The Digital Helix

Michael Gale: I think the best comment, really, is a comment from Rich Karlgaard, who is a sort of futurist at Forbes Magazine. Rich makes a great comment, that the thing that really defines the digital age is that, whereas once the esoteric was just a dream, now the esoteric is a reality. So, to put simple context on it, whereas before we used to talk about market segments, we used to talk about, "Well, we can service this type of customer," now we talk about servicing every customer in any way they want, when it wants to happen.

The idea of instant delivery, instant segmentation, instant satisfaction, is the promise, and in many cases the reality, for organizations. So we are freed up from an old binary view of the world to a much more personalized, instant view of the present.

Rachel Salaman: Now, some people listening to this might not feel like they're fully plugged into all of those opportunities. What's a way into this subject for a manager who may not feel like his or her job has anything to do with digital?

Michael Gale: I think there are two really important questions they need to ask. First of all, you have no choice, if you go home and you look at your kids, you look at your colleagues, your friends, everybody's living a highly digital lifestyle where that need for instant me, instant delivery of something, information, product, is real, so you cannot escape the reality of the digital world around you.

How you decide to deal with it and manage it is, I think, the next question that we try to answer in the book. So, from an organizational level I think you have to say to yourself, from the seven drivers we talk about in the book (which will take too long to go over here), which ones of these are really affecting the way we work. Maybe you personally play and learn in your life, because coming to that moment of realization – that this is happening, but you also have the power to manage something in this environment – is essential.

You know, 88 percent of major corporations have huge initiatives to go through digital transformation, so it would be almost bizarre if anybody didn't recognize that capacity. The challenge is that next first step, "How do I work out what's affecting our company, my business, my division, and how can I make a change?" That's really the very first step somebody should take.

Rachel Salaman: And how proactive should someone be if they're a manager, and they may know that their organization has a digital strategy, but they haven't been told what their part in it is. Should they be proactively asking or looking for how they can take part in this?

Michael Gale: 150 trillion percent, yes. This is going to affect, or is affecting, everybody's work process. So the first thing that would worry me is if every worker in the organization does not know what the digital strategy is, that digital strategy probably has a 90 percent chance of failure, because the underlying tonality of digital or digital transformation is that the esoteric becomes real quickly. That requires all the pieces to work really well.

So, if you're sitting as a manager of a group, or a manager of a very large group, you need to have the capacity to say to somebody, "Hey, what's our strategy, what do we have to do to be part of that, where do we intersect in that strategy, what things do we have to stop doing, do differently, or do new for the first time?" And I think everybody, from a career perspective, should take an active engagement with this. So I see this as a really important watershed in the way organizations function, work and support people prepared to take initiative.

Rachel Salaman: Now your book is called "The Digital Helix," and in it you say that thriving with digital transformation is about discovering, building, and even recreating the best DNA version of your organization. So why use that DNA metaphor?

Michael Gale: I think for three reasons. Look, put technology aside, you know, put market share aside, put history aside, and those are the sort of traditional MBA consulting elements; now, have you been around a long time, do you own a lot of market share, do you make great things.

What digital does is it completely disrupts, almost like the Death Star, all normality around you, whether or not it's Amazon buying Whole Foods or it's Uber, you know, shifting the whole taxi industry, or anything, even like 3D manufacturing, if you kind of accept that there's this fundamental underlying shift in the way that business happens, it would be as naive as saying, "Well, you know, these machines in Manchester..." or "These big factories with smoke stacks, nah, they're not going to take over from agriculture." Or, "No, cars won't take over from horses."

So we had to sort of find a metaphor that said, "Look, this is a fundamental shift, a deep level shift in the way people do business, they run governments, they have organizations." And the thing we found in the research was that everything is actually interconnected, how your leaders think about the world. If they don't tell you about strategy you won't succeed.

How you collaborate with other functions to make things esoteric and real for a customer and employees requires real time, cross-functional collaboration. Everything looked as if it was three-dimensionally connected, plus, you know, next year is the 50th anniversary of Watson's book on the Helix, and we thought, "Well look, organizations do have a DNA, the way they work, the way they question, we need to either find a DNA insight that's very digital or help organizations reengineer to survive and prospect, in an age, in 10 years' time, where everything will be digital first."

Rachel Salaman: Well you've touched on this a little bit, Michael, but in your experience how aware are most business leaders of the potential of the digital revolution, and what that might mean for their organizations?

