{"id":25262,"date":"2019-08-01T00:38:52","date_gmt":"2019-08-01T00:38:52","guid":{"rendered":"http:\/\/wealinternational.com.br\/?p=25262"},"modified":"2019-08-14T00:49:23","modified_gmt":"2019-08-14T00:49:23","slug":"the-drumbeat-of-digital-how-winning-teams-play","status":"publish","type":"post","link":"https:\/\/wealinternational.com.br\/en\/the-drumbeat-of-digital-how-winning-teams-play\/","title":{"rendered":"The drumbeat of digital: How winning teams play"},"content":{"rendered":"\n

Pace and power go hand in hand for digital leaders, which typically run four times faster and pull critical strategic levers two times harder than other companies do.
<\/strong><\/p>\n\n\n\n

Most executives we know have a powerful, intuitive feel for the rhythm of their\nbusinesses. They know how hard and fast to pull strategic levers, move their\norganization, and drive execution to achieve their objectives. Or at least they\ndid. Digitization has intensified the rhythm of competition in many industries,\nleaving executives adrift, with information-gathering systems that are too slow\nor disconnected, direction-setting approaches that are too timid, and talent-\nmanagement norms that are misaligned and incremental.\n<\/p>\n\n\n\n

These leaders know their companies must adjust and accelerate. Digital is putting pressure on profit pools as it transfers an increasing share of value to consumers. Furthermore, those profit pools are bleeding across traditional industry lines as advanced technologies enable companies to forge into adjacencies, changing who in the value chain is making money, what share of the pie they capture, and how. The slow and inefficient are left behind, competing for scraps. <\/p>\n\n\n\n

What is unclear <\/em>to these executives, however, is how much and how fast to adapt their\nbusiness rhythms. The exhortation to \u201cchange at the speed of digital\u201d generates more\nanxiety than answers. We have recently completed some research that provides clear\nguidance: digital leaders appear to keep up a drumbeat in their businesses that can\nbe four times faster, and twice as powerful, as those of their peers.\n<\/p>\n\n\n\n

In earlier studies, we identified 11 strategic and operational practices that are tightly correlated with the successful execution of digital efforts. More recently, we
asked more than 1,500 executives how frequently their companies carry out these 11 practices.1 <\/p>\n\n\n\n

The responses of the best-performing companies\u2014those in the top decile for organic revenue growth\u2014suggest that the accelerated repetition of certain critical practices is closely associated with adaptive cultures that are comfortable with change, learning all the time, and swiftly responsive (Exhibit 1). <\/p>\n\n\n\n

These practices fall into two different categories. One is a set of actions that a company must take continuously (monthly, or even weekly) to increase the pulse of the organization. The other is a set of activities done intermittently (often quarterly) and involves taking a step back to review all that the company has learned, as well as making powerful adjustments or realignments accordingly (see sidebar, \u201cFaster and harder: Behind the numbers\u201d). <\/p>\n\n\n\n

Moving four times faster: The beat of the company <\/strong><\/p>\n\n\n\n

You can\u2019t quicken the pace of an organization by fiat. You have to build it by accelerating\nthe frequency of manageable practices that are integral to achieving key goals, such\nas serving the customer or driving internal efficiency. These \u201clight-touch\u201d actions are\nlow risk and low investment, but they can provide high-yield returns. We have grouped\nthem into two buckets that can help mold incumbents into digital players.\n<\/p>\n\n\n\n

Learn, engage, and share <\/strong><\/p>\n\n\n\n

How often does your organization analyze customer data to look proactively for new ways of delighting your customers? How frequently do your senior business leaders take time to investigate and understand new digital technologies so that they recognize which ones are truly relevant to their areas of the business? How quickly and consistently does your company share lessons acquired from test-and-learn experiments performed by those on the front lines? If you are like most organizations, you aren\u2019t performing these tasks fast enough: <\/p>\n\n\n\n

\u25cf Learning: From quarterly to monthly. <\/em>Top-performing companies are voracious opportunists, and it starts at the top. Senior leaders take time to tune up their understanding of the digital tools and practices their businesses need to stay ahead. That happens monthly (often, more frequently) at the best performers, compared with quarterly at the lower performers. Much faster than average companies, top companies scan for digitally enabled productivity opportunities and for external-environment shifts that are changing the economics and boundaries of their businesses. <\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

