by Dave Aron | March 23, 2013 | 1 Comment
We have kicked off the work for a six month project to investigate Digital Business Strategy (to be published as the September Gartner EXP report) – What is one? What does it contain? What is its relationship to overall business strategy, and IT strategy? How to create one? etc.
The early stages of the research highlight a worrying issue. Just as traditional enterprise IT has been heavily skewed towards automating internal processes (the back office), it looks like there is serious danger of digital strategies being equally skewed. In the public sector they are commonly skewed toward the issue of digital inclusion – making sure everyone has digital access to government services. In the private sector they are skewed towards digital marketing.
These are important focuses, but not the whole story. Digital considerations can impact the whole of the business model – how we collaborate internally and externally, what our products, channels and markets look like, how we exchange value with clients and partners, how we use information to make decisions, etc.
Bruce Lee, martial artist and movie star, famously said “The best thing we can do for our children is kill our own ghosts.” If Bruce was a digital business leader (or Gartner analyst 
), he might have said “the best thing we can do for our digital business strategies is kill our own biases (as to how and where digital affects our business).”
Category: Uncategorized Tags: business, digital, inclusion, marketing, strategy
by Dave Aron | March 8, 2013 | Comments Off
I am really looking forward to co-chairing The EMEA CIO Leadership Forum “The Digital Enterprise and Beyond” – next Monday to Wednesday – at the Sofitel Heathrow T5.
We have some fascinating external speakers, including Michael Woodford, ex-CEO of Olympus, Sebastian Herfurth, co-Founder of Friendsurance, Rory Sutherland, Creative Director at Ogilvy, and Gerry Pennell, who led technology for the London Olympics. We also have a panel with four top executive search and selection experts. As well as more than 50 great sessions led by Gartner colleagues, around digital leadership issues.
Looking forward to seeing clients and colleagues there.
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by Dave Aron | March 4, 2013 | Comments Off
I just got back from a two week detox. On detox programs you have a lot of time on your hands, and you don’t feel too keen to enter the outside samsara of food, drinks and merriment. Trapped in my austere little beach hut, I did a lot of reading and writing, and reflected on what I have found most interesting and disruptive in the last year. Two things stood out for me:
1. On a positive note, the digital opportunity for win-win. It is quite easy to view the increasingly digital context we operate in as just another aspect of context that we have to deal with (along with macroeconomics, politics, law and regulation, competition etc.) A second perspective is to view digital as a new competitive space, a battle to be won, both in terms of beating competitors, and in terms of getting more profit out of customers. Whilst both of those views are accurate and useful, what is most exciting is digital win-win, where new digital capabilities allow an outcome to be reached that is better for all participants than was previously possible. For example, car insurance that is more accurately priced based on monitoring customer behaviours in a more granular fashion – potentially a win for the customer (cheaper prices), the insurer (higher quality risks), and society (more responsible behaviours). Or alternatively, ‘servicization’, where products are sold as services, serving a higher level need – e.g. I don’t sell you ball bearings for a fixed price, I get rewarded for a service that improves your factory equipment performance (e.g. SKF’s reliability business). Bounty-based crowdsourced markets (such as Topcoder for software, 99designs for design, Innocentive for ideas, Threadless for t-shirts) can also unlock previously unreachable value. I may never have otherwise found the freelance designer in Eastern Europe who can design amazing graphics the way I like for a great price, but a crowdsourced competition can bring us together. Digital can be used to unlock what economists would call ‘deadweight losses’ – sub-optimal equilibria we get stuck in. The overarching exciting concept here is digital win-win. Are there opportunities for your company to unlock some digital win-win opportunities?
2. On a slightly more challenging note, I considered the lack of digital (re)specialization at an industry and national level. This may be overly simplistic, but I see the vast majority of countries and companies thinking of digital as a new commodity – where they must play catch up – rather than a new way of expressing their unique meaning/ mission/ message for success and advantage. So many national approaches to digital seem to read very similarly to me – about digital first, digital by default etc. And many company approaches to digital seem to be about making things available electronically, allowing customers, employees and others to do things digitally. This is all well and good, but there are at least two levels of thinking that would be nice to see on top of that. First is how to do things differently with digital. It is not just about doing the same stuff more efficiently/ effectively/ more accessibly, it is about being prepared to do things deeply differently recognizing digital realities. Friendsurance, whose co-founder Sebastian Herfurth will be on stage with me at Gartner’s EMEA CIO Leadership Forum next week, is a great example of this. Second is what will make your country/ agency/ business uniquely different in a digital context. We have seen countries take specific roles in the global economy for periods in the past, but how about in the digital future? Similarly for companies, it feels more of a digital me-too/ catchup game for most. I fear that few are thinking about digital (re)specialization, how will we use digital to amplify our differences/ create new differences. If we can think more like that, we will have a much more productive global economy based on ideas of comparative advantage, rather than a zero-sum game digital future.
