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 / Summer 2013 / Issue 71(originally published by Booz & Company)


Don’t Reengineer. Reimagine.

Design for Three Years Out

The third principle of digitization involves taking the long view, even as you build for today. You can no longer succeed with a digital strategy based only on today’s technology and competitive environment. Nor is it enough to merely ideate about future developments. Companies must take actions now that prepare them for the disruptive opportunities and evolving platforms of the next few years. What technologies might be available then? How will customers be using digital in their lives? Where will your industry be, for example, in terms of responsive use of data, digital fabrication (parts and devices made on the fly), cloud-based interoperability, or new forms of supply chain coordination? Do you have the capabilities now to make use of those technologies in creating new customer experiences? And what new capabilities will you need once those technologies become reality?

3M Company is already answering these questions. The company—which makes a wide range of innovative products and materials, including tapes and adhesives, electronic devices, medical supplies, films and fabrics, cleaning and car-care products, and industrial components—is developing a road map of its future by building the world-class capabilities it will need over the next several years. The effort began with a focus on combining content, search optimization, and social media to capture data on consumers’ feelings about 3M products. The company then developed the analytics needed to make use of that data. 3M maintains a Facebook “do-it-yourself” page, for instance, where woodworking aficionados post photos of the cribs they build for their grandchildren or the handmade tables they sell on the Web. Contributors are motivated, in some cases, by the chance to promote their own work, accompanied by comments like, “We are staying safe with [3M’s] goggles, gloves, masks, and using lots of sandpaper.”

Based on these kinds of experiences with its early adopters, 3M is building out its e-commerce capabilities for the future. The sales and marketing departments are creating additional content. Customer service is using analytics and data to identify customer problems and solve them rapidly—for example, telling people how to recycle their Post-It notes (put them out with the office paper pickup; the recycling process removes the glue). And in general, the company is boosting innovation by ramping up collaboration—including collaboration with outsiders.

New Structures and Teams

The fourth principle recognizes that becoming digital isn’t just a matter of rearranging the lines and boxes on your org chart. It involves fostering a startup’s way of working through new structures and teams, and changing your incentives, rules, and decision rights accordingly. Just as important as these formal mechanisms are their informal counterparts—the personal networks, communities of interest, information flows, and behavioral norms—that link the people in your company who can imagine and build new digital capabilities.

In a truly digital enterprise, you will often find that new cross-functional, multidisciplinary teams need to be formed and assigned solely to conceive and build successful digital customer experiences. These teams bring together specialists in strategy, R&D, UX design, industrial design, marketing and branding, sales, and IT to work collaboratively. The diversity of talent and perspective is vital when it’s time for the team to move its digital DNA back to the main body of the company, changing the culture from the inside out.

Health insurer Aetna recently created a new business unit called Healthagen. It has operations based in San Francisco, far from the company’s headquarters in Hartford, Conn. Essentially a startup, this new group was charged with a mission: to tackle the fundamental issues of value and transparency in healthcare. The unit isn’t simply trying to address customers’ pain points. Instead, its goal is to empower consumers, improve the quality of care, and reduce overall costs. Aetna has identified digital capabilities and user experience as game changers. It is investing more than U$1 billion to acquire and build a comprehensive collection of health management and health IT solutions. Under one roof, Healthagen has assembled a multidisciplinary team of strategists, consumer insight specialists, digital product managers, user experience and user interface designers, and IT architects. It is adopting distinctive innovation methodologies that rapidly bring new ideas to life and test them with users and stakeholders.

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