Michael Gale: I don't believe that most organizations are very aware. We have empirical evidence for that and tens of thousands of hours of interviews and work we did. So I'll give you the empirical: of the 88 percent of organizations going through this, less than one in four can actually define what digital transformation means to them.

So that to me is, "We're going to do it, we're not quite sure what it is, we can't really define it." And I think if you can't define it, what it means to you, it's extremely difficult to really understand the upside, and it's probably more because you're fearful about what's happening around you.

That's why, at best, only one in six organizations could actually say to us, empirically, "Yep, it's working, we're seeing shifts in OPEX or CapEx or SGNA," all the sort of classical economic measures, because they just couldn't work out what was working. It's sort of like they know the world isn't flat and binary any more and they're heading over the horizon and they don't really have a map.

I think that's part of the reason why we wrote the book, was to try and help them, having a map for doing this right, so that people were collaborative, so that the manager and her group aren't going, "I don't know what the strategy is" but is aware of the strategy and understands what her role is. It's somewhat uncoordinated, this process, and it feels like a sudden march towards a new horizon without a really good map to do it.

Rachel Salaman: And I suppose it's worth saying at this point that, when we talk about digital, we're talking about everything from digital platforms where products are sold to software on people's computers – everything.

Michael Gale: It's everything. It's how you hire, it's how you train, it's how you ask questions in meetings. You know, "We've always done it this way," it can no longer be a common question, it's got to be, "Look, if our employees or our customers need to do this in the real world, what do we need to do differently to make those interactions easier, more efficient, and frankly better in quality?"

Rachel Salaman: Now you mentioned earlier that your book is based around seven components of the Digital Helix. Let's talk about those in a bit more detail now. The first of these is "executives as Digital Helix explorers." So what does that involve?

Michael Gale: I think traditionally executives tend to mandate, you get an external consultant in, they've had a lovely report, and you say, "Right, we've decided to do X, Y or Z." The problem is, the world is moving so fast you can't mandate, you have to roll your sleeves up and you have to really do things very differently; you have got to be an active participant in this revolution, you can't mandate change, you can't stand on a big stage and say, "We're going to go digital and everybody's going to do this." You need to be digital.

So as the leader in any organizational size – one employee, 100 employees, 1,000 employees, 100,000 employees – you must be able to spend time to understand how your employees and how your customers are working in a digital world. You've got to find some projects you can personally engage in – not sit back from, but personally engage in.

We use a visual in the book of a telescope and a microscope. You've got to be able to have two levels of perspective on a day-to-day basis, because if you're not touching and helping with these processes and systematic changes on a day-to-day basis you're just sort of waving around you. And this is a role, the sleeves-up environment, it's no longer a "sit in a nice warm office with six assistants," you have to really get down on the floors and you really have to do the work.

Rachel Salaman: So what skills do executives need to master to do that effectively?

Michael Gale: So I think there are actually two very important mindset skills that are vital in this. You've got to get comfortable getting uncomfortable, and that's often not the way that executives function, because we can't predict the future, we don't have a sort of "Minority Report" wooden ball that talks about the future. But, you absolutely have to be able to be prepared to be experimental with purpose, learn from mistakes, and actually really understand your own sort of mindset skills, so what does it take for you to be a high performing individual in a changing world?

The things that have got executives to where they are now are probably not the things that will sustain them in those roles in a transforming world. It's sort of like being Christopher Columbus &ndash yes, you are the very first person to discover America from the West, theoretically, but that doesn't mean you're going to be the best colonial manager or the best governor or the best explorer going in. Executives have to realize that the world that they're managing going forward will be ever so different than the world they've managed in the last five to 10 years, maybe even the last two or three.

Rachel Salaman: So what tools can help executives skill up in that regard?

Michael Gale: So one of the chapters we put into the book, which is really on high performance mindset, was a set of interviews that we did with Pete Carroll, who's a highly successful, very successful head coach of an NFL football team, and a gentleman called Dr. Michael Gervais, who is one of the sort of preeminent, high performance sports psychologists in the world, because as we went through these seven components we were going, "Yes, all these seven components are logical markers for successful organizations," whether or not they were USAA, South West Airlines, even government agencies like the GSA.

But there was a secret sort of componentry, almost a sub-nuclear level, that worked, and these were these high performance mindset skills, because if you're asking people to view the world differently, you're asking people to behave differently, you're asking people to think differently about strategy and actions, you have to train them in a new set of mindset skills.

I think understanding how to get those sort of new sets of mindset skills in everybody's hand, and frankly head, and get them in practice, will allow organizations to be more successful. You can't keep doing the same things and expect different results, so you have to do different things or a different approach in this model to be more successful.

