Olivia: Most companies are spending millions, even billions, on digital transformation. Yet the vast majority are failing to see the real payoff. The problem isn't the technology. It's that they're just putting 'digital lipstick' on a pig. Jackson: (A beat) 'Digital lipstick.' I love that. It's such a perfect, and slightly horrifying, image. You’ve got this state-of-the-art, AI-powered, shimmering lip gloss, and you’re applying it to a fundamentally unchanged, mud-covered business. It doesn't really fix the core problem, does it? Olivia: It absolutely doesn't. And that's the core dilemma tackled in Rewired: The McKinsey Guide to Outcompeting in the Age of Digital and AI by Eric Lamarre, Kate Smaje, and Rodney Zemmel. Jackson: McKinsey, okay. So this is coming straight from the consultants in the trenches, the people who see the lipstick and the pig up close. Olivia: Exactly. And what's fascinating is the authors, all senior partners, wrote this because they saw the same pattern over and over: companies buy the tech but fail to change how people actually work. One of the authors, Eric Lamarre, spent years with a single bank on their transformation, and that experience of it being a continuous journey, not a one-off project, is baked into every page. Jackson: That makes sense. It’s not a weekend makeover; it’s a lifestyle change. So what’s the difference between the lipstick and the real deal? What does actual 'rewiring' even look like?

Olivia: That's the perfect question, because it gets to the heart of their argument. True rewiring isn't just about launching a slick new mobile app for customers. It's about transforming the entire business model from end to end—marketing, sales, servicing, even risk management. It’s about changing the internal plumbing of the company, not just painting the front door. Jackson: Okay, that sounds massive and expensive. I can already hear executives getting nervous. Is there proof that this gut-renovation is actually worth it? Olivia: There is, and the evidence they present is stark. They did a deep benchmark analysis of 80 global banks over a four-year period. They separated them into two groups: the "Digital Leaders," who were truly rewiring their operations, and the "Digital Laggards," who were mostly focused on those front-end, customer-facing apps—the lipstick. Jackson: And the results? Olivia: It's not even close. The Digital Leaders grew their total return to shareholders at 8.2% annually. The Laggards? Just 4.9%. The leaders improved digital sales by over 50 percentage points, while the laggards barely managed 30. And here's the kicker: the leaders were able to decrease their branch network staffing by almost 30%, because they had successfully shifted how customers interacted with them. The laggards were stuck. Jackson: Wow. So the leaders weren't just adding a new channel; they were fundamentally changing their cost structure and how they operated. Olivia: Precisely. They rewired. And this isn't just a big-bank phenomenon. Think about Amazon. The book points out that in their early days, they faced a choice. They could have bought standard, off-the-shelf software to manage their business. Jackson: Which is what most companies would do. The classic line is, "It's too expensive and complicated to build our own." Olivia: That's the exact quote they use to frame the problem! But Amazon did the opposite. They invested relentlessly in building their own proprietary solutions for everything: vendor onboarding, inventory replenishment, dynamic pricing, order fulfillment. They built hundreds of interconnected, technology-driven solutions that they continuously improved. Jackson: So their competitive advantage wasn't just selling books online. It was the incredibly efficient, automated, and scalable machine they built behind the scenes. Olivia: That's it. They didn't just put a digital storefront on a traditional bookstore model. They rewired the entire concept of retail from the ground up. That’s the difference between a temporary facelift and building a whole new anatomy. Jackson: Okay, so building your own systems like Amazon requires an army of incredible engineers. But most companies, especially legacy ones, complain they can't hire them away from Google or Apple. How do you even begin to build that internal army?

Olivia: You've just hit on the second, and maybe most critical, part of the rewiring process. The book is adamant on this point: you cannot outsource your soul. You can't outsource the core capabilities that will define your future. They argue that companies need to aim for a 70 to 80 percent in-house ratio for their digital talent. Jackson: Hold on, 80 percent? That feels like a fantasy for a hundred-year-old manufacturing company or an insurance firm. They rely on contractors and consultants for everything tech-related. Olivia: And that's the trap. The book argues that in-house talent is fundamentally more productive because they understand the business context, they're invested in the company's success, and they stick around to improve the solutions they build. To get there, they propose a radical idea: the "Talent Win Room." Jackson: A Talent Win Room? That sounds like something out of a military strategy session. Olivia: It's meant to. It’s a dedicated, agile team—a mix of HR, tech leaders, and business managers—whose only job is to rapidly recruit, onboard, and develop top digital talent. They throw out the old, slow HR rulebook and operate like a startup. And they have a fantastic, almost unbelievable, case study to back it up. Jackson: I'm ready. Hit me with it. Olivia: It's a large agricultural business. Jackson: An agricultural company? Okay, you have my attention. That's the last place you'd expect to be poaching tech talent. Olivia: Exactly. This traditional, non-tech company decided it needed to bring its key digital roles in-house. So they set up a Talent Win Room. They trained the team to be completely candidate-centric. They modernized their sourcing, using contract-to-hire to test people out. They elevated the interview experience to include real coding exercises, not just talk. They implemented a tracking system to make the whole process fast and seamless. Jackson: And the result of this 'War Room'? Olivia: They built an 80-person, top-tier digital bench from scratch in six months. Jackson: Six months? That's… insane. Most companies take that long to approve a job description. What's the secret sauce? Is it just about throwing money at people? Olivia: It's less about money and more about respect. The book quotes the famous venture capitalist Marc Andreessen, who said, "There’s a finite number of super-smart engineers... These people go to the companies that take them the most seriously." The Talent Win Room is about showing that you take talent seriously. You give them a fast, challenging, respectful hiring process, you give them meaningful problems to solve from day one, and you give them modern tools to work with. Jackson: So it’s about creating an environment where brilliant people feel like they can do their best work, regardless of whether the company sells software or soybeans. Olivia: That's the core insight. You have to build a culture that attracts and retains talent. Because once you have that amazing team, and they build a brilliant, game-changing solution… you're still only halfway there. And this is the part of the journey where most transformations quietly wither and die.

Jackson: What do you mean? The hard part is done! You've got the strategy, you've hired the geniuses, they've built the thing. You just roll it out, right? Olivia: You'd think so. But the book delivers a bombshell rule of thumb, and it's one every leader should have tattooed on their forearm. For every dollar you spend on developing a digital solution, plan to spend at least another dollar to ensure full adoption and scaling. Jackson: Wait, say that again. A one-to-one ratio? So a million-dollar project is actually a two-million-dollar project, with half of it just getting people to use it? That feels… wasteful. Olivia: It feels that way, but the authors argue it's the most important investment you can make. Because a brilliant solution that nobody uses has an ROI of zero. And they tell this incredible story about Freeport-McMoRan, a massive copper mining company. Jackson: From banking to agriculture to mining. I'm liking the variety. Olivia: They built this genius AI model to optimize the settings on their copper concentrators—these huge machines that grind up ore. The AI could recommend tiny, real-time adjustments that would increase the amount of copper they recovered. It was technically brilliant. Jackson: But…? Olivia: But the frontline operators—the people who had been running these mills for 30 years based on sound, sight, and feel—didn't trust it. They saw it as a black box telling them how to do their job. They ignored the recommendations. Jackson: Ah, the classic human problem. The 'I know better than the machine' instinct. So what did the company do? Send out a memo? Run a training session? Olivia: They did something far more radical. The development team—the data scientists and engineers who built the AI—went to the mine and worked side-by-side with the operators for eight months. Jackson: Eight months? Olivia: Eight months. 24/7. They set up check-ins every three hours, around the clock. In those meetings, the operators, the engineers, and the metallurgists would look at the AI's recommendation together. The operators would say, 'The machine says to do X, but I'm hearing a weird vibration, so I'm hesitant.' And the engineers would explain the data behind the recommendation. They built trust one conversation, one shift, one three-hour check-in at a time. Jackson: That is an absolutely insane level of commitment. But I have to ask… did it actually work? Olivia: It worked spectacularly. After they built that trust, adoption soared. And in just one quarter, the throughput at one of the mines increased by 10 percent. To put that in perspective, that was the equivalent of building an entire new processing facility, which would have cost hundreds of millions of dollars. They achieved it with zero new capital, just by focusing on the human side of adoption. Jackson: That story gives me chills. It completely reframes the idea of a 'go-live' date. The project doesn't end when the tech is deployed; that's when the real work begins. Olivia: That's the essence of the final section of the book. You have to actively manage the change, build a compelling story, and get your hands dirty ensuring people embrace the new way of working.

Jackson: So when you pull it all together, the journey they lay out is pretty profound. It's not about the tech at all, is it? It's about a deep, holistic rewiring of the business, starting with a clear-eyed strategy that goes beyond the superficial, then owning your talent instead of renting it, and finishing with an almost obsessive focus on getting your people to actually trust and use the new tools. Olivia: Exactly. The book's title, Rewired, is so perfect. It’s not called 'Upgraded' or 'Digitized.' It's about changing the fundamental connections, the synapses, within the organization. The technology is just the catalyst. The real, difficult, and ultimately rewarding work is human. Jackson: It’s a powerful message. And while some readers have said the book can feel a bit high-level, these stories make it incredibly concrete. So for a leader listening to this who feels a little overwhelmed by the scale of it all, what's the one thing they should do tomorrow? Olivia: The book suggests a very simple first step. Get your top leadership team in a room and ask one question: 'When we say the words 'digital transformation,' do we all actually mean the same thing?' The authors found that in most companies, the answer is a resounding no. The CEO thinks it means one thing, the CFO another, the head of marketing something else entirely. Jackson: They're all using the same words but speaking different languages. Olivia: Precisely. And the book argues that getting that initial alignment, creating a shared vision and a common language, is the non-negotiable foundation for everything else. You can't rewire a company if the electricians, the plumbers, and the architects are all working from different blueprints. Jackson: That's a fantastic, actionable starting point. It’s not about buying software; it’s about having a conversation. Olivia: It all starts there. We'd love to hear from our listeners on this. What's the biggest roadblock you've seen in digital projects at your own workplaces? Is it the strategy, the talent, or the adoption? Join the conversation on our socials and let us know. Jackson: This is Aibrary, signing off.