[email protected]: The Playbook You Need to Transform Your Company - was published by Wiley in the summer of 2017, in which authors Jürgen Meffert and Anand Swaminathan offer a blueprint for reinventing the core of a business. The book provides practical insights into three key elements of digital transformation, which will go some way towards helping leaders understand that digital is far broader and more fundamental than what they've been led to believe by marketing hype.
Having read the book, this post is intended to whet the appetite of those that are yet to invest a small amount of their time and money in acquiring the knowledge this book provides. I do this by listing the titles of the 10 core chapters and providing a glimpse of what you can expect to find in them, after you buy the book.
The Next Phase of the Digital Era
The digital revolution is here, and no industry is immune from its impact, which is good news for all companies, large or small - at least for those with leaders that have the right mindset - because there are tremendous opportunities on offer.
Value in the next phase of the digital era will go to those companies that don't simply "try digital" - but who also scale it. The book examines what it takes for companies to break through the gravitational pull of their legacy organisations and capture the full value of digital. Digging into more than fifty detailed case studies and years of McKinsey experience and data, the authors and a small army of expert contributors, explain how companies can move beyond changing incrementally to transforming the business. Because while companies claim they are transforming their business, a worrying proportion are simply executing digital change projects, which merely create a new version of what already exists - a better version of the past. Which will not be enough to thrive - or even survive - in a full-blown digital economy.
Throughout The Book ...
The authors provide practical insights into the following three pillars of digital transformations that successfully scale:
- Reinventing the business model
- Building out a business architecture from the customer back into the organisation
- Establishing an 'amoeba' IT and organisational foundation that learns and evolves
The book is a useful guide for all leaders who recognise the power and promise of a digital transformation - who want to avoid being steered by 3rd parties - and chart their own course in the digital economy. Below we'll take a brief glimpse at what you can expect to find in each of the chapters when you read [email protected]
Chapter 1: Digital Is Changing Our World, Quickly and Irreversibly
No good book can go without setting the scene, so although what is written in chapter one will come as obvious to some, it goes some way towards expanding the horizons of those that have have been brainwashed into believing that digital is all about marketing. And that those who turn a blind eye to the full extent of risks and opportunities in the digital era, will gradually fade into the history books. The authors provide concrete answers to the following questions, and include numerous success stories, which can help put people and their companies on the path to a more successful digital future:
Why does a company need to change in light of the digital challenge, and how critical is the topic of digital for the company’s business?
What precisely needs to change—from the overall business model and the central elements of value creation such as product development, marketing, and the supply chain, through to basic functions such as technology, organisation, and corporate culture?
How will the company organise digital transformation and change structures, processes, IT, and management instruments?
I wrote the book because there is a lack of structure, and there is also a lack of guidance that management might need, and I wrote it because it's a lot of fun. It's innovation - it's going to change our lives going forward.
- Jurgen Meffert
Chapter 2: Digitisation Requires Fundamental Renewal
Here the authors explain that the concept for a successful transformation into a digital company is based on the answers to the three fundamental questions of WHY? - WHAT? - and HOW? They suggest that while it’s easy to build an app, a true digital transformation is much harder. I feel that more time spent explaining this fact would help more firms understand this statement better. Simply because there are too many firms believing they are transforming their business, when in fact all they are doing is digitising the past. So they continue to suffer the delusion of digital transformation.
That said, the book's transformation framework illustrates how transformation leaders need to address far more than technology and customer journeys, and I was pleased to see that the book explores each of these components:
- Building new ecosystems
- Developing business architecture
- Strengthening the foundation
- Creating a plan
- Scaling up
- Ramping up the digital company
Another unsuitable method is to bolt a digital process
onto any opportunity that seems to appear.
I loved the term "Digital Sugar-Coating", which is a good alternative to what I've previously described as The Great Digital Illusion. The authors explain how digital sugar-coating is what companies are doing if they introduce social media campaigns, or perhaps the collection of data that doesn't get used, and believe that these activities mean they are transforming their business. This is delusional, and the time bomb continues to tick.
Chapter 3: Why? The Clock Is Ticking
Chapter 3 warns us about the ticking clock, and that only CEOs can explain to employees the need for digital change, define the scope and direction needed, and overcome the forces of inertia in the company. Perhaps this message will help some CEOs realise that they can no longer afford to turn a blind eye to digital or "leave it all to the CIO to get on with".
In his book, A Sense of Urgency John Kotter explained that a true sense of urgency is rare, and the authors of [email protected] build on the urgency concept by explaining that in order to determine the degree of urgency for digitisation, management should answer 10 critical questions on the current strategy of their company. Only then can the march toward to the digital future can begin in a proper manner. They add that, the greater the extent of digital penetration, the more urgent the need for change, and once past the turning point, generally only those companies that completely revise their business model will survive.
Someone like Jeff Immelt, the former CEO and chairman of GE, led the change around thinking about digital for an industrial business like GE. We find in many cases that the CEO and the C-suite are the true change agents when it comes to digital, especially when driving the digital transformation at a scale perspective.
- Anand Swaminathan
Chapter 4: What? Doing the Right Things Intelligently
Here the authors remind us that digitisation is a very broad term, and that a programme needs structure. It’s about new ecosystems, further development of the business model, and acquiring fundamental skills. When managers today talk about the challenges of digitisation, they encounter countless definitions and completely different views. So the authors introduce three levels at which companies can expect to face specific challenges on the road to the digital future:
- Building new ecosystems
- Developing the business architecture
- Strengthening the foundation
Chapter 5: What? Developing Business Architecture
Here the book delves deeper into developing business architecture, and explains that the digital age demands new skills, and that companies aspiring to be successful in their industries and the emerging ecosystems must get their functions and processes in shape for the new era. The authors explain that in many industries that deal with the end customer, digital measures have only led to a set of further sales and marketing channels—online, mobile devices, social media, and chat forums. Once again, this is a good example of the fact that many firms simply haven't grasped the full meaning of transformation. They only see the tip of the iceberg.
This chapter is rich in information, and as well as reminding us that the keys to digital transformation success include data, organisation and culture, it also addresses the omni-channel challenge, dynamic pricing, tailored messages, digital product design, development, and open innovation. How digitisation is changing every point in the supply chain, the digitisation of production, office-work, and administration are all considered - leaving us with the conclusion that digitisation is changing every function in the company.
Chapter 6: What? Strengthening the Foundation
Here the authors explore the foundations for success and present three fundamental questions for companies to consider:
- How will it get in shape to meet the challenges of digitisation?
- What help will be available to analyse the enormous data volumes?
- What type of organisation does a company need to succeed in the digital world?
The chapter looks at two-speed IT, big data and advanced analytics, cyber security, embedded software, and the notion of "having a Steve Jobs in every company". It also addresses the digital organisation and its multi-functional teams, the fact that the best firms are looking for digital natives, and the challenge of managing partners and a collaborative network.
A CDO with reach and authority - a Steve Jobs for every company - can help to break down the functional silos, and shape the journey toward digitisation as a permanent disruptor.
Chapter 7: How? Decisive, Holistic, and Rapid Implementation
After the authors covered the Why and the What of the transformation process, they move on to implementation. In the next three chapters, they describe the How. This is about putting the Why and the What it into action, and actually transforming the company. This is something that is often grossly under-estimated and already there is plenty of evidence that suggests many firms are struggling to translate their strategy into reality. As the old saying goes ..."strategy is often three times more difficult to deploy than develop".
The authors touch on how to create a plan, digitise the entire enterprise, break up silos, ramp up the digital company and scale. They also reinforce the well-worn catchphrase: "it's all about the customer".
Chapter 8: How? Ramping Up the Digital Company
Here the authors consider what comes after the plan. A time when the organisation needs to get in shape for digitisation and transition from theory to practice. Transformation readiness is where many firms flounder as they underestimate the gap between operational capability and transformation capability. So the authors write about switching to the digital operating system, anchoring the culture change, steering change, and encouraging leadership at all levels.
Chapter 9: How? Scaling Forcefully
In this penultimate part of the book, we are encouraged to consider rolling digitisation out to the organisation as a whole, which means doing [email protected] It's about "the whole" - how to turn IT into a weapon, collaborating closely with start-ups, speed as a guiding principle, and digitising the entire enterprise. It explains that digital competence must also be present at management levels, most importantly at the executive board and supervisory board levels, and at the second management level.
The conclusion is that the digital world demands a new way of thinking. A new mindset. One that is very different from the mindset that created the corporate success stories of the previous century. It's a reminder that the operational excellence that got companies to where they are today, is not the transformation excellence they needs to thrive in the digital economy. We are reminded that permanently outsourcing digital work to a third-party service provider means that the business always lacks the necessary expertise in digital, and becomes dangerously reliant upon service providers. So companies need to build their own transformation capabilities.
Chapter 10: Are We in Good Shape for the Transformation?
The tenth and final chapter describes how innovation cycles run ever faster, with each of us experiencing ever more discontinuity. Authors Anand and Jürgen close by discussing the markets and technology of the digital age, examining and putting forward proposals on what is needed to successfully negotiate the upheavals of the future.
Buy The Book
Digital @ Scale: The Playbook You Need to Transform Your Company
Anand spoke with [email protected] about why speed is key to transforming companies in the digital age. Hear the interview and see the transcript.
Jürgen Meffert is a senior partner in McKinsey’s Düsseldorf office. As the global head of our Telecoms, Media, and Technology Practice, he is a recognised thought leader who has published extensively and speaks frequently at business and technology forums. McKinsey profile | LinkedIn profile
Anand Swaminathan is a senior partner in McKinsey's San Francisco office. He helps clients harness the full potential of technology and digital capabilities to achieve sustainable growth and improve performance. McKinsey profile | LinkedIn profile
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