Covid has brought about a moment of digitisation reckoning for companies around the globe, with 2020 having become an arena where only the most virtually fit survive. Prior to the pandemic, digitisation initiatives were typically viewed as “progressive,” carrying a nuance of ‘nice-to-have,’ whereas we can safely assert that their categorisation has now shifted to “essential.” In my own business, I’ve had a retire various presentations designed to persuade clients to prioritise digitization as they’re just no longer relevant; the conversation has now shifted to how to sensibly digitise, rather than whether to do so.
Your customers’ expectations of you are changing. Whether you sell to consumers or other businesses, your customers now have digitally enhanced expectations of the brands they engage with. Think about it – we all expect apps to be useful, like Uber, and simple to use, like Apple’s. Their ease of use and usefulness have defined the new normal. Against this backdrop, how useful and intuitive is your company’s user experience?
Your competitors are adapting to the same market dynamics, either re-imagining themselves through disruptive digital business models or, at the very least, through digitally enhanced products and services.
We have conversations regularly with organisations who have made a strategic decision to move digital transformation from an agenda addendum to an agenda priority. The question then becomes, ‘where to start?’ We’ve distilled five ‘wisdom principles’ for getting started in tackling this challenge successfully – by adopting these principles, we’re confident you’ll set your company on a trajectory to achieve remarkable, sustained digital innovation.
Run your company at two speeds
Every company has a distinct ‘clock speed.’ By clock speed I mean the rate at which the organisation, as an entire system, is able to move, react, adapt and so forth. The pace of digital innovation means the market’s digital expectations are changing faster than your company is able to evolve in response. It’s not practical to imagine you can increase the entire organisation’s clock speed to compensate. It’s more reasonable to aim for developing a ’twin speed’ organisation, with a fast speed for functions that address evolving customer experiences and must change rapidly, and transaction speed for all other traditional functions.
We’re not advocating for the creation of a ‘parallel IT universe’ within the company, or even creating an elite unit. Rather, we’re advocating recognition of the fact that IT departments typically have evolved layers of process to ensure changes to their overall system of record – typically transactional processes that run the company’s operations – don’t happen rapidly. While this is good and well, those same layers are applied to the company’s system of engagement; those technologies that touch the customer – this translates to the company’s digital user experience falling further and further behind the pace of change in the market. This insight can lead to implementation of practical process changes. For example, whereas most IT approval processes remain unchanged (transaction speed), more streamlined approval processes are implemented for digital initiatives that touch customers (fast speed).
Establish a Digital Excellence Team
Once senior leadership has taken the decision to speed up digital maturity and are open to the idea of running at two speeds, their single most important act is most likely to appoint a Digital Excellence Team which will champion this agenda and drive change. This team’s leader should report directly to an Executive Director.
Here are the key, simple reason a team like this makes sense is that digital transformation is difficult, and often underestimated. Any change is tough, but digital change can easily bring competing agenda’s into conflict. By adopting the change principle that “people support what they share in creating but resist what they’re excluded from,” the creation of a Digital Excellence Team will maximise your chances of success.
The team should ideally comprise;
Senior marketing representation
Generally, marketers are highly attuned to customer preferences and feedback, as well as to what competitors are up to. They chiefly fly the flag of customer interests, and agitate for change, which is arguably the most important impulse in the team. While we don’t encourage appointing these representatives as team lead, they are essential to the team keeping the main thing the main thing.
Senior IT representation
IT is responsible for systems working perfectly to deliver business value according to agreed SLA’s. This world is hardwired to be cautious of change, with good reason. IT uniquely understand the technical ramifications of operationalising new digital service ideas. By involving senior IT representation in the team, they are persuaded of the “why” behind the “what,” becoming champions of change in their department. Again, we don’t consider it ideal that these representatives lead the team, but senior representation is essential.
Senior Operations representation
Any digital initiative has process implications, which also implies people change management. Operations representation will likely be keen to champion digital initiatives which create efficiencies internally. Whilst these initiatives are valid and essential, the Digital Excellence Team should agree to keep the customer central. A good rule of thumb is to insist on two projects which touch the customer, for every one project creating internal efficiencies.
Crafting compelling ROI business cases for digital initiatives is often challenging, but is essential work. Fanciful initiatives need to be weeded out, and having someone on the team who asks the hard questions early on in the ideation process is very helpful. Further, to practically implement ’fast speed,’ finance needs to create streamlined budget approval and other processes.
Start with the customer, and work backwards to the technology
Digital conversations are easily dominated by the technical people in the room. Conversing in technical jargon effectively sidelines non-technical people, particularly given that these exchanges seem so authoritative. A far better approach is to put the customer at the centre of the conversation, and reflect on the customers’ journey in relation to your product or service. This involves everyone in the room, because we’re all customers as individuals. It’s easier for an executive to practice empathy with customers, and develop an appreciation for pain points in customers’ journeys with our brand.
Another reason to prioritise the customer, is that we’re all users of technology. That is, your employees, as users themselves, are acutely aware of their own digital user pain points. This can easily lead to a primary focus on internal digital projects at the expense of digital projects that touch customers. As we’ve mentioned earlier, our rule of thumb is the ‘2:1 principle,’ i.e. for every internal digital project we say yes to, we need to say yes to two projects that touch customers directly.
Thirdly, the principle of essentialism is relevant here. A primary focus on technology can lead to vanity projects – often using the latest tech fads such as blockchain, etc, that ultimately die because customers don’t really need this new widget in their lives. Focussing on customer journey pain points takes the conversation out of the realm of novelty, rather focussing on sensible, valuable digital innovations.
Own your system of engagement
This point is slightly technical, but it’s really important as a broad framework within which to navigate your digitisation journey. You can conceive of your company’s technology landscape as broadly two systems – a system of record, and a system of engagement.
Systems of record are systems such as CRM’s and ERP’s – systems typically focussed on employees, that record transactional data and so forth. These administrate the business and shouldn’t change often. It usually makes sense to license these systems rather than build them, as they’re often extremely complex.
Systems of engagement touch customers, partners and others. They need to have brilliant, intuitive user experiences and need to iterate frequently to stay with the times. Your website, apps, social profiles and so forth all form part of your system of engagement.
A smart guiding principle to adopt if you’re intent on competing digitally, is to harness the power of third-party platforms for your system of record, but invest in building out your own system of engagement. The reason for this is that third-party platforms typically make great systems of record but are not as great as systems of engagement.
Wow your employee users
One of your staff may have used Uber to get to your offices this morning. During the trip, she might have conversed with friends via social media, perhaps setting up a social event for the weekend. Just before arriving, she may have made a couple of banking app payments, and purchased groceries for delivery later in the day. As she settles into work, she switches from the Uber, Instacart and Amazon user experiences to your company’s internal systems’ user experience. How would you rate the comparison? The point here is that we cannot hope to attract and retain the brightest young talent to our companies, only to subject them to daily frustration in their workplace user experiences. The key is to prioritize all your organisation’s users, not just customer users.
A sensible place to start is to build business cases for each main employee user friction point, and then digitise operations where it makes sense. Unlike customer user business cases that usually predict revenue growth, executive sponsorship for employee user projects are motivated by the prospect of savings through efficiencies.
All the best in your digital endeavours!