\u25cf Engaging with data: From monthly to weekly. <\/em>Nearly half (44 percent) of digital leaders collect and analyze customer data weekly (or more frequently) to identify new ways of winning over buyers, compared with just 16 percent of laggards, which, on average, dig into customer data only monthly. And the drive for urgency is omnipresent. A company with a database of 2,000 customers, for example, decided to generate online sales by offering a discount code. Instead of simply sending a single email to its customers, it tested two different promotional offers, one demanding faster action from customers than the other. The more time-sensitive offer generated a 60 percent higher response rate, which became the standard for future promotional emails. <\/p>\n\n\n\n

\u25cf Sharing results: From quarterly to monthly\u2014or even weekly. <\/em>To ensure that results such as those in the previous example permeate the organization, top-performing companies encourage employees to share their lessons from lower-performing tests and successes from better-performing ones. As basic as this practice might seem, top-decile performers are five times more likely than others to do this weekly. <\/p>\n\n\n\n

And top performers are committed to sharing with the broader organization what has been gleaned from any test-and-learn activities. They do this about three to four times faster than their peers do\u2014at least monthly, rather than the quarterly frequency seen in other companies\u2014with the very highest performers sharing knowledge weekly. <\/p>\n\n\n\n

\"\"


<\/figcaption><\/figure>\n\n\n\n

<\/p>\n\n\n\n

Why do these particular actions matter so much? As Gandhi said, \u201cYour actions\nbecome your habits; your habits become your values; your values become your\ndestiny.\u201d It goes back to the elements of organizational culture\u2014risk taking, customer\nfocus, silo busting\u2014that our past research has highlighted as core to digital\neffectiveness. Focusing on frequent inputs about what your customers are wanting,\nand how new technologies can help you deliver that, drives both a more customer-\ncentric view and a greater confidence about what direction to take new offers.\nSharing insights about what is working and what is not beyond the team that launched\na particular initiative helps break down siloed views of both the business and the\ncustomers, and it can spur calculated risk taking in other parts of the organization. As\nGandhi knew well, small but frequent actions can lead to big and meaningful changes.\n<\/p>\n\n\n\n

Adapt and deploy <\/strong><\/p>\n\n\n\n

The top-performing companies in our survey are just as opportunistic when it comes to redistributing talent. This often comes through the formation, dissolution, reformulation, and work of agile teams, whose many small, low-risk steps enable swift progress, rapid talent reallocation, and massive change (Exhibit 2). At agile companies, incrementalism enables breakthroughs by lowering the risks at each step: <\/p>\n\n\n\n

\u25cf Talent reallocation: From yearly to quarterly. <\/em>On average, leading companies reallocate digital talent more than five times faster than their peers do, doing so on a quarterly or faster basis. Most companies wait a year or more to reallocate talent. This large spread is likely to grow as more companies expand their use of agile methodology beyond IT. Agile ensures that organizations bring together small multidisciplinary teams aligned on common goals. These groups make iterative progress on\u2014and continuously manage their backlogs of\u2014those activities that matter most in achieving critical outcomes. Their work enables rapid, large-scale reprioritization of digital initiatives and has the added merit of lowering the risk on bold moves. <\/p>\n\n\n\n

\u25cf Agility in action: From every two\nmonths to every two weeks. <\/em>At\nthe Dutch banking group ING, for\nexample, an agile workplace has\nallowed the company to reinvent\nthe way it serves customers.\nPeople increasingly use a variety\nof channels for financial services:\nbranches, smartphone apps,\nlaptops. They want every one of\nthose experiences to be seamless.\n<\/p>\n\n\n\n

Agility accelerates everything. Cross-functional \u201csquads\u201d of nine people or fewer focus on delivering solutions for specific needs of their customers in ways that were impossible in the old organization. Squads with a shared overarching mission (such as mortgages, payments, or consumer credit) are united in \u201ctribes\u201d of 150 employees or fewer. Reallocation of talent is executed swiftly, with focus on value. Each tribe is headed by a lead who can deliver key resources, including IT engineers, as needed. These tribe leaders convene once a quarter in a quarterly business review (QBR). Before the QBR, tribe leaders share a brief memo with all of their peers, documenting what the tribe achieved in the past three months, as well as what it was unable to accomplish and why. They also share, in writing, their commitments for the coming quarter and document the resources and support they require to achieve these ambitious goals. Based on this input and related conversations, the bank\u2019s top management reallocates talent to the tribes with the greatest opportunities. The process has unleashed creativity and productivity. At the beginning of the journey, ING could only deliver four new software releases a year, a pace that would have
left it hopelessly behind its customers. These days, ING delivers new software on an ongoing basis, at an astonishing rate of more than 20,000 small releases per month. <\/p>\n\n\n\n