Rachel Salaman: So where should all this digital transformation work sit in terms of prioritization, given how busy most executives are?

Michael Gale: Yeah, so we actually asked that question in a lot of the primary research we did, so it's a really elegant statement. We found that about the average amount of time an executive was spending on digital transformation was about 20 hours a week.

Rachel Salaman: That's quite a lot.

Michael Gale: Yeah, it was a lot. Now the median, because there's a very high level, were saying, "I'm spending maybe a day and a half, two days a week on it," because it is such a dramatic driver. The problem has been they keep doing the same things they've done before, expecting different results, or they digitally wrap their business, "Oh let's make things digital," versus actually putting in an embedded thing.

I think there's a terrible amount of wasted effort here. It's almost like watching kids learning to read and write, there's incredible inefficiency in the process which we don't have. So we hope the book helps people shortcut, frankly, so that, yes, if you're spending 20 hours or whatever the number would be, you're truly investing the right amount of energy and style in those hours, you're not just trying to do the same things but just try and do more of them.

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Rachel Salaman: Well, returning to the seven components of the Digital Helix from your book, the second one is "themes and streams." So could you explain that?

Michael Gale: Yeah. I think information is the essence of the digital age, so it's sort of like saying to somebody, "You used to fish on the stream, very small stream, and you'd have to find things, the fish were stuck under rocks or would be very small or would be very coy, wouldn't sort of nip onto the hook."

Well it's very different in the digital age. We are swarming, maybe drowning with information, so it's less often a case of finding it than filtering it. So one of the things we've said is that fundamentally, information has to be thought about in a different way. So whereas before it's like, "We've got to accumulate it," now it's a case of, "We have to filter it." So if we think about ideas your organization may have, we call those themes, and information coming to you in streams is like a matrix, themes could be coming down, streams could be going across.

You've got to be very sensitive to pick up signals, because very small signals, in fact very different signals, could radically change the way you think about something, and I think what we've seen in many industries, pharma, technology, consumer, is that consumers are behaving now with very small, precise actions, but unless you have these theme and stream view of the world, constantly looking for change, you'll struggle.

USAA, which I think is a remarkable insurance company in the U.S., doesn't just have dashboards, it will change those dashboards every few days if they think they've found something new that can help people make a better decision today and tomorrow. So we talk about shifts in language, you know, moving away from KPIs to insights that matter, because in a world of enormous information it's about finding the small things that actually make a really big difference.

Rachel Salaman: Then comes the idea that customers have "experiential portfolios." That's the phrase you use, but what do you actually mean by that and how does it affect leaders' digital strategies?

Michael Gale: Well let's take this personally. So let's imagine you're on your way to work today, think of all the things you've experienced on the way into work today, and it may have been a fairly common route that you took, the ads you saw, the things you were looking for on your cell phone, the messages you saw on your social, the news, the way you interact with products.

You know, we used to talk a lot about people having a journey to buy something, well there's so much noise and clutter in front of you, and there's so much value in front of you, that people really think about an experience with an organization in lots and lots of dimensions, because those dimensions are completely transparent. You may have watched somebody use a product next to you, you may have seen a friend's review of a product online, you may have searched for something and an ad popped up, you may have had a bad interaction on the website, or you may have called a rep and the rep was great but the information they sent you to was bad.

This portfolio, this sort of magnitude of multiple sets of pieces, really affects people's perspectives more than ever before, because every experience is almost instantly available. So very small things can make really big differences when you think about a portfolio, some of which a brand can't control and some of which a brand can.

We keep trying to say to the government agencies, and we've said it to commercial businesses, "Understand that whole portfolio of experiences of your customer and you'll really get to understand how small things can make a really big difference."

Rachel Salaman: So does that link back to what you were saying about the insurance company's dashboard?

Michael Gale: Yes, because they understand in very specific ways, that listening isn't just a skill. I mean, every organization we talked to took us to their listening room, "Yes, we have a listening room with 26 monitors and 15 people and huge amounts of light." It's not about the listening, it's about "Did you actually hear the insight of what was being said and where it's been sent from?"

USAA is very, very sensitive to this constant change in what those metrics are. It's designed to say, "Look, we know that certain insights, certain experiences, maybe really important for this small period of time, we're not going to track them for six months, we don't track them for six weeks, maybe we just track them for six hours," so having the flexibility to respond to small things that matter is really important.

Rachel Salaman: Is it hard to persuade leaders to put money into not just listening but acting on what is being heard?

