It requires business leaders to roll up their sleeves and perform detailed surgery on the business. For this article, global analysts looked at how five companies did just that: Amazon, Freeport-McMoRan, DBS (a multinational financial services business), Google, and the LEGO Group, and the shifts they made to reach their ambitions.
Simply doing more won't work to get you the full value. Getting to scale requires six shifts that establish new processes and capabilities.
1. From focusing on digital initiatives to focusing on the customer Rewired businesses use data to continuously improve how they serve their customers. This creates a flywheel effect, which requires that companies be intentional about priorities and make explicit choices about what the organization will and will not do to deliver value.
Rewired businesses maintain this discipline in two ways. First, they have a simple overarching goal focused on the customer. While many companies will say they are already focused on the customer and their executives may be able to point to specific examples where that's the case, that customer focus fades the deeper into the organization you go. The commitment to the customer at Amazon, in contrast, can be found at every level of the business, including logistics and supply chain. DBS has oriented its entire digital strategy around "making banking joyful" for its customers by focusing its missions on improving customer journeys. To take just one example, the credit card origination process was a particular pain point for customers. So leadership focused on driving a relentless series of process improvements to reduce the time it took to get a credit card, from 21 days to fewer than four.
Secondly, rewired companies prioritize product management. They recognize that product management is so central to their ability to generate value at speed that they treat it as a strategic priority, investing in the talent, tools, and processes to support it at scale. The foundations of this capability are an effective quarterly business review (QBR) process, which provides leadership with transparency into progress so they can maintain focus on priorities, and strong
product owners, who combine customer, operational, strategic, technical, and business skills in leading teams to develop solutions.
2. From hiring digital talent to developing digital talent everywhere Rewired businesses recognize that talent is their most important asset, and they commit to building a deep, in-house bench. The LEGO Group, for example, realized at one point that about 70 percent of its code was created externally. To bring tech talent in house, it launched a social media campaign to highlight the deep technical problems it was solving and opened digital studios in Shanghai and Copenhagen. These efforts, among others, helped the LEGO Group more than double the number of its systems and software engineers.
Successful companies focus particularly on the following:
- Creating a talent factory. It is critical to not just attract top digital talent but also create an organization where they thrive. That means providing talent with career path options, offering opportunities to work on cutting-edge technology, and continuously building skills that the market values. Google has a program to ensure developers are frequently rotated through the business, not just to make their skills more broadly available but also to provide the developers with new opportunities to learn and grow.
- Building technical skills. With technology and coding techniques changing quickly, it's important to provide time for technologists to continuously refine and expand their skills
3. From agile teams to a product and platform operating model Many digital and AI transformation programs have developed a factory model where 20 to 30 centrally managed teams work in an agile manner to deliver solutions quickly. That approach, however, can't easily scale to support hundreds of teams across an enterprise.
Making the leap requires companies to put in place a distributed operating model built around products (specific solutions or services for internal or external customers, such as web search or a data asset) and platforms (capabilities that enable product teams, such as inventory management or customer relationship management). This model is able to scale because it eliminates traditional operational chokepoints, such as approval processes and budget requests, that slow progress.
A crucial factor in making a product and platform operating model work is that business and IT work much more closely together. IT, in fact, ceases to exist in its traditional role of "requirements fulfiller," though it still has a role in overseeing technology platform teams and in finding tech talent for product teams.
4. From technology as a central capability to distributed engineering excellence On paper, releasing digital assets is simple: a team that knows its own code can rapidly make changes, integrate, test, and release. In most cases, however, that team is not working on a code base they know and control but on a large application with a sprawling and fragile code base that is being constantly modified by many teams. Furthermore, that application depends on many others, requiring extensive coordination, which is further hindered by processes that are highly manual.
To cut this technical Gordian knot, rewired companies do the following:
- Systematically decompose IT into microservices.
- Use modern cloud and MLOps (machine learning operations) practices for scale.
- Enforce modularity standards.
- Enforce engineering standards.
5. From centralized data and analytics to embedding them across the organization In a rewired enterprise, data is embedded in every working team and process, available to everyone at the company through easy-to-use tools. Enabling such access at scale requires data products, which combine various relevant data elements into a format that is easy to consume for a wide range of use cases. One example might be a Customer 360 data product, an asset that various teams can access to create customer-specific solutions. While many companies have created a few data products in their digital transformation, a rewired enterprise develops and manages a continuous flow of data products, often in combination.
6. From a focus on short-term gains to a focus on scaling through a modern culture
The ability to extract full potential value from digital solutions is the key to successful long-term transformations. Rewired companies achieve this outcome by building a culture of continuous growth driven by scaling and supported by reinforcing mechanisms. Rewired companies particularly focus on the following three areas:
- Building a culture of learning leaders
As companies scale, they reach a limit as to what's possible through directive leadership. That's where culture comes in, with an emphasis on instilling behaviors that embody the range of capabilities covered in this article. Rewired companies reinforce this culture by developing leaders who focus on the customer, are digitally savvy, and are less about "knowing everything" than "learning everything." That learning spirit propels teams to innovate through rapid testing and continuous improvement.
Leaders at all levels of the organization have a critical role in building such a culture. DBS, for example, set out to ensure that managers were leading the change, not resisting it. The company invested in training them on how to give good feedback, use data to make decisions, have empathy, and be collaborative. This process allowed DBS to empower many of their managers to become effective contributors on product and platform teams.
The cornerstone of a learning-leader culture is providing leaders with autonomy to make decisions but holding them accountable for outcomes. Amazon, for example, gives its single-threaded leaders the scope to execute their roles but also expects them to define specific customer-facing and financial targets that are inspected on a quarterly basis. An even deeper review occurs each year to determine whether each team gets additional investment or is asked to redirect its focus.
To ensure accountability and that solutions are delivering their full potential value, rewired businesses track progress with the precision often reserved for cutting costs. DBS created a dashboard to monitor in real time the roughly 100 initiatives in progress. This tool was updated weekly and accessible by all employees. This allowed leadership to quickly identify issues and intervene to resolve them so the transformation could maintain momentum.
At Amazon, leaders continually check on the progress of initiatives and reallocate talent and resources to feed those that are performing well. They also embrace the "dive deep" principle, which requires leaders to stay close to the most important details of their initiatives, intervene appropriately to resolve issues, and identify risks.
- Making solutions easy to reuse
Rewired companies enable a culture of autonomy and continuous improvement by making it as easy as possible to reuse solutions across different customer segments, markets, or organizational units. This commitment to reuse previously created and approved code makes it easier for teams to focus on innovating and improving solutions rather than rebuilding them. The core of this approach is assetization (or productization), where solutions are packaged in such a way that they can be easily adapted and tailored—as much as 60 to 90 percent of the solution can be reused in most cases when properly architected.
Rewiring any business is a long-term commitment. But those that do it well can both build value along the way and put real digital distance between them and their competitors. This is the evolution from
doing digital to
being digital.