Digital @ ScaleThe Playbook You Need to Transform Your Company
A blueprint for reinventing the core of your business Value in the next phase of the digital era will go to those companies that don't just try digital but also scale it. Digital@Scale examines what it takes for companies to break through the gravitational pull of their legacy organizations and capture the full value of digital. Digging into more than fifty detailed case studies and years of McKinsey experience and data, the authors, along with a group of expert contributors, show how companies can move beyond incremental change to transform the business where the greatest value is generated—at its core. The authors provide practical insights into the three pillars of digital transformations that successfully scale: reinventing the business model, building out a business architecture from the customer back into the organization, and establishing an 'amoeba' IT and organizational foundation that learns and evolves. This is the ideal guide for all leaders who recognize the power and promise of a digital transformation.
Preamble: Thinking Digital Chapter 1: Digital Is Changing Our World, Quickly and Irreversibly 1.1 What Is a Digital Transformation? 1.2 Established Market Definitions Don’t Apply Anymore 1.3 Pace of Change Is Increasing Exponentially 1.4 Those Who Turn a Blind Eye to Digital Risk Failure and Extinction Chapter 2: Digitization Requires Fundamental Renewal: Digital@Scale 2.1 Why? Things Are Going Well, So Why Do We Need to Change? 2.2 What? What Does Digitization Mean for My Company, and What Priorities Are Derived? 2.3 How? How Do I Manage the Tasks Resulting from a Digital Transformation? 2.4 Cargo Cults Don’t Work Chapter 3: Why? The Clock Is Ticking 3.1 Creating a Sense of Urgency: How Urgent Is Digitization? 3.2 Determining the Kind of Change Required 3.3 Identifying Relevant Assets 3.4 Determining the Aspiration Level for the Transformation Conclusion: Bring on the New Ecosystems Chapter 4: What? Doing the Right Things Intelligently 4.1 Always Online, Gladly Electric, Often on Autopilot: Mobility in the Digital AgeAamer Baig and Gianluca Camplone on the future of motoring. 4.2 Digital Commerce: One Channel Is No Longer Enough—Today’s Mobile Customer Blithely Switches between the Real and Virtual WorldsKelly Ungerman on the future of retail. 4.3 Who Still Needs Banks? Fintechs Threaten the Established Business ModelSomesh Khanna, Vik Sohoni, and Michael Bender on the digital future of the finance industry. 4.4 Digital Health: The First Innovation in Health Care That Can Reduce Costs in the Long TermSri Velamoor and Basel Kayyali on the rocky road to the digitization of health care. 4.5 Connected BuildingsHugo Sarrazin, Kabir Ahuja, and Mark Patel on the buildings and smart homes of tomorrow. 4.6 The Digital Revolution Has Reached Electricity UtilitiesAdrian Booth and Mark Patel on the strategy of the German utilities in response to the digital intruders in their core markets. 4.7 Telecom Giants under Pressure: Who Will Be at the Heart of the Emerging Communications Ecosystems?Brendan Gaffey on the distribution battle between hardware manufacturers, content providers, and telecom companies. 4.8 Digital Logistics: The Drone Always Rings TwiceDavid Frank on driverless trucks, fully connected containers, and small drones that deliver packages to our homes. 4.9 E-Government: Public Administration Goes OnlineMartin Lundqvist on the digitization of public administration, and what citizens can expect. Conclusion: Opportunities in the Emerging Ecosystems Chapter 5: What? Developing Business Architecture 5.1 Omnichannel: A Presence across All ChannelsLareina Yee and Martin Harrysson describe how companies leverage all sales and communication channels to the maximum. 5.2 Dynamic Pricing: Up-to-the-Minute PricesRamji Sundararajan on dynamic pricing, and why two people can pay vastly differing sums for the same product, from the same provider. 5.3 Digital Marketing: Tailored Messages across All ChannelsBrian Gregg on why content is king in digital marketing, and how companies can master the discipline. 5.4 Digital Product Development and Open Innovation: Rethinking Product DevelopmentMichael Uhl and Belkis Vasquez-McCall on how digitization is changing development processes in all industries. 5.5 Product Design: Learning from Software DevelopmentFlorian Weig on how the philosophy of software development is infecting every industry, and what engineers can learn from big data. 5.6 Faster, More Flexible, More Efficient: Supply Chain 4.0Enno de Boer and Sumit Dutta on how digitization is changing every point in the supply chain. 5.7 Digital Lean: The Digitization of ProductionVarun Marya and Gianluca Camplone on the five fundamentals of digital production. 5.8 Digitization in the Office: Bots Take the ReinsAlexander Edlich on the automation of administration. Conclusion: Digitization Is Changing Every Function in the Company Chapter 6: What? Strengthening the Foundation 6.1 Two-Speed IT: Accelerating the Pace for the Digital AgeNaufal Khan on the new challenges for IT, and how companies from the analog age can meet them. 6.2 Big Data and Advanced AnalyticsHolger Hürtgen on the path to better, data-driven decisions. 6.3 Cyber Security: The Art of the Secure Digital EconomyJames Kaplan on the seven steps toward effective safeguards against hacking. 6.4 Embedded Software: Machines and Equipment Go DigitalMark Patel on the five guiding principles that can help traditional hardware manufacturers develop a software strategy. 