Michael Gale: It's brutal, and it's brutal for three reasons. You know, it's human nature, we always as a species want to do the same thing and hope to get different results, it's the nature of rhythmic repetition. To some extent, organizations that really understand this may well have been damaged or hurt by other competitors in their sectors, so there needs to be a trigger, a spark, a moment, when an organization goes, "We need to do this, we're being attacked here or losing an opportunity there." I think it's very difficult to sit in a room and say, "Look, you've not been attacked yet, you've not seen massive changes yet, just keep going."

So many leaders try and put a steamship engine in a sailing ship frame; in other words, they've got a sailing ship right now, they're trying to take a steam engine, stick it inside and say, "Look, it's a steam ship." It just isn't, that's digital wrapping. So I think it is tough, because for years and years we've talked about "Just keep buying technology, it will solve it." Technology's a really important part of this, but you've got to invest in your new generation of workers and you've got to invest in your current generation, that they understand how to handle this sensitivity and learning, it's really vital.

So I think it is tough for organizations, but if you look at the history of the industrial revolutions, many players get left behind because they aren't prepared to deal with the need to adapt. Everybody has to adapt in a world where the consumer is king, you know, consumers can get what they want, when they want, how they want it.

If you can't have an organization that can deliver in that way and understand the opportunity or challenge, at some point you lose relevance in that world going forward. And it'll happen quicker than you think; much like putting a steam engine in a sailing ship worked for 20 years, at some point, when people built huge steam ships, there's no way that sailing ships with steam engines in them could ever function efficiently ever again.

Rachel Salaman: Another component of the Digital Helix is "marketing and communications as flow," and here in the book you talk about four key behaviors that drive success. Could you summarize those for us now and their implications for managers?

Michael Gale: Yes, and I'll do it literally in one statement. I think marketing, demand generation, channel management, partner management and communications, which is very much the softer messaging, the written and even some simple visual delivery, have often functioned in two parts of the building, because they're not customer centric, they're internal centric.

We have a marketing spend, we have a communication spend. Because customers have portfolios you've really got to connect these two pieces together, because the one thing we learned with all the research for decades is that customers don't see words or pictures or actions as being different, they're part of one complete set of customer experiences. So you have to plan in one flow, sort of like two rivers intersecting, around the customer's set of experiences, so that there's a consistent and interconnected feel with these things.

People don't read PR releases, people read the stories from those or the pieces they pick up, so having those two things interconnected can make marketing probably three to four times more valuable than just trying to run them separately but never planning in one flow, in one process that's ongoing.

Rachel Salaman: So could you give an example of that?

Michael Gale: Well appreciate it as a customer, so let's imagine you are looking to purchase a washing machine, your washing machine for the house. You may go online, Google or Bing or whatever search engine you use, you may also go down to your local electronics reseller or your white goods product sales environment, pick up a brochure, talk to a rep.

Well the reality is, if the language used by the rep, if the language in the brochure, if the language on the website, and even on Google reviews, are not the same, you're going to say, "Ooh, something's wrong here, I don't feel that consistency in what these guys are saying about it."

Well some of that language is going to be customer reviews, you can't control that, so much of that language, from the way you interact with the sales person to the way you read the brochure to where you go to the website, should feel, should look, should sound the same, because people want consistency in a world of change. It's often the number one place for a brand to be, it's "How can I give a consistent feel and touch in everything that I do?"

Rachel Salaman: Now the fifth component of the Digital Helix is related, and that's "sales are connected moments." What are the most significant ways that digital is changing the sales experience?

Michael Gale: So there's two things we learned, one from a previous business that we started in 2001, and it really has been reinforced when watching and planning with clients now. We used to talk a lot about customer journeys, "I start here, then I spend this long to do that, then I go off and do this, then I do that, then it comes back to me over this period," and there's sort of like a story arc to it.

Well I think what's actually happening is what used to be an epic poem has become a haiku. People are making quicker and quicker decisions about purchasing because the information they have, the nature of the way their lives function, means speed and available information really matters. So when we think about sales moments, whether or not it's somebody rewriting a contract on an annual basis, somebody having a service and support moment, someone deciding, "Well I need this extra bit versus that extra bit." We've got to think about these as moments that connect versus some enormous arc or Tennyson, Alfred Lord Tennyson poem that people go through.