I am hoping that Chief Digital Officers, CIOs and all other C-level leaders taking digital leadership roles in companies, public sector agencies and countries will be thinking about digital win-win and digital specialization in 2013 and beyond.
Category: Uncategorized Tags: CDO, Chief Digital Officer, digital, digital strategy, strategy
by Dave Aron | February 1, 2013 | 3 Comments
Last year, as part of the Gartner Maverick program, I wrote about a radical new model for talent – clusters. Today, the idea is being discussed on the Harvard Business Review Blog Network.
http://blogs.hbr.org/cs/2013/02/the_future_of_talent_is_in_clusters.html
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by Dave Aron | November 21, 2012 | 4 Comments
At our symposia in Barcelona, Orlando and Gold Coast – I presented my maverick research called “Stop Hiring People; Start Hiring Clusters”. The core idea behind it is that companies should hire pre-formed teams who have learned to work together and have their own tools and work practices, but to hire that team as a permanent asset of the company. This is different to teams of consultants, in that the team is a permanent part of the company. It is different to conventional employment, in that the company doesn’t have a relationship with the individuals in the team, only with the cluster – based on outcomes. The cluster is entirely self-managing – in the extreme case hiring and firing its own members and apportioning remuneration amongst its members, without the knowledge of the company. (This extreme version will require various legal and regulatory changes to become a reality.)
I noticed that even more than other presentations I gave, people were highly engaged and animated. At the end of one session, I had a group of a dozen clients around me debating vociferously. What became clear is that everyone recognizes that current talent management approaches aren’t really working (and in fact probably aren’t really worthy of that name), and something new is needed. Crowdsourcing holds out hope, but probably isn’t the answer for all work – for example work requiring a great deal of internal contextual knowledge.
Get ready for a clustered future!
Category: Uncategorized Tags: people workforce structure
by Dave Aron | November 19, 2012 | Comments Off
I have spent the last two years researching deeply innovative business models across all industries. One of the findings was that very few companies have been deeply innovative, at least partly because they have mainly used information and technology to tune their existing business processes rather than rethink their business model.
Education is a great example – especially primary and secondary. Most schools are still operating as they were a hundred years ago – classrooms full of kids being taught by a teacher, then doing homework at night. Sal Khan, creator of Khan Academy (free, short video tutorials on maths and other subjects), has written an inspiring book called ‘One World School House’, about new educational business models, including ‘flipping education’, where kids study at night, and do ‘homework’ in class during the day – addressing the issues of not engaging in class, need to learn at different speeds, and the need for help with homework.
In his book, Khan couches much of the discussion around the need to challenge deeply held assumptions about education – for example that learning happens at school, and practice happens out of school. When we are searching for deep innovation opportunities, we need to challenge the deeply held assumptions that prevail in our industries. For example:
- The assumption that manufacturing has to happen at a factory
- The assumption that patients have to be gathered together in a hospital to achieve economies of scale. (It has always seemed a bit dodgy to me to bring all those germs together around all those sick people!)
- The assumption that we have to do human resource management for our staff. (More on that in my next blog entry.)
Technology changes are coming thick and fast and technologies like 3D printing, sensor networks, telemedicine, crowdsourcing and cloud collaboration can and will change the above assumptions.
Consider running workshops with business and IT staff to uncover assumptions about your industry, and how technology trends could challenge them.
The only slight pity and irony is that “One World School House” itself is so conventional – my Kindle version is a 259 page textual book.
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by Dave Aron | November 10, 2012 | 1 Comment
In September 2012, I authored a note entitled “Does Your Business Need a Chief Digital Officer?”. I am noticing a distinct change in attitudes over the last few months. Earlier this year, for many this was seen as a hyped, unecessary, annoying addition to the pantheon of CxO titles. At our Orlando and Barcelona symposia in the last few weeks, we predicted that 25% of companies would have a CDO by 2015, and I heard of a lot of companies recognizing the need for, trying to hire, or trying to shift their CIO to become a Chief Digital Officer. (I heard this topic less at our Tokyo symposium, and am keen to hear about the Australian and Asian situation next week at our Gold Coast symposium.)
