How Digital Is Your Company?

The domain information then lets Cisco target its advertising messages, greeting employees working for competitors with an intelligent screen that prompts, "Welcome to Cisco. Would you like a job?" And the Web site features an emergency escape key called, "Oh No! My Boss is Coming," to help would-be Cisco employees hide their job hunt from their current employers.

Through its Web site Cisco is able to post hundreds of detailed job descriptions at a very low cost -- and with great convenience for prospective employees. Jobs are easily searchable by title, by job description, by keywords, by field of interest, and by location, throughout the United States and the world. Recruits can conveniently inform themselves of the relevant job definitions and skill requirements. Through a special "Hot Jobs @ Cisco" page, the company lists unique positions that it is especially eager to fill.

But the Web site does more than simply list job openings. It also gives potential recruits a window on life at Cisco, making it easier for would-be employees to gain accurate information about the company and its way of working. For those who want even more information, the site's "Make Friends @ Cisco" links applicants with Cisco employees, which makes it easy for them to talk about life at Cisco, about potential job opportunities, and about common interests. Cisco employees volunteer for that program, which matches them with recruits who share similar backgrounds and skills.

Cisco has embraced e-recruiting with enthusiasm -- largely because it works. Today Cisco receives between 30,000 and 36,000 resumes each quarter -- 80% electronically. Cisco has successfully automated 70% of its recruiting process. At the same time, Cisco is building a database that is predictive of the qualities and characteristics that make a star Cisco employee -- screens that guide the company's evolving Profiler system. Through the Profiler, applicants submit personal information online -- education, professional skills, employment experience, and personal interests. The more information the applicant enters, the more the system asks relevant questions. The outcome is a specialized resume that Cisco recruiters can match to job openings. It is a system that, ultimately, allows applicants to recruit themselves.

How do you get your customers to segment themselves?

It is a crucial question for every business: "what does it take to get and keep a customer?" Or, broken down to first principles, "Who is my customer? And what does he or she really want?" These are direct, down-to-earth questions, around which elaborate, expensive, and inefficient answers were developed in the old economy. Much as finance and recruiting in the atoms-based world have become bureaucracies, so too has the hard work of customer segmentation, which has evolved into a hit-or-miss proposition.

It is an all-too-familiar model, whether you experience it as a producer or as a customer. If you're the producer, you spend money and time trying to find your customers. You hire consultants to conduct focus groups; you channel your energy into market research -- all with the hope that you'll learn something about what your customers want. Based on these gleanings, you create your service or manufacture your product. Then you spend more money on marketing and advertising, hoping to lure consumers into your store or to sample your service. And finally, the big moment comes: Customers arrive and they don't want what you're selling. Or you don't have exactly what they want. Or it turns out that they're not really the customers you had hoped to attract in the first place.

It's a system guaranteed to produce mismatches. And it is precisely those mismatches that digitization prevents. In fact, the promise of e-segmentation is the promise to turn the old world upside down. Rather than getting stuck in a make-and-sell system, you shift into a sense-and-respond mode. The information that once was expensive and difficult to get -- and that often turned out to be inadequate, fragmentary, too old, or just plain wrong -- now comes to you courtesy of your customers, who deliver it to you both cheaply and effortlessly from online feeback or through their buying behavior.

The benefits of shifting from atoms to bits are enormous. You save money. You save time. You get a window into the future: By studying the behavior of your most valuable and forward-looking customers, you have the ability to build a predictive capability that tells you where the market is headed next. And, most important, you then can reduce the risk that your customers will move, and you don't -- which could leave you with an obsolete business model, products or services that no longer fit your customers' profile, and the daunting task of trying to retrofit your company and its offerings to a customer base that has moved on to new territory and more responsive relationships.