10 Things The CEO Can Do To Drive Digital

Forrester held its European Business Technology Forum in London this week -- a convocation of CIOs, Enterprise Architects, Infrastructure and Operations Professionals, Security and Risk Professionals, and Sourcing and Vendor Management Professionals. Lots of great connections were made in London, as per the pic on the left. On Monday night I hosted a working dinner for 20 executives -- a very lively group from BASF, Tetra Pak, Unilever, KLM, Bayer, the WTO, and other large European companies. What's very much on the minds of these BT execs is how to position their companies to be more digital. And when they use the term "digital" they mean, "Using technology to win customers." 

So over dinner we worked on a simple question: "What are the top 10 things a CEO should do to ensure that his or her company can successfully become digital?" Here's the best thinking that the group could muster after much good food, wine, humor, and fun. I have built in some links to relevant Forrester thinking...

  1. Clearly define who owns digital. Clean up the organizational confusion
  2. Create the business case for digital. Show how it increases revenue or increases profit (or both).
  3. If you can't understand the new world of digital, fire yourself.
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Apple's Folding Future

Ever wonder what's going to happen next in smartphones? After the conservative iPhone 5 and the relentless and surprising onslaught of Samsung, it's clear that Apple's next move in the space will have to be revolutionary. Ennui has seeped into the minds of some Apple faithful as they have become bored with their phones, and envious with what's happening over the fence in Android's backyard. The iPhone 6 (not due for another 15 months) will be a signal moment for Tim Cook and team -- it must astound and amaze, all without you-know-who leading the charge. This will either be a first step toward Sonyland or a breathtaking victory for the new regime. There will be no room for the careful incrementalism of the 5.

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The CEO And The Salesforce

In 2011 I asked 12 of the top tech CEOs if their salesforces were getting their companies to their strategic goals. The CEOs had scathing feedback -- their salesforces were behind the curve, low IQ, lacking the confidence to call at a high level, unsystematic, and stuck in low growth. It wasn't pretty. At Davos this year I surveyed 15 CEOs across 10 industries -- I wanted to know what they were personally doing to turn this mess around.  Yesterday I spoke at Forrester's Forum for Sales Enablement Professionals (persona to the left) in Phoenix and I presented the results:

The CEOs are very engaged in sales. Their activities include:
 
Selling -- "1/3rd of my time." "I meet with 1,000 customers a year."
Measuring -- "I build metrics and hold the salesforce to them."
Visioning -- "I spend a lot of time broadcasting the strategy and vision to the salespeople." "I preach the vision through my blog and at company meetings."
People -- Hiring, training, awarding, compensating.
 
That's the good news. The bad news is that CEO activity is frenetic, unplanned, and unsynchronized. In short, the CEOs approached selling activities with the same disorganization they had observed in their salesforces. Enter the Sales Enablement Professionals. These executives are building programs to increase the productivity of sales at companies like Cisco and HP.
 
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Davos 2013

I have arrived home from the multi-layered onion that is Davos, aka The World Economic Forum. Here's what I learned from the sessions, hallway conversations, head of state speeches, late dinners, early-morning breakfasts, and serendipitous encounters. 
 
Optimism about the economy was running hot -- especially when it came to the U.S. Budding energy independence and a recovering housing market are seen as big drivers for the American economy -- and its turnaround will pull the world economy out of its ditch. Or at least, that's how the story goes...
 
I was at a dinner with Steven Levitt, the author of Freakonomics and his follow-on book, Super Freakonomics. He works with large companies to help them gather data on their businesses and then make rational, economics-based decisions -- how to improve cars or create the perfect fast-food menus. There's only one problem -- the execs refuse to believe the data. Big Data may have arrived, but the age of Big Gut persists.
 
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The Mobile War

CEOs should be aware of an approaching tech war — because its outcome is going to change their customers. 

As the Web becomes the AM radio of digital, the mobile App Internet will rise. This market will be dominated by two or three ecosystems — semi-closed worlds built on a closely fitting set of apps, phones, tablets, computers, operating systems, and partners. An ecosystem owner will possess extraordinary market power — able to dictate terms to content providers, customers, and application developers. It doesn't matter what you sell — insurance, pills, cars, energy, bonds — you'll be reaching many of your customers through these ecosystems in the future.

Who wins? Apple leads — many already happily live in the iOS ecosystem. While the company's footprint evolved haphazardly (whoever thought iTunes would become a trillion dollar commerce hub?), Apple's current level of integration makes it the gold standard.

Google is busily copying the Apple playbook with the Android ecosystem. That's why Google bought Motorola.

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Enterprise Architects For Dummies (CEOs)

Do you want your strategies to succeed? You'll need the gentleman on the left.

He designs your business. As Dave Baker of PwC notes, "A business without a design is one that is likely to be overly complex, expensive, inefficient and unaligned." Or as Raja Musunuru, from Gaylord Entertainment Company, says, "It's the difference between the roads in Boston and the roads in Toronto."