Driving your strategy with twice the power <\/strong><\/p>\n\n\n\n

Our survey findings make clear that digital leaders undertake big strategic\ninitiatives more often\u2014and more successfully\u2014than their peers do. They are more\nlikely to develop entirely new digital offerings or to launch new businesses.2 Their\ndigital transformations are more likely to be deep, organization-wide efforts than\nexperiments conducted on the fringes.\n<\/p>\n\n\n\n

Big moves that turbocharge digital effectiveness are underpinned by strategic clarity\nand adaptability. The two go hand in hand because keen insights and a view of the\nfuture are more powerful when combined with learning through experimentation.\nCompanies with both have the confidence to make big calls when others are frozen in\nwait-and-see mode.\n<\/p>\n\n\n\n

Two of the most important such calls are major acquisitions and capital bets. Not only are these two of the five big moves shown by our colleagues in separate research3 to be the greatest contributors to exceptional corporate-performance improvement, they also loomed large in our findings\u2014powerful differentiators that separated digital leaders from laggards: <\/p>\n\n\n\n

\u25cf Our survey suggests that digital leaders spend three times more on M&A (27 percent of annual revenue, compared with 9 percent spent by others) and dedicate more than 1.5 times more of their M&A activity to the acquisition of digital capabilities and digital businesses (64 percent, compared with 39 percent for their peers). Taken together, those results suggest that the leaders are pursuing digital M&A about twice as hard, on average, as everyone else. <\/p>\n\n\n\n

\u25cf Digital winners typically allocate 9 percent of their capital expenditures toward\ndigital-transformation efforts, while others allocate half that much\u2014again, twice\nthe power for digital leaders. The results are transformative as well: expenditures\nthat lead to better analytics tools or greater automation can be key in building\ncompetitive advantage over digital competitors.\n<\/p>\n\n\n\n

Strategic power and rapid pace are mutually reinforcing. When digital leaders
\nlaunch initiatives at a greater rate than peers do, they create opportunities to collect\ndata, analyze them, and learn faster than other companies. That learning about the\nevolution of markets, consumer attitudes, and behavior, in turn, sets those companies\nup to make bigger, better, faster acquisition and capital-expenditure decisions\u2014\nwhich, in turn, fuel new initiatives and more learning.\n<\/p>\n\n\n\n

Accelerating the digital drumbeat: A checklist for companies <\/strong><\/p>\n\n\n\n

The speed and power with which digital leaders move are best illustrated through\nexamples. So let\u2019s examine a group of financial-services players that dramatically\nincreased the rhythm of their business in response to emerging digital challenges.\nOne company, which had performed well by steadily improving productivity, was\nseeing leaner digital players cherry-pick its clients, forcing consideration of radical\ndigital interventions to its core business model. Another company had seen its\nportfolio of new, B2C businesses, which delivered the highest profit growth in\nthe company, getting hammered in the press for poor customer experience and\nunimaginative offerings.\n<\/p>\n\n\n\n

The CEO and heads of the business lines in these organizations agreed something <\/em>had to be done\u2014they just weren\u2019t sure what. To accelerate learning, one company empowered a new group to examine the end-to-end journeys of their customers and built out an insights and analytics group to uncover unmet needs. This gave the company the knowledge it needed to do a cleansheet redesign of its current offerings and to create some new ones. Another company launched a tech-enabled productivity transformation of its core business, aimed at embedding artificial intelligence and automating a variety of functions. The direction was starting to crystallize for these organizations. But the companies needed to take five interrelated actions to support their digital goals. <\/p>\n\n\n\n

<\/p>\n\n\n\n

1. Seeking real-time digital learning <\/strong><\/p>\n\n\n\n

The executive teams knew that their business leaders, while familiar with the basics\nof digital, needed to become both deeply knowledgeable about the advanced\ntechnologies their units were starting to deploy and able to think, in real time, about\nthe strategic implications of technologies and tools. Robotics, for example, was no\nlonger about building machines but about automating the assembly of digital apps\nthat would be immensely important to ongoing customer interactions. This raised\nimportant questions: If you can automate 10 percent of 100 app-creation jobs, do
\nyou simply save the full-time equivalent of ten people, or do you redeploy them to\nother digital thrusts, perhaps in other areas of the organization? And how do you align\nexecutive incentives behind such resource shifting?\n<\/p>\n\n\n\n

