As the consumerization of IT, the Internet of Things (IoT), the digital economy, and disruptive technologies continue to change how companies compete, your C-suite colleagues are likely inundating you with questions about the shifting landscape and how companies today can create unique customer experiences. They're looking to you for advice on how to make the use of mobile devices, social media, cloud, and other technologies part of the company's business strategy, not just its IT strategy. They are coming to you, the CIO, to help them understand how all these technologies work and how to incorporate them into a business strategy that focuses on improving customer value.
One approach gaining traction is "Digital Halo," a term coined by Steve Bandrowczak, senior vice president of global business services and business process services at Hewlett-Packard. The concept, centered on how to incorporate disruptive technologies into an enterprise strategy, is geared toward helping CIOs and business executives create unique customer experiences and drive competitive advantage.
In a recent video interview on leadership, I had the opportunity to discuss Digital Halo with Bandrowczak, addressing four key questions: What is Digital Halo? Why is it important? What are some examples of companies employing a Digital Halo strategy? What advice would you give C-suite executives on implementing a Digital Halo strategy?
Weinzimer: Prior to your current role at HP, you held senior vice president and CIO roles at Nortel, Lenovo, DHL and Avnet. You've also been responsible for sales as well as other operational business units. I mention this because you have a broad business, financial, and technical background that perfectly positions you to understand the complexity of emerging technologies and the opportunities companies have to provide new and innovative value to their customers. You've been talking a lot about Digital Halo as a strategy companies need to employ. Help us understand more about it.
Bandrowczak: It is the ability to look at business differently than ever before in a "halo" of customer experiences driven by digital technology. Today, CXOs have to look at business models differently. They have to look at the entire ecosystem and how their company provides unique customer experiences.
If I look at today's consumer world, the Digital Halo around you, I know your presence, locations, and wants and needs. I know your preferences based upon your calendar. I know the movies and videos you like to watch. I know your political affiliation. I know when you arrived at the airport. I can provide directions from your current location to a Starbucks in Manhattan. I can help you find a taxi using Uber. Think of all the innovative opportunities I have to create unique products and services for you. The Digital Halo strategy is a unique opportunity for companies to provide new and innovative customer experiences that result in a competitive edge in the marketplace.
Why is it important for companies to embrace the Digital Halo strategy?
The simple answer is because the marketplace is changing, and I guarantee that if you don't embrace Digital Halo as a strategy, your competitor is thinking about it or has already included it in their business strategy. The more complete answer is that as company leaders, we have to start thinking differently.
It wasn't that many years ago when everyone focused on reducing costs through re-engineering business processes, outsourcing, and, unfortunately, headcount reduction. It worked for a while, but now the marketplace has changed. The consumerization of IT creates digital opportunities to use disruptive technologies that change how companies compete.
We have to change how we look at the traditional business model. Companies need to embrace the digital world and create a culture in the organization that incorporates technology as an enabler. The benefit will be to create unique customer value opportunities in the form of new products and services where the experience is unmatched by any other company. This is why I use the term Digital Halo.
What are some examples of companies that employ a Digital Halo strategy?
The banking industry is a good example. Bank of America, Capital One, Chase, Citi, and Wells Fargo recognize they can attract customers and provide new levels of service using Apple Pay. GM and other companies are now using data analytics services from companies like Verisk Analytics to help them reduce risk by preventing automobile accidents, forecasting weather disruptions, and improving healthcare outcomes. As CXOs, we have to start thinking about how we can leverage these digital disrupters around the digital halo.
What advice would you give CIOs and their CCO colleagues to help them implement a Digital Halo strategy?
An organization that incorporates Digital Halos as a strategy needs to develop three unique competencies.
First, it needs to create digital awareness across the entire organization, starting with the CEO and the executive team. This involves understanding how disruptive technologies change the way we shop, interact, and behave as consumers. CIOs can facilitate this by sponsoring a Digital Halo "symposium" for the executive team, where thought leaders with real world experience share the challenges and opportunities to leverage disruptive technologies in innovative ways.
Second, organizations must identify digital opportunities where new customer value is created. This involves personnel across the organization understanding the entire enterprise value chain, from supplier to customer, the current intersects of customer value, and where new customer value can be created.
The third leg of the stool, and perhaps one of the most important, is organizing Digital Halo innovation teams. This is where personnel across the entire enterprise, regardless of role, are re-skilled and empowered to be innovative and contribute, with their team members, to develop customer value in new and unprecedented ways.
Personnel today have to think differently. The marketplace has changed, industries have changed, and buying habits have changed. I believe that you are in big trouble if the people that know the industry really well are setting a target for your future. So now is the time to think more broadly across the digital halo in your company and leverage disruptive technologies to create new value for your customers.
Summary of the Digital Halo strategy
Bandrowczak is definitely onto something. Think about FedEx. From its inception, Fred Smith, founder and CEO, always believed that information about the package is as important as the package itself. This philosophy paid off handsomely: FedEx revenues hit a record $46 billion in 2014. The "Purple Promise" culture embodied by FedEx employees centers on the company's promise to "make every FedEx experience outstanding." It does this by developing disruptive technologies that provide unique value to all its customers. (You can read more about FedEx and its “Purple Promise” culture in my book, The Strategic CIO: Changing the Dynamics of the Business Enterprise.)
As outlined in the interview above, such success requires digital awareness across the entire organization, the ability to identify digital opportunities across the entire value chain, and finally, the formation of Digital Halo innovation teams. The Digital Halo strategy is a must for every CIO and C-suite executive. Embrace it or watch your competitor pass you by in a heartbeat.
Do you have any examples of companies that are finding success using the Digital Halo strategy? I'd love to hear from you.
You can learn more from Steve Bandrowczak by watching my interview below.
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