Who is this designer? He's an obscure executive called an Enterprise Architect (EA) and he works for your CIO. The role has gained traction over the last 10 years -- if he's not in your employ, challenge your CIO to hire him. Because you don't want your strategies following spaghetti roads -- you want them moving through your company on logical, straight highways...

Why does he work for the CIO? Because the roads in your company are paved with technology -- so the best way to ensure that they are straight is to build and control the tech. There are two other reasons:  

1) EAs bring agility. You know this cliche: Markets change fast, your business has to keep up. If you've got frozen technology, your company won't pace with your customers. A good EA will design the business and the tech for quick adaptation.
 
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Interactive Marketers For Dummies (CEOs)

The person to the left is your Interactive Marketer. Never heard of her? She works for your Chief Marketing Officer -- here's what she does for you and your company...

1) She knows how to reach your next big market -- the Always Addressable Customer.

One in three US adults is always addressable -- meaning they own and use at least three connected devices, access the Internet multiple times daily, and go online from at least three physical locations. Nearly two in three Generation Y and Xers are always addressable. Your Interactive Marketer intimately tracks this customer and the multiple channels they use. Most importantly, she is continually plotting ways to sell more product to this emerging customer. Joyce Ercolino, the Interactive Marketer at CSL Behring, eloquently puts it this way: "We are the front door of the company. That door has to be beautiful, alluring, and open 24/7." 

2) She can help you innovate your way out of marketing irrelevance.

Forrester’s research shows that Interactive Marketers are true innovators. Consumers are bombarded with thousands of marketing messages daily, and companies work to ensure that their interactions with customers rise above the noise to provide relevance and value. As marketing budgets continue to skew digital, the Interactive Marketer provides the agility, technical acumen, and insight into digital customers that can ultimately drive company market share and revenue growth.

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Apple = Sony

Apple will decline in the post Steve Jobs era. Here's why.

Sociologist Max Weber created a typology of organizations in his 1947 book The Theory of Social and Economic Organization. He described three categories: 1) Legal/bureaucratic (think IBM or the U.S. government), 2) Traditional (e.g., the Catholic Church) and 3) Charismatic (run by special, magical individuals).

Charismatic organizations are headed by people with the "gift of grace" (charisma from the Greek). "He is set apart from ordinary men and treated as endowed with supernatural, superhuman, or at least specifically exceptional powers or qualities." Followers and disciples have absolute trust in the leader, fed by that leader's access to nearly magical powers. "Charismatic authority repudiates the past, and is in this sense a specifically revolutionary force."

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Facebook Bought Instagram To Bolster Its App Internet Ecosystem

Facebook bought the no-revenue, 12-employee, 15-month-old Instagram for $1B yesterday. While on the surface this may appear to be a low-IQ, or perhaps no-IQ acquisition, there is a compelling reason for Facebook to own the photosocial site. 

The App Internet is approaching -- an architecture of powerful applications resident on phones, tablets, PCs, and other devices which seamlessly link to resources in the cloud. iOS and Android applications are primitive forerunners of this world. Over time this approach will become dominant. The Web will become the AM radio of digital.

There are three ecosystems competing for domination of the emerging App Internet market -- Apple (with iOS), Google (with Android), and Amazon (with Fire). Microsoft is a potential fourth player, depending on the quality of Windows 8.

App Internet poses mortal danger for any player that remains too Web-centric. It will enable companies to directly link with their customers -- check out this Forrester report:  Mobile Is The New Face Of Engagement. Despite its good iOS and Android apps, Facebook remains highly Web-focused and has three risks:

1) That a newcomer will build a richer, faster, easier-to-use, more engaging post social network using App Internet.

2) Facebook won't have the skills to play in App Internet.

3) The Apple, Google, Amazon, (and potentially Microsoft) ecosystems become too powerful, blocking Facebook's growth and presence.

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14 Things I Learned At Davos 2012

This was my eleventh trip to the World Economic Forum in Davos, Switzerland. My posts from the last few years can be found here:  2011, 2010. This year felt more subdued and fearful than the last few -- a pall cast by the continually roiling European debt crisis. While caution emanated from the economy, hope and positive vibes pulsed out of technology. Most of the under 30 and under 40 types at Davos have recently launched tech companies -- their energy and natural lean to the future kept the aging plutocrats on their toes. It's obvious that the digital economy approaches -- an economy in which no company, regardless of whether it sells tires, insurance, or machine tools will be able to expand market share and profit without continually thinking, "Digital first."
 
Aside from that lesson, here are 14 other things I learned...
 
1) Mick Jagger is short and appears to be entering his 12th decade. But he's still a great dancer.
 
2) 50% of the people in Middle East are under the age of 25. Demographics continues to drive political destiny. The Arab Spring will not be restricted to one season. A decade of turmoil lies ahead, caused by too many young people and not enough jobs.
 
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