People make much faster decisions than we've ever made before, so things have become quicker and quicker. That's the nature of the digital revolution, that means the ways people think about purchasing has got faster and faster and faster. We don't think about a car purchase for five years, we think about that car purchase probably at the end of a lease or when a major mistake happens on the car and it breaks down, or if there's a major piece of repair work we have to do, or our neighbor gets a car that we quite like. These things happen far faster than "Yes, you replace your car every four years and eight months."

Rachel Salaman: So, looking at the sixth component now, which is "everyone together all the time," how does digital transform the way teams work?

Michael Gale: I think we put these together because we felt there was a connectedness in them. I think teams work together because they're going to have to, at some level, be agile, and that's a tough word because it sounds very cool, but it really says, "You're going to have to get together for problem solving" more than "I've worked with somebody for nine months or 12 months, who may be involved in a moment, how do we solve this moment?"

So teams have to be more collaborative, more sort of sharing, and I think adaptive learning is a key part of that, because the skills you may bring to Team A may be a little different than the skills you bring to Team B, but I think that very fluid, agile approach is key.

There's a great chapter from Jon Iwata, who's the head of marketing at IBM, so he's very senior, and he talks about how they're producing these agile teams that get together for 90 days and then move on to another project, get together for 90 days, move on to another project, and what they've realized is that constant regeneration, that constant sense of collaboration, that constant sense of adaptive learning, is where this is going to go. You may be asked to develop skills you haven't had before, but that's what the new world will look like because that's what digital is forcing us into.

Rachel Salaman: You call the final component of the Digital Helix "in the moment and one step ahead always." Could you explain what you mean by that, perhaps with an example, and also share some tips on doing it well?

Michael Gale: So this is actually, I think, one of the most interesting points of the book, because it really eats away at a classical construct about strategy. Strategy is always seen as something that heads over the horizon: "Yeah, we're going to set the course, you know, 150 miles out, the horizon's at 12 miles." The classic challenge of that is the precepts that drive success, based on a consistency of performance and a lack of historical change that happens, so you could set a course, you know you'll be fine. Well the real world right now is not that predictable, all the consequences and connections are radically different.

So we keep saying to people, "Stop planning three, four, five years out, have a vision, alright, but then start planning in blocks of months and quarters, because you're going to have to be able to be reactive to situations, you can't just set a course and hope that the winds will go with you." And I think that, classically, just be one step ahead constantly means that strategy has to be reviewed now on an ongoing basis. You can't just say, "We have an annual review," you have to say, "Were those assumptions correct? How do we adjust them?" and that's a constant feeling of like sailing versus just sort of heading out in one direction.

Rachel Salaman: So what issues and challenges do you expect to see emerging in the next five to 10 years, and how can leaders best prepare for them?

Michael Gale: Well there are two major challenges that could be really scary, and we don't have an answer but we have to be honest about them. I think it is very likely that organizations will need to hire less and less people to do what you may have described as "non-value-added jobs," and I think there is a threat here of automation by promise or by action, really getting rid of vast arrays of jobs in industries.

You can see it in certain office functions, too, and I think automation could literally wipe out 20-30 percent of mechanical jobs in the white collar space too in the next five to 10 years. That has huge implications, politically and socially. So I think as leaders of organizations we need to recognize this and work out how we help our employees to be better trained, to be more adaptive, to have more skills, not just because it's for them as individuals but, frankly, from a selfish perspective, that the organization needs qualified, capable people to handle itself from one generation to the next.

I think the second thing is that if you don't start to aggressively transform digitally, and you really struggle to adapt these variables, you're going to find it very difficult to not be a binary dodo in a very digital world, because I think the speed of change is exponential, and what looks like a small threat in the windscreen in front of you can become a huge threat very quickly as you hurtle towards it.

I think that something leaders have got to be more conscious about, is what's going to happen in the future, what do they need to do differently, how do they need to adapt, because there really isn't a choice. It's going to happen to you either because other segments jump across you or, frankly, competitors just get really, really good at doing things that you can't. In other words, they have a great digital transformation index performance and they just start being half a lap ahead of you, a lap ahead of you, two laps ahead of you, three laps ahead of you, and you sort of die.

I'm an optimist but I'm concerned about the future of companies if they can't find this pathway to transformation soon. They'll just find themselves too far behind competitors, and as you know, customers are not that loyal any more. If the experience doesn't work they'll move.

Rachel Salaman: Michael Gale, thanks very much for joining us today.

Michael Gale: It's been fun, thank you for having me here.

The name of Michael's book again is The Digital Helix: Transforming Your Organization's DNA to Thrive in the Digital Age. I'll be back in a few weeks with another Expert Interview. Until then, goodbye.