Rather than inundate business leaders with educational material, one organization\nlaunched a cross-functional initiative to discover jointly how AI-supported robotic\nprocess automation could boost productivity, drive down cost, and expand\nstrategic options. Cross-functional teams cocreated pilots and shared their models,\nassumptions, and findings in monthly meetings attended by the business leaders,\nincluding those whose headcounts were in question. This practical and open\napproach simultaneously gave key leaders a valuable education in the potential of\ndigital and crafted consensus around resource reallocation.\n<\/p>\n\n\n\n

<\/p>\n\n\n\n

2. Sharing insights at the pace of digital <\/strong><\/p>\n\n\n\n

The companies had plenty of algorithms to identify inefficiencies but did a poor job of\nturning the tremendous amount of data they had\u2014about interactions with customers\nand how customers used (or didn\u2019t use) its products\u2014into valuable insights that could\nlead to new and better products and services. Part of the problem had to do with\ntechnology: the companies lacked key algorithms in customer-facing areas.\n<\/p>\n\n\n\n

But another part of it was the result of an organizational weakness. Droves of\ncustomer insights were trapped in silos. The operations teams had information on\nwhich customer issues pushed up costs. The marketing teams had insights into
\nwhat drove or lost sales. Channel partners had data on why customers had chosen a\ncompetitor\u2019s offering. Not only were the insights siloed in disconnected groups, but\nwhen data in one silo contradicted data in another, nothing was done to reconcile the\nfindings, meaning that divisions were sometimes working at cross-purposes.\n<\/p>\n\n\n\n

With the backing of the CEO, one executive team instituted a quarterly check-in\nacross the businesses to identify top customer pain points coming in from their\nwebsites, call centers, and product-usage databases. As people across the company\ncame to see the value of these check-ins, meetings started occurring monthly or even\nmore frequently. For example, small, cross-cutting groups met weekly to share the\nfindings of their tests and pilots and to talk about where they might find resources\n(including those for a new analytics team) to fix the problems surfaced in those tests.\nThese insights were shared directly with business-unit heads to help drive alignment\nat the executive level and to ensure that everyone was on the same page as to what\nthe problems were and what solutions were working.\n<\/p>\n\n\n\n

3. Deploying digital talent with agility <\/strong><\/p>\n\n\n\n

Talent was a bottleneck holding back the pursuit of digital initiative in the\norganizations we spoke with. Matters were made worse by the many different ways\nindividual divisions deployed, prioritized, and ran the operating expenses associated\nwith digital talent. While the marketing function, for example, might have completed\nits part of a project, the initiative would stall out if the operations function hadn\u2019t\nprioritized launching the new initiative. Resources in one company were truly agile\nonly within silos, not across the organization, and divisions reviewed talent allocation\nat wildly different intervals.\n<\/p>\n\n\n\n

To get this right, the senior-leadership team formulated a consistent set of criteria for\nprioritizing the deployment of digital talent. As a group, it came to grips with resource\ntrade-offs, such as productivity versus customer experience, and core versus new\nbusiness. These criteria were reconsidered every quarter, and they changed as the\ncompany learned more about the efficacy of different elements of the digital strategy.\nThe reallocation, however, was done weekly, in keeping with the urgency of digital\ninitiatives and competitive threats.\n<\/p>\n\n\n\n

4. Reallocating resources flexibly <\/strong><\/p>\n\n\n\n

Since these companies were on steep digital-learning curves, they regularly found\nthat they had overfunded certain projects and underinvested in others. Initiatives\nthat seemed most promising at the start of a quarter might seem less critical three\nmonths later. Perhaps a company had learned that scaling the project would cost
\nfar more than planned, or perhaps another project had come to show much greater\npotential. Traditionally, one company had looked at reallocation once a year and given\ngreat leeway to each division head. With these kinds of digital discoveries happening\noften and everywhere, the annual process had to be drastically reconfigured.\n<\/p>\n\n\n\n

