Code Halos are the digital records surrounding people, organizations, processes and devices. They comprise all of our digital activity — buying behaviors, social media interactions, song preferences, searches, even our geographic location. Today's leading businesses are deriving meaning from this rich body of coded information to develop an intimate knowledge of anyone they work with, whether customers, employees or partners.
When Code Halos collide — meaning that information from one Code Halo (your driving behavior as measured by a telematics device) combines with another (your premiums paid over time) — it sparks new insights that can lead to new business value. Ultimately, such Code Halo collisions remove the guesswork of sales, marketing, supply chain, logistics, finance, human resources and every other business function and replaces it with the precision of empirical data, gathered and analyzed in real–time
Using these insights, companies can respond to or anticipate the market's every nuance; optimize their employees' knowledge and capabilities; and amaze their customers with products and services that match their needs and desires. When all this is combined with a new IT architecture based on social, mobile, analytics and cloud technologies (which we call the SMAC Stack™), businesses can elevate themselves to an entirely new platform that gives them an agile, efficient and innovative competitive edge.
The good news is, the path these leaders have blazed can be navigated, even by traditional industry incumbents. By analyzing the business upheaval of the last several years, we have seen a clear model of success emerge. Today's business leaders — and others that are quickly following in their footsteps — have followed a five–step path to success that we call the Crossroads Model.™ In short, the trajectory of the Crossroads Model includes the growth of Code Halos and leads to an unforgiving and rapid industry shift that separates winners from losers (think Amazon vs. Borders or Netflix vs. Blockbuster). The details may differ for each industry, but time and again, we've seen the same five discrete phases play out:
In this stage, Code Halos begin to form, creating a fertile context for innovation. The signs are subtle, but the combination of growing economic pressure, increased customer expectations and new technologies all create an environment for Code Halos to take hold and new business models to develop. Watch for new technology developments, unusual initiatives from competitors and new demands from customers.
Here is where Code Halos begin to intersect, causing business shifts. As Code Halos grow richer with information, associated algorithms are developed, leading to new ideas and offerings. Soon, a "Spark" of innovation quickly reshapes internal business processes or the customer experience. Think Pandora in music or Progressive in insurance.
During Enrichment, the Spark becomes a blaze as Code Halos — if created and managed correctly — grow by orders of magnitude as both the number of users and the value of data increases. This gives rise to new products, processes and models for value creation. Big data analytics is crucial to this phase, as mountains of ones and zeros are converted into real business value.
The Crossroads phase is where corporate fates are determined. Code Halos reach critical mass and create new customer expectations and economic models. The Crossroads is a compressed period of time — often between one and three years — where industry leadership shifts, and markets flip. This drives a rapid, sometimes violent, swing in reputation, revenue and market value.
The New Code Rush or Extinction Event
After the Crossroads, companies face two widely divergent paths, each with significant momentum (both positive and negative) that is extremely difficult to reverse. Either they recognize and respond to the signposts of the preceding phases and ascend rapidly, gaining in market relevance and value; or — if they are not prepared for the rapid market shift — they head painfully and dramatically toward stagnation or an Extinction Event
We are living in a new digital epoch in which Code Halos are truly reshaping how we live and work. Businesses that ignore the transformational power of SMAC technologies and Code Halos face the fate of displaced market leaders. Those that adapt can ascend to the heights of today's leaders and compete on the basis of data–driven knowledge and customer intimacy.
To learn more about the Crossroads Model and how Code Halos transform companies — and entire industries — read our white paper Code Rules: A Playbook for Managing at the Crossroads available on our Future of Work Web site and begin crafting a strategy for winning the new "code rush."
In addition, a Code Halo book, e-book and app are coming soon. The app will be available this fall through the Apple App Store. It will deliver a truly immersive experience via deep-dive videos, interactive graphics and diagnostic tools.