Read Part 3 of The Digital Helix Explain in your own words what each key element in the digital helix means. There are 7 elements in total. You must write 50-100 words per each element to re

Praise for The Digital Helix

“You can’t successfully manage transformations without effectively managing expectations. By ruthlessly confronting how digital innovation explicitly disrupt enterprise expectations, Gale and Aarons focus executive attention exactly where it belongs: the challenge of aligning greater expectations with greater value.”

—Michael Schrage, research fellow at MIT Sloan School’s Initiative on the Digital Economy

“In my role at Forbes Media, I have the good fortune and honor to meet personally with, write about and to conduct research among many hundreds of corporate leaders and entrepreneurs around the globe. Each is to a greater or lesser degree leveraging Welch’s dictum and the parallels between those experiences and what I learned from reading The Digital Helix are striking.”

—Bruce Rogers, chief insights officer at Forbes

“Don’t let the title fool you; this goes way beyond digital. Gale and Aarons have given us a refreshing perspective about the importance of simplicity, clarity, and culture in any transformation, along with a poignant reminder that we must never lose sight of our most critical asset—the very people we serve.”

—Colette LaForce, named one of the Top 50 Women in Technology, a Fierce 15 CMO, and CMO Leader of the Year

“Those who can take an adaptive stance, both as individuals and organizations, are best positioned to realize their full potential during uncertain times. Through research and insights, Gale and Aarons provide the approach and tools for executives to lead by example in order to thrive in the digital age.”

—Vanessa Colella, head of Citi Ventures and Chief Innovation Officer, Citi

“It isn’t enough to evolve your existing business processes. Gale and Aarons understand that businesses need real transformation. In The Digital Helix, they provide information and tools to help you understand what successful 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 subject matter covered. It is sold with the understanding that the publisher and author are not engaged in rendering legal, accounting, or other professional services. If legal advice or other expert assistance is required, 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 Aarons All 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 the copyright holder.

Distributed by Greenleaf Book Group

For ordering information or special discounts for bulk purchases, please contact Greenleaf Book Group 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 and printing of this book by taking proactive steps, such as planting trees in direct proportion to the number of trees used: www.treeneutral.com

Printed in the United States of America on acid-free paper

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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 and Look to the Future

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 and Overcoming Ourselves

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

PREFACE

This is the very last page we wrote for the book, but we think it is the first one you should read.

You have probably heard, read, or talked a lot about the idea of digital transformation, both inside and outside of your organization. Like other business and management ideas and terms, digital transformation may feel transient or hip, and you may think it will morph or converge into the general landscape of terms. While the phrase might have different meanings and connotations to you right now, you should recognize that digitally transforming is different from just adopting a digital view or adding digital technologies. This “trend” is now the foundation of how we change our thinking and behavior at the organizational and individual level. This begs the questions, Why should we care about digital transformation, and why now?

Answering these questions is critical to digital success. Thriving with digital transformation is about discovering, building, and even recreating the best DNA version of your organization. This requires a robust discussion about where you are and where you can go. It is about seeing how new ideas and processes can work together in a manner that might sound contradictory to many tried and tested historical approaches. It is about harnessing the immense promise and potential of technology by changing how your organization thinks and functions at all levels. It is also about giving customers and digital citizens what they want, even before they know they want it. Ultimately, it is about enabling individuals and organizations to reach their fullest potentials, now and in the future, by behaving and organizing in different ways.

We have all seen and experienced a significant amount of change in business in just the past decade or so. With Web 1.0, we were given the promise of access and speed to existing businesses or even new business models. With Web 2.0, we saw the ability to connect organizational elements together and deliver more. But digital transformation is different.

Whether it is Web 3.0, 4.0, or even 5.0, digital transformation enables you to be ready for these changes and many others as they come. It is the engine and the underpinnings that enable us to realize our full potential while providing exponential benefits and value to adjust and win in markets and worlds yet to be defined. Your only barrier is creating the right organizational DNA to unleash and maximize its capabilities.

Digital is here and transforming the world around us in new and faster ways than before. Therefore, we must recognize and embrace these changing moments or we will be overcome and left behind in this new world. The question is, Are you and your organization set up and equipped to thrive and reach your full potential or possibly even overachieve in the digital age?

This book is designed to give you the insights, frameworks, and stories to identify where you are and where you need to go. We have also included the tools to architect, design, and build the DNA needed to thrive with digital 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 is near. 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 2000 CEOs, Jack Welch, former CEO of GE. Welch says, “When the rate of change outside the company is greater than the rate of change inside, the end is near.”

The words, like a catchy song you might randomly hear on your Spotify playlist, began to play in an endless loop in my brain. It gets to the heart of the matter of this book: Digital transformation is both necessary and hard. Please pause for a minute to ask yourself where your business falls in this dialectic.

Yes, “digital transformation” may be one of the most overused buzzwords of all time, but this is one of those rare moments when the hype closely matches reality. For many firms thought to be the leaders of our industrial and information economies, these will be trying times. Many will fail—many more, perhaps, than you think. Consider this: It took Amazon twenty-one years to pass Walmart in market value. It took fourteen years for Tesla to pass GM and seven years for Uber to pass Tesla. That’s the power of exponential growth in the digital era. What separates winners from losers? Certainly, leadership plays a central role.