First the top team shifted priorities for operating and capital expenditures, carving\nout a portion reserved for the execution of the digital strategy. Then they moved from\nan annual frequency to a quarterly one so that resources would always be focused\nwhere they would do the most for the enterprise as a whole. Not surprisingly, this\nwas a difficult transition for many of the business-unit leaders, since they were\naccustomed to having their own budgets and calling the shots. While their input was\nstill critical, they no longer had the final say: if a major cross-cutting initiative needed\nresources, they had to come from somewhere\u2014and that might well force a business-\nunit leader to free up funds by placing a certain digital priority on the back burner.\nThis piece was the most contentious, and there have been periods of backsliding, but\nthe organization is moving steadily toward this new direction.\n<\/p>\n\n\n\n

5. Shifting the culture <\/strong><\/p>\n\n\n\n

The frequent sharing of insights, successes, and failures buoyed the confidence of key leaders. And on the front lines, the freedom to make many small moves quickly diminished risks and started shifting the culture: managers and employees became less afraid of failure as they pursued digital initiatives. Considerations of M&A and capital expenditure, meantime, became more about business impact and well- understood risks (thanks to better data) and less about organizational politics. As leaders became clearer on how, exactly, their digital efforts were contributing to the twin goals of driving down costs and creating new and improved customer journeys, they grew more comfortable making bigger bets and swiftly reallocating human and financial capital.4 The full transformations are still under way because of the complexity of the organizational change, but the momentum is building with each success the companies achieve. <\/p>\n\n\n\n

___________________________________<\/p>\n\n\n\n

Aspiring to the speed and power of digital leaders may seem daunting. But increasing the rhythm of your business is an achievable goal; it just requires building out a set of clear, collaborative, and consistent practices for digital learning, engaging with data, sharing results, deploying talent, and reallocating resources. One of evolution\u2019s lessons is that adaptable species outlive those that are merely more powerful. By accelerating the digital drumbeat, your company can transform itself from a powerful but slow target into a sleek and swift predator\u2014the fastest fish that feasts on the slower ones that have failed to change. <\/p>\n\n\n\n

<\/p>\n\n\n\n

————————————————————————————————<\/p>\n\n\n\n

2 We have found, for example, that incumbents implementing artificial-intelligence initiatives move up the digital-\nlearning curve at an accelerated rate, which helps them close the gap with first movers in their industry. See \u201cNotes\nfrom the AI frontier: Modeling the impact of AI on the world economy,\u201d McKinsey Global Institute, September 2018,\nMcKinsey.com.\n<\/p>\n\n\n\n

3 See Chris Bradley, Martin Hirt, and Sven Smit, \u201cStrategy to beat the odds,\u201d McKinsey Quarterly<\/em>, February 2018, McKinsey.com. <\/p>\n\n\n\n

Jacques Bughin is a director of the McKinsey Global Institute and a senior partner in McKinsey\u2019s Brussels office, Tanguy Catlin is a senior partner in the Boston office, and Laura LaBerge is a senior expert in the Stamford office. <\/p>\n\n\n\n

source: https:\/\/www.mckinsey.com\/~\/media\/McKinsey\/Business%20Functions\/McKinsey%20Digital\/Our%20Insights\/The%20drumbeat%20of%20digital%20How%20winning%20teams%20play\/The-drumbeat-of-digital-How-winning-teams-play-final.ashx<\/p>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Pace and power go hand in hand for digital leaders, which typically run four times faster and pull critical strategic levers two times harder than other companies do. Most executives we know have a powerful, intuitive feel for the rhythm of their businesses. They know how hard and fast to pull strategic levers, move their […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[17,16],"tags":[48,21],"_links":{"self":[{"href":"https:\/\/wealinternational.com.br\/en\/wp-json\/wp\/v2\/posts\/25262"}],"collection":[{"href":"https:\/\/wealinternational.com.br\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/wealinternational.com.br\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/wealinternational.com.br\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/wealinternational.com.br\/en\/wp-json\/wp\/v2\/comments?post=25262"}],"version-history":[{"count":4,"href":"https:\/\/wealinternational.com.br\/en\/wp-json\/wp\/v2\/posts\/25262\/revisions"}],"predecessor-version":[{"id":25268,"href":"https:\/\/wealinternational.com.br\/en\/wp-json\/wp\/v2\/posts\/25262\/revisions\/25268"}],"wp:attachment":[{"href":"https:\/\/wealinternational.com.br\/en\/wp-json\/wp\/v2\/media?parent=25262"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/wealinternational.com.br\/en\/wp-json\/wp\/v2\/categories?post=25262"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/wealinternational.com.br\/en\/wp-json\/wp\/v2\/tags?post=25262"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}