Weekly Business Insights from Top Ten Business Magazines | Week 304 | Strategy & Business Model | 1

Extractive summaries and key takeaways from the articles curated from TOP TEN BUSINESS MAGAZINES to promote informed business decision-making | Week 304 | July 7-13, 2023.

The rewired enterprise: How five companies built to outcompete

By Santiago Comella-Dorda | McKinsey & Company | July 6, 2023

Listen to the Extractive Summary of the Article

For companies along their transformation journeys, promising developments remain locked away in pockets of the organization. Yes, the successes provide important capabilities and sources of value, but they fall well short of the ultimate goal: a digital-first enterprise that continuously improves and innovates to delight customers and lower costs faster than the competition.  Simply doing more won’t work to get you the full value. Getting to scale requires six shifts that establish new processes and capabilities.

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.  Secondly, rewired companies prioritize product management. 

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. Successful companies focus particularly on:  creating a talent factory and building technical skills.

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 and platforms.

From technology as a central capability to distributed engineering excellence.  To achieve this, rewired companies do the following: systematically decompose IT into microservices, use modern cloud and MLOps (machine learning operations) practices for scale, and enforce modularity standards.

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.

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, tracking performance, and making solutions easy to reuse.

2 key takeaways from the article

1. For companies along their transformation journeys, promising developments remain locked away in pockets of the organization. Yes, the successes provide important capabilities and sources of value, but they fall well short of the ultimate goal: a digital-first enterprise that continuously improves and innovates to delight customers and lower costs faster than the competition.
2. Simply doing more won’t work to get you the full value. Getting to scale requires the following six shifts that establish new processes and capabilities:  From focusing on digital initiatives to focusing on the customer, From hiring digital talent to developing digital talent everywhere, From agile teams to a product and platform operating model, From technology as a central capability to distributed engineering excellence, From centralized data and analytics to embedding them across the organization, and From a focus on short-term gains to a focus on scaling through a modern culture.

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Topics:  Strategy, Technology, Digitization