In my role at Forbes Media, I have the good fortune and honor to meet personally with, write about, and conduct research among many hundreds of corporate leaders and entrepreneurs around the globe. Each is, to a greater or lesser degree, leveraging Welch’s dictum, and the parallels

between those experiences and what I learned from reading The Digital Helix are striking.

Two cases in point: John Chambers, the legendary CEO (now Executive Chairman) of Cisco, successfully led the company through what he refers to as “five or six” transformational changes in networking technology that helped him create the vision and culture that would drive Cisco from $70 million 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 into the change with all you’ve got. Much of that strategy took the form of acquisitions, some 180 during his tenure, and Chambers was the master of M&A.

Chambers, who is one of the most personable and humble—yet relentless—CEOs I’ve ever met, is quick to admit his failures as well (like Flip, which turned out to be a $590 million mistake. Oops!) and says this about transformation, “You’ve got to think exponentially. Not literally, like we were all trained. We were trained to be 3 to 5 percent better. And then you’ve got to also think about how you position your company for the market 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 your competitor. If you focus on competitors, you’re looking backwards. Sounds easy, but it’s really hard to do,” says Chambers.

Only three years into his role as CEO of Microsoft, when I met him at the company’s Redmond, Washington, campus, Satya Nadella had transformed the company culture to prepare it for a future of what he termed “ubiquitous computing and ambient intelligence,” a reference to his strategy to tightly weave Office365, Azure cloud, devices, and artificial intelligence initiatives into one seamless platform. The strategy required the company to break down the silos between business units and to change the culture from what Nadella says was one of “know it all” to “learn it all.” Exponential change requires new ways of thinking and leading. Chambers’s charisma and Nadella’s guru-like persona show us that successful digital transformation is first and foremost about change management and cultural change led by example from the top of the organization.

What’s your playbook for managing exponential change? It can’t come from expecting that the rate of change will continue at the same pace you have experienced to date. In Tim Urban’s brilliantly funny and insightful

essay “The AI Revolution,” he writes, “[Futurist Ray] Kurzweil points out that his phone is about a millionth the size of, a millionth the price of, and a thousand times more powerful than his MIT computer was forty years ago. Good luck trying to figure out where a comparable future advancement in computing would leave us, let alone one far, far more extreme, since the progress grows exponentially.”

In today’s digital economy, some organizations succeed by adapting to disruptive threats, moving quickly into new markets, attracting the best talent, and maintaining highly regarded brands. Others struggle. They see market share drain away to upstarts; they respond too slowly to market shifts and suffer employee attrition. They get bogged down in outdated processes and systems.

What separates the winners from the losers in a rapidly changing environment, and why are some enterprises rapidly adopting digitally savvy practices and seeing results while others seem decades behind? The next several years will be shaped by the fourth industrial revolution: a new era brought about by technologies such as the Internet of Things, cognitive computing, artificial intelligence, and robotics. For some companies, the transition 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 less than half say that their organizations have the capabilities or skills to navigate the change. Other Forbes research tells us that 69 percent of CEOs globally acknowledge that they are concerned about their ability to handle unknown and unforeseen issues. Much of this concern is due to new technologies: 85 percent of these CEOs also cite concern about integrating automated business processes with artificial intelligence and cognitive processes into their present business models.

As my friend, Forbes colleague, and best-selling author Rich Kardgaard puts it, “Digital technology changes everything. . . . [It] is like a death star. First, it pulls your industry, company and career into its orbit. Then it wipes out your old, tired (but nicely profitable) business model. Then it imposes its 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 the fiftieth anniversary of the publication of the seminal book The Double

Helix, by James D. Watson, half of the Nobel Prize–winning duo of Watson and Francis Crick, who brought the term DNA into our everyday lexicon.

Michael Gale and Chris Aarons have brilliantly morphed the description of the helix structure of how our DNA is designed and replicated into an analogy for the structure of the modern, digital-first organization, and the book you’re holding serves as the definitive navigation chart to the treacherous waters of digital transformation. It may also come as no surprise that the forces of change outlined in the book were first brought to light by the Austrian-born economist Joseph Schumpeter. According to Schumpeter, the “gale of creative destruction” describes the “process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.” This year marks the seventy-fifth anniversary of the publication of Schumpeter’s book Capitalism, Socialism and Democracy, where the term creative destruction first came to light in 1942.

It’s also telling that The Digital Helix brings to life through research and real-world anecdotes the seven characteristics of a successful digital organization. According to numerology (not that one believes in such things!), 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 to understand the underlying, hidden truths.

Perhaps your firm is struggling to compete against digital-native upstarts. The good news for you is at that it’s not too late to leapfrog the competition and turn size and scale to your advantage. It only takes seven steps.

Bruce Rogers Chief Insights Officer,

Forbes

M

INTRODUCTION

DIGITAL TRANSFORMATION AND THE DIGITAL HELIX: A PRIMER

  ore than 80 percent of organizations are attempting to digitally transform1 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:

1. Leveraging leadership’s daily role as an explorer

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

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

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

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

6. 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

7. 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:

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 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

T

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 n

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