6.5 The Chief Digital Officer: A Steve Jobs for Every CompanySteve Van Kuiken discusses the art of the digital transformation with CDOs. 6.6 The Digital Organization: All Power to the Multifunctional TeamsJulie Goran on autonomous teams, agile sprints, and product owners. 6.7 Talent Management: Everyone Wants Digital NativesHugo Sarrazin and Satty Bhens on the upheavals in the labor market and the strategies deployed in the battle for scarce talent. 6.8 Partner Management: Stronger TogetherAnand Swaminathan on the art of managing a collaborative network. Chapter 7: How? Decisive, Holistic, and Rapid Implementation 7.1 Creating a Plan 7.2 Think Big: Digitizing the Entire Enterprise 7.3 Surprise! It’s about the Customer 7.4 Breaking Up Functional Silos Chapter 8: How? Ramping Up the Digital Company 8.1 Switching to the Digital Operating System 8.2 Anchoring the Culture Change 8.3 Steering Change 8.4 Encouraging Leadership at All Levels Chapter 9: How? Scaling Forcefully 9.1 It’s about the Whole 9.2 How to Turn IT into a Weapon 9.3 Collaborating Closely with Start-Ups 9.4 Speed as a Guiding Principle 9.5 Rapid Scaling: Digitizing the Entire Enterprise Conclusion: The Digital World Demands a New Way of Thinking Chapter 10: Are We in Good Shape for the Transformation? About the Authors Special Thanks Index
Dr. Jürgen Meffert is a Senior Partner in the McKinsey Düsseldorf office. He is both the Director of Digital McKinsey in the area of B2B, and founder of McKinsey's initiative for SME growth companies. He advises several leading global firms in the telecommunications, high-tech, and media industries, and has overseen extensive transformation programs in various fields, from growth and innovation strategies, marketing, and sales through to processes and organization. Anand Swaminathan is a Senior Partner in the McKinsey San Francisco office. He is a leader at the intersection of Digital McKinsey and McKinsey New Ventures and focuses on helping organizations across industries leverage technology and digital capabilities to evolve their operating models, transform their businesses to effectively serve their customers, and scale operations efficiently. For over 20 years he has focused on serving clients in the financial services, technology, retail, and industrial sectors. In 2015 Anand was named to Fortune magazine's 40 under 40 most influential young people in business.
Everybody talks about digital. But few talk about scaling a full-blown transformation and what it takes. This is no longer about how to quickly grab the attention of the customer or clean up the back office. Organizations need to unlock the full value of digital to reap its true benefits. Authors Jürgen Meffert and Anand Swaminathan, along with some of the top experts in the field, have put together a practical guide to embark on your digital journey and scale it successfully. The authors and contributors will walk you through the three pillars of a successful digital transformation: 1. Reinventing the business model 2. Getting your business architecture right 3. Evolving the foundation with technology and the organization The authors use a plethora of case studies to illustrate why digital transformation is necessary across every industry. This is your digital playbook.
Praise for DIGITAL @ SCALE "The digital transformation IS changing every business, so get on board. Digital @ Scale gives you the playbook on how to unlock the full value of digital across the organization."—Chip Bergh, president and CEO, Levi Strauss & Co. "The authors have successfully captured the essence of what it takes to become a successful digital organization by using a range of different digital transformation examples across industries."—Ryan McInerney, president of Visa Inc. "This book is a practical guide for senior executives on how successful digital transformations need to get done to deliver impact at scale."—Gokul Rajaram, head of product engineering at Square and "Godfather"of AdSense at Google "Digital transformation in any organization requires a holistic change to capture the opportunities new technologies enable. This book illustrates how to envision, motivate, and successfully drive this type of change at scale."—Adam Messinger, former chief technology officer at Twitter Digitization is changing our world and the fundamentals of business faster than many expected. These dramatic changes require a substantial transformation of your organization. McKinsey senior partners Jürgen Meffert and Anand Swaminathan show, together with over 20 digital experts, how you and your company can successfully master the art of digital transformation at scale.
Praise for Digital@Scale "The digital transformation IS changing every business, so get on board. Digital@Scale gives you the playbook on how to unlock the full value of digital across the organization." —Chip Bergh, president and CEO, Levi Strauss & Co. “The authors have successfully captured the essence of what it takes to become a successful digital organization by using a range of different digital transformation examples across industries.” —Ryan McInerney, president of Visa, Inc. “This book is a practical guide for senior executives on how successful digital transformations need to get done to deliver impact at scale.” —Gokul Rajaram, head of product engineering at Square and 'Godfather' of AdSense at Google “Digital transformation in any organization requires a holistic change to capture the opportunities new technologies enable. This book illustrates how to envision, motivate, and successfully drive this type of change at scale.” —Adam Messinger, former chief technology officer at Twitter