What is a Chief Digital Officer? If we split a company into back office (running the internal operations), front office (the customer experience) and head office (deciding what businesses we are in, and our strategic posture to win in those businesses) – the CIO role has been traditionally about the digital back office (automating and informating internal processes). The CDO role fills the gap – digital front office and digital head office.
Some organizations are using the title more to mean Chief Digital MARKETING Officer – which is a very limited and limiting view of the role. The full potential of the CDO role includes using information and technology to drive value into and from the customer experience – much more than just marketing, and also a digital view on enterprise business strategy – including business extensions based on digital capabilities – such as logistics companies providing financial services to their clients based on their knowledge of their trade flows.
It is possible for the CIO to become the CDO, or there to be a separate CDO. The decision should be based on capability, capacity, need and appetite. If the CIO becomes the CDO – they must make sure they have or develop the capacity, skills and internal and external brand. If there is a separate CDO, there must be strong integration governance between the two. What is not OK is for there to be no coordinated digital leadership, and instead multiple uncoordinated digital initiatives.
The bottom line is – the digital world is moving fast (mobile, social, cloud, big data, BYOD right now; big trends on the horizon like 3D printing and the internet of things). Each public and private sector enterprise has to think through whether and where digital front office and digital head office gaps exist, and if so how to fill them.
Category: Leadership Strategy Tags:
by Dave Aron | September 17, 2012 | 3 Comments
There is a lot of noise in the IT/ digital space about leadership at the moment. Is it justified? The answer is yes.
And the reason why is that we are being dragged, kicking and screaming into a third era of information and technology in the business world.
The first era lasted for the a few decades – roughly up until the dot com crash. In the first era, the IT team were very separate and ‘other’ to the business culture, but did things that could add a lot of value to the businesses they were in. We were reaping the low hanging fruit of automation. The iconic image might be of a scientist in a lab coat, very much like the ‘Q’ character in the James Bond films. The business world’s tolerance of this ‘other’ culture rapidly dissipated with the Y2K/ dot com crash.
The second era has just ended – although many of us haven’t noticed it yet! It lasted about a decade, and was all about professionalizing, industrializing, ‘service-izing’ IT. It has added a lot of value and predictability to the use of information and technology in business, but it isn’t enough anymore.
The third era, which is just about underway, is about the pervasive use of digital technologies and related societal trends, not just to automate processes, but to innovate the back, middle, front office, and co-create business strategy. Examples of this include more sophisticated use of digital channels and communities, more information and technology in companies’ products, new ways of organizing and managing talent, and making decisions, much more sophisticated analytics, and informational business extensions – entering new markets based on informational capabilities.
In the first era, we had great technologists. In the second era, we have learned to have very capable managers. The third era requires great digital leaders, helping to shape the digital vision and digital business strategy, being the main message carrier, influence the ecosystem to play in new ways, and ignite the passion of internal and external stakeholders to contribute as the digital possibilities evolve.
My experience to date is that for some IT leaders, this is a bit frightening and overwhelming, whilst for others it is extremely exciting.
Category: Strategy Uncategorized Tags:
by Dave Aron | September 8, 2012 | Comments Off
This week at a small gathering of leading edge CIOs, a participant from the insurance industry made a striking comment when he talked about employing someone who came from the lottery industry. He said “Insurance and lotteries are very similar – one sells fear, the other sells dreams”.
This made me think about what the CIO and IT organization are selling, especially in the light of a trend noted in some recent research I have led on the growth of the “Chief Digital Officer” (CDO) role. You could argue that CIOs are traditionally selling fear, CDOs are selling dreams.
Whilst CIOs needs to be realistic and make sure of business integrity, risk management and budget management, they also need to recognize that in an increasingly digital world, information and technology don’t just automate and protect the business, they are also a key part of its growth, its future, its dreams. And dreams require different branding, different communication, different relationships.
Perhaps this is a question for CIOs and other IT leaders to ponder on – Am I selling fear or selling dreams? Do I have the right balance?
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by Dave Aron | July 12, 2011 | Comments Off
Richard Rumelt, a very well respected strategy professor, recently published a book called “Good Strategy, Bad Strategy”. Professor Rumelt has the courage to point out how bad most strategies are, and that in fact, most things called strategy are not. He peppers the text with great examples from the private and public sector, including some interesting military examples.
Whilst his book is not about IT strategy, the lessons are all very relevant for CIOs, and strongly resonate with Gartner’s suggested approach to IT strategy: clarify how the business will win and how IT will help, then ensure the detail of your IT strategy supports that strategic posture, and represents genuine strategic choice.
Category: Strategy Tags:
