This is a summary of the book titled “Rewired: The McKinsey guide to outcompeting in the age of Digital and AI” written by Rodney Zemmel, Eric Lamarre and Kate Smaje and published by Wiley, 2023. It is a relevant and authoritative playbook and reference to the transformation brought on by AI. For those who might question the source, McKinsey is a global leader and leaders like Sundar Pichai, James Gorman, and Sheryl Sandberg have all worked there. Written for executives, this book’s recommendations apply to organizations of all sizes.

This book suggests that digital and AI transformations are  here to stay. They will be a constant and never-ending change that can be embraced with a careful roadmap, and one built on foundations. Organizations will require core digital talent in-house and the company’s operating model must support rapid development. Such an in-house technology environment needs seven capabilities to support digital innovation across the organization. Digital leaders must establish a data architecture that facilitates the flow of data from source to use. Strategy forged by these leaders must drive customer or user adoption.

Digital and AI transformations are crucial for businesses to remain competitive. With 89% of leaders having undertaken some form of digital transformation, it is essential for leaders to extend their initiatives beyond tech to encompass all organizational capabilities. A successful transformation depends on foundational work, including a clear, detailed road map that outlines business domains, solutions, programs, and key performance indicators. A domain-based approach is recommended to right-size the transformation's scope, prioritizing domains based on value and feasibility. Leaders should avoid being distracted by low-value pet projects and focus on long-term capability building. Digital leaders should prioritize people and capabilities over tech solutions, focusing on long-term improvement and customer experience. The CEO should also take personal responsibility for the transformation, as every member of the executive team plays a role in driving it. By laying the groundwork and implementing a robust digital roadmap, businesses can achieve meaningful change and measurable results.

To support continuous transformation, organizations should focus on core digital talent in-house, with 70% to 80% of their digital talent residing in-house. Many organizations have established a Talent Win Room (TWR) to focus on digital talent, including executive sponsors, tech recruiters, HR specialists, and part-time functional specialists. Digital leaders offer dual career paths and align compensation with employee value. The company's operating model must enable fast, flexible technology development, with agile pods being a key component. Leaders must deepen their understanding of agile beyond processes and rituals to ensure pods deliver their potential value. Three dominant operating model designs are digital factory, product, and platform (P&P), and enterprise-wide agile. The digital transformation must also include user experience design capabilities to ensure solutions meet customer needs and wants. Agile pods should include design experts and leaders who should understand how customer experience links to value.

The enterprise's technology environment needs seven capabilities to support digital innovation across the organization. These capabilities include decoupled architecture, cloud, engineering practices, developer tools, reliable production environments, automated security, and machine learning operations (MLOps) automation. A distributed, decoupled architecture enables agility and scaling, while a cloud approach and data platform are essential for reducing costs. Engineering practices, such as automation of the software development lifecycle (SDLC), DevOps, and coding standards, are crucial for agility and quality. Developer tools should be provided in sandbox environments, and a reliable production environment must be secure and available. Automated security is essential for moving to the cloud, and machine learning operations (MLOps) automation can help exploit AI's potential. A data architecture facilitates the flow of data from source to use, and data products are essential for standardization, scaling, and speed. A data strategy sets out the organization's data requirements and plans for cleaning and delivering its data.

To maximize the benefits of digital and AI transformation, leaders must implement strategies to drive customer or user adoption. Adoption depends on two factors: user experience and change management. Strategies include adapting the business model, designing in replication, tracking progress, establishing digital trust, and creating a digital culture. A CEO or division head should ensure alignment across the business, plan a replication approach, and assetize solutions. Leaders should track progress through a five-stage process, assess risks, review digital trust policies, and ensure operational capabilities support digital trust. Leaders should also display attributes that support a digital culture, such as customer-centricity, collaboration, and urgency.

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