizations are attempting to digitally transform ¹ the way they operate in the twenty-first century as they try to take advantage of the digital DNA that drives success in high-growth organizations. Research, however, shows how tough digital transformations can be, with fewer than one in six organizations truly succeeding in their vision. To yield the true promise of digital, organizations must change the fundamentals of how they think, act, and behave. This book is designed to show you the pathways to digital success with insights and practices based on primary research and interviews with digital leaders across commercial and government organizations. At the heart of everything is the Digital Helix framework and its seven components for success. Through the Digital Helix, we offer the intelligence, frameworks, and structures essential for building an effective digital organization that can thrive in today’s hypercompetitive world.

People are working harder and putting in longer hours than anytime during the past fifty years. Rarely do any of us start working at eight a.m. or stop at five p.m. Technology has created a near-perfect and level playing field for customers and citizens to want to interact with brands and organizations 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, but digital transformations now drive the very underpinnings of how organizations restructure themselves to handle, manage, and hopefully thrive in this new world. In fact, digital transformations are now the engines to deliver startup-like agility to more established organizations. This book seeks to handle a deeper understanding of what the DNA for successful digital transformation looks like. It does not explore the technologies you might apply to help drive your digital transformation, especially because there is no one-size-fits-all approach. It is designed to give you the best opportunity to be successful by explaining the questions, insights, interactions, behaviors, and triggers that are driving performance for organizations digitally transforming themselves to thrive in this digital-first world. Developing these skills at the individual and organizational levels requires a new way of thinking through challenges and opportunities.

We would not be discussing digital transformation with the intensity, fever, or bandwidth that we are were it not for the fact that digital represents and offers a completely different portfolio of economics. Digital makes the expensive cheap and changes the time-consuming to real time. For me, digital transformation is a technical phrase or label for what is really an economic transformation. We are interested in digital because its economics are 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 on digital experimentation and network effects, and is author of The Innovator’s Hypothesis

To help you get a better handle on the what, the why, and most importantly, the how of digital transformation, we have split this book into three parts:

An overview of the digital landscape with identification of challenges and drivers

The new thinking and the Digital Helix framework to help you drive successful transformations

A discussion of the right processes, mindset, and culture that are imperative for thriving with digital transformation

The first part of this book covers the underlying tensions and opportunities presented by a world rapidly becoming digital. Rather than focus on infrastructure, this section is about the experiences we need to solve problems in this new digital world. A large portion of this section helps break down the challenges and drivers of digital transformation. Our research and experience have shown that identifying the drivers and overcoming the challenges is a key differentiator in truly achieving digital results.

The second part, and main bulk of the book, takes a detailed look at how digital leaders and winners are using new thinking, behavior, and measurement to act in new ways. A cornerstone of this approach is using a new framework we have titled the Digital Helix. It integrates all parts of the organization across sales, marketing, communications, product design, customer service, and human resources to make digital transformation far better than the sum of its parts. This comprehensive structure provides the perspectives and tools needed to use digital to outmaneuver the competition across seven key areas that will transform the business:

Leveraging leadership’s daily role as an explorer

Using digital to inform the organization and help listen in new dimensions for ideas and feedback

Understanding that customers have connected portfolios of experiences that drive a different compass for how we respond and interact as an organization

Using marketing and communications as two conjoined functions to deliver real value across each customer touch point

Transitioning sales from simple relationship or transactional selling to focus on the key moments that matter to your customers

Focusing on how all parts of the digital organization need to interact and work together to fuel every customer interaction with insights and in turn make the organization smarter

Using all digital information and insights to simultaneously build better experiences and products

The work world of digitally transformed organizations should feel exciting and intriguing because these organizations will become the platforms for future organizations. The more we talked and worked with these digital leaders, the more energized and optimistic they were about the possibilities.

The delightful part about digital is that if done right, it actually gets people to tell us who they are and what they’re looking for. Organizations can get an actual understanding of what their needs or aspirations are, enabling every business to be much more relevant in their engagement with customers. When that starts to happen, people get excited because you actually see the people you’re trying to reach and serve as they are. And it makes a huge difference. But for this to happen, the rate and pace of the adoption of digital for everyone has to happen quickly and in the right way to act on and harness this new power. Principally, most organizations have a skills and mindset gap with the amount of process change, tooling, and data that is being put into place. I’m convinced that the future of digital is going to change so many things. And we can’t wait. Most people are just as anxious as I am to 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 interesting components for highly successful organizations undergoing the digital transformation process:

The optimal mindset for delivering high performance in any organization

The cultural imperatives for a very different corporate world

The future state of Digital Helix organizations

A discussion about how to get each employee to have the right mindset skills to handle this new, digitally transformed world might sound out of context for a business book. However, as Michael Schrage told us, digitally transformed organizations are fundamentally different from their forebears. Digitally transformed organizations, even those in government, rely increasingly on the skills, mindsets, and cultures of their organizations to define success. Technology is abundant everywhere and capital is generally available at low costs, so tried-and-true growth options no longer can be the only way to drive success. Given the speed and effectiveness of how digitally transformed organizations work, we need to enable people to develop specific and different skill sets. Being more flexible with purpose and managing new and constantly changing information creates pressures not unlike those professional athletes confront. Our research and extensive interviews with executives and senior practitioners in the digital transformation process revealed that digital leaders think differently about high performance. In successful digital organizations, pushing the performance envelope, rewarding high performance, and learning how to invest in optimal mindsets are all critical parts needed to drive and sustain digital changes.

Overall, starting with a feeling of optimism promotes hope and overrides any other sentiments in your work. What would happen if all your employees felt different about coming to work? There would be a different buzz about the building. There would be a different outlook that would help people look forward to what’s next and what’s coming up. This optimism and hope creates an environment that inspires people to seek out their best and find levels of performance that maybe before they never thought were attainable. Starting with this whole new and different chemistry, any workplace is far better suited to achieve its goals and be its best, 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 Digital Helix organization ten to twenty years from now. As we have seen, digital is moving fast and changing organizations rapidly. Leaders must not only recognize 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 this dynamic 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 tools needed to aid you and your organization in delivering real results with digital. We have also added numerous charts, frameworks, and guides to visually show the key elements of digital transformation. The insights shared throughout this book will help you navigate the process of shifting from being just a business doing digital to becoming a true successful digital business now and in the future.

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