The book is structured to be readable from cover to cover, yet each chapter is also self-contained. As a by-product, this necessitates a bit of repetition. The book provides an introduction to some key technologies for those who are more business oriented, and an introduction to some key business strategy concepts for those who are more technology oriented.
The first few chapters provide an overview of the key insights in the book, background on Treacy and Wiersema's value disciplines framework and related strategy models, a more detailed overview of the digital disciplines, and an overview of the five key technologies – cloud, data, social, networks, and things – which, together, are the enabling platform for this new wave of competitive strategies.
Following the introductory and overview matter, there are four main sections, one to address each of the four digital disciplines: information excellence, solution leadership, collective intimacy, and accelerated innovation. Each section has three chapters: an introduction or refresher on essential background ideas such as Porter's Five Forces model or the elements of innovation, the key themes and trends defining the discipline, and a specific case study. Case studies for Burberry, Nike, Netflix, Procter & Gamble, and General Electric provide real examples of how companies are applying the disciplines.
Because successful execution and customer adoption happen largely through people, two chapters focus on human behavior and gamification; one addresses general principles, the other provides a case study on Opower, a company that is heavily leveraging principles of human motivation in conjunction with information technology to simultaneously achieve customer, business, and societal objectives.
Finally, as with any initiative, there can be challenges and caveats in successful implementation. These range from strategic alignment and project management to concerns over privacy and security.
Technology marches forward. Twitter, Facebook, Instagram, WhatsApp, Snapchat, iPads, iPhones, and many of the other elements of the modern digital age didn't exist a few years ago, and change is speeding up, not slowing down. The last chapter addresses technologies on the horizon, and offers thoughts on how to apply the book's insights.
I have attempted to capture the intent of what Treacy and Wiersema eloquently and insightfully articulated, but it's hard to interpret one's own thoughts two decades later, much less someone else's. Any errors or misinterpretations are, of course, my fault.
It is a standing curse on books like these that companies that are held up as paragons can succumb to market turbulence, which has done nothing but increase, in no small part due to information technologies. In fact, during the time it took to write this book, the companies highlighted have adjusted strategies, divested brands, made acquisitions, discontinued products and initiatives, and faced new global competitors. However, the case studies represent a point-in-time snapshot of the issues, approaches, and successes of real companies facing turbulent markets, applying the strategies herein.
A number of books covering strategy and information technology oriented toward a leadership audience provide principles and detail themes such as empowerment and transparency. I'm sure these are well reasoned, but they don't seem to provide clear direction to leaders in industries facing increasing competition and the threat of digital disruption. It's my hope that the insights in the following pages can provide you with a framework with which to pursue a focused digital strategy and attain market leadership in your industry.
Acknowledgments
The most important acknowledgment is surely to Michael Treacy and Fred Wiersema, who created a clear yet powerful framework for attaining competitive advantage while driving customer value. Without their original and compelling insights, this book wouldn't exist.
The next major acknowledgment is to all of the global innovators at companies large and small, old and new, who, in leading their organizations, have created such a rich set of case studies from which I could elicit points to illustrate and expand my thesis. As detailed in the book, this includes CEOs and key executives such as Angela Ahrendts (now at Apple), Christopher Bailey, and John Douglas at Burberry, Jeffrey Immelt, Bill Ruh, and Darin DiTommaso at General Electric, Reed Hastings and Todd Yellin at Netflix, Mark Parker and Stefan Olander at Nike, A.G. Lafley at Procter & Gamble, and Dan Yates and Alex Kinnier at Opower, as well as the leaders and innovators at the dozens of companies mentioned in the book ranging from Amazon.com to Zappos.
I'd also like to acknowledge helpful fact checks and support for interviewing executives from the companies highlighted in the case study chapters. This includes support from Joris Evers at Netflix, Holly Gilthorpe and Jennifer Villarreal at GE, Carly Llewellyn, Margot Littlehale, and Melissa Roberts at Opower, and their counterparts at Burberry, Nike, and P&G. I'd also like to thank the peer reviewers who provided helpful feedback and sanity checks on clarity and content: Tim Horan, Dawn Leaf, Jonathan Murray, Steve Sims, and especially Marla Bradstock. Needless to say, I am responsible for any remaining errors or inaccuracies.
A project like this can't come to fruition without a publisher able to appreciate the potential of a concept and demonstrate great flexibility. I have been fortunate to work again with the editorial and production team at John Wiley & Sons, including Sheck Cho, Stacey Rivera, Maria Sunny Zacharias, and Brandon Dust.
Part One
Overview and Background
Chapter 1
Digital Disciplines, Strategic Supremacy
On January 24, 1848, James W. Marshall, a carpenter from New Jersey, was helping to build a lumber mill on the American River near Sacramento when he noticed a twinkle in the water. It was the gold nugget that launched the Gold Rush, which, in turn, led to a population explosion and rapid statehood for California as fortune hunters and their suppliers – selling picks, shovels, food, libations, and more – descended on the territory from around the globe. The nonnative population of California grew from under 1,000 at the time of Marshall's discovery to over 100,000 by the end of the next year, thanks to the influx of Forty-Niners – mostly men who left their families behind to find riches. Even when the Gold Rush ended, much of the population remained, and so did a need for business associates, families, and friends to communicate with each other across the emerging nation.
To help meet this need, the Pony Express was launched on April 3, 1860. It could deliver letters and small packages between St. Joseph, Missouri, and Sacramento in only 10 days, a breakthrough for that era. The Pony Express accomplished this feat by using a cleverly engineered system of over 150 stations, hundreds of specially selected horses, lightweight riders, specially designed lightweight saddles, and clever “hacks” such as a horn to alert an upcoming station to ready the next horse. The stations were spaced about 10 miles apart, the distance a horse could go at top speed before tiring. In what was a forerunner to today's packet-switched networks such as the Internet, a lightweight pouch containing the mail was handed off from rider to rider, each rider exchanging horses several times before being replaced himself.
On October 24, 1861 – a year and a half after the Pony Express began deliveries – the first transcontinental telegraph network was completed, and in less than 48 hours the Pony Express ceased operations. Thus was a miracle of operational excellence supplanted by early information technology (IT) and what might be called information excellence. It foreshadowed the critical need to exploit IT – or be trampled and left in the dust.
From Value Disciplines to Digital Disciplines
To help companies avoid a fate like that of the Pony Express, this book delineates four digital disciplines– information excellence, solution leadership, collective intimacy, and accelerated innovation – by which IT can galvanize strategy, drive customer value, maximize competitive differentiation, help attain market leadership, and create wealth. The current darlings of Silicon Valley,