For the first time in history, technology is pervasive enough and cheap enough that everyone is using it with little or no learning curve. So how can businesses adapt and keep up? Deloitte Digital is talking Digital DNA with our resident experts.
Garth Andrus (GA) is a global leader of Digital DNA. Anh Phillips (AP) is the Digital Transformation Research lead at the Deloitte Center for Integrated Research. And Nate Paynter (NP) is a senior manager in Human Capital Digital Transformation. Let’s hear it from them!
Why don’t you explain to the folks at home what we mean when we talk about Digital DNA?
GA: Simply put, Digital DNA is how an organization is organized, operates, and behaves in digital ways. It’s made up of 23 traits like customer centricity, constant disruption, productive mobility, continuously innovating, and nimbleness.
How did you come up with it?
GA: We kept hearing talk of how organizations need Digital DNA, or digital in their DNA, but we could never get a clear definition of what exactly Digital DNA was. I originally came from an academic background, so of course I wanted to do a study to figure this out. We collected a couple hundred studies and articles about digital, and from those we identified 23 traits that define Digital DNA. We actually didn’t realize the importance of that number until an analyst on the team pointed out there are 23 chromosomal pairs in human DNA. It wasn’t marketing, just a lucky accident.
So let’s say a company isn’t digitally mature. How can it, uh, grow up?
AP: First, it’s important to realize there’s no such thing as a digitally mature company. It’s impossible to reach that final state because the world around us is changing at such a rapid pace. We prefer to say that in the best scenarios, there are companies who are digitally maturing because they are constantly identifying and iterating to continue to evolve and become more digital. Meanwhile, a lot of companies implement technology and are “doing” digital, but they haven’t fundamentally changed their organizations in ways that enable them to do things differently, to continually innovate, and to create new value-generating business models for their clients.
Gasp! So you mean being digital isn’t just about using technology?
AP: Using tech is part of it. But our research finds that organizational issues like structure, talent, leadership, and culture are absolutely critical and can hinder or enable digital initiatives. To be a digitally maturing organization, you need to adapt the way you organize, operate, and behave.
NP: We break down the journey of digital maturity into four stages: Exploring, doing, becoming, and being. Most companies get caught in between doing and becoming stages; they might have technology and are “doing” digital, but they aren’t making actual changes to their operating, customer, or business models.
Got it. So how can a company move from doing to becoming?
NP: With small, incremental changes. It doesn’t feel transformational, but that’s the power of it. Focusing on value, delivering results, learning, and adapting—it’s quite digital at heart. We work with a company to identify two to four digital traits they want to focus on, and then make small, digestible adjustments that we call minimum viable changes (MVCs). After working with one C-suite executive to implement these MVCs into his company, he said something we love: “I can see our company becoming a little more digital every day.”
GA: I sat next to a geneticist on a plane once and we talked about the concept. He told me that if you splice in too much new DNA, the DNA of the existing organism gets overwhelmed and it doesn’t work as intended. And if you don’t splice in enough, the existing DNA doesn’t change enough. It’s about experimenting and iterating to use just the right amount to get your intended results. Enough new DNA to make a difference, but not too much that it’s resisted—that’s how MVCs work.
How does Digital DNA apply to companies that are considered digital natives (companies whose core product offering is a technology platform)?
AP: Just because they were born digital doesn’t mean they can’t improve. And while they may have been built on agility, collaboration, and iterative practices, they don’t always stay that way, particularly as they grow. Organizations that have strong digital cultures are intentional about it—they actively work at it. And as these companies grow and evolve, they need to fight to keep the DNA that made them who they are so that they don’t find themselves mired in bureaucracy and traditional structures.
NP: We see digital natives struggle with precisely this issue. To help them, we do the same thing we do with more traditional companies: introduce MVCs.
So what does this look like in the real world?
GA: For example, we’re working with a Fortune 15 traditional, non-digital company that identified being intentionally collaborative as a trait they need. Our first MVC was creating a collaboration center of excellence. When new projects roll in, project managers now consult with the COE, who advises on how to set up the right team, how to run meetings, which collaboration tools to use for the specific project, how to consider different cultures involved, etc. It took less than 180 days to set up the COE, and the feedback is that it’s working fantastically well—those participating are collaborating better already.
Let’s say I’m a company who wants to work on becoming more digital. What’s my first step?
NP: You first need to understand how digital you are today. That comes from a survey given to your people on the inside—especially those who have been with the company for less than three years. These newer employees are less focused on the way things are done and bring a perspective of how they could be done differently, so they have a good gauge of how digital you are compared to other orgs. The survey also helps identify which two to four traits should be addressed first through MVCs.
In the context of today’s world, why does Digital DNA matter?
AP: A lot of people look at digital and think of technology only. But we know that digital is changing our world in more ways and changing the world of work. In a few short years, we probably won’t be using the word digital. We’ll be simply be calling it “business,” because it’s how you behave effectively in this new world—and that’s what Digital DNA is really about.
GA: It’s also important to know that DNA isn’t something that only resonates in the US. We’ve used this with businesses in more than 40 countries and found similar results regardless of culture and language, showing how universal the concept is for organizations.
We’ve been talking about infusing Digital DNA into a company’s DNA. But if you could splice anything into your own personal DNA, what would it be?
GA: I’m ambidextrous. When I golf, I drive right-handed but putt left-handed. It can get confusing sometimes. Maybe more dominance clarity in my DNA for doing certain tasks would be helpful.
AP: Probably better physical coordination! I am always amazed by people who can pick up a sport and do well their first time.
NP: It’s so tempting to infuse some form of super power, but I would have to choose any trait that reduces risk of major health issues. I guess that it in of itself is a super power.