Competitors never kill your business, your lack of preparedness for what customers want, does. So, are you ready for change?
I normally don’t like buzzwords. But I like this one. Truly means something. Digital transformation. I am sure the term has existed for long in different forms. To me, two great business quotes exemplify digital transformation. “More businesses die from suicide than homicide”, and the second, “More companies die of indigestion that starvation”.
While the first was originally written for startups, this is generally true for all businesses. Competitors never kill your business, your lack of preparedness for what customers want, does. The second one, contradictory as it may seem, actually supports the same theme. Are you preoccupied with too many internal projects that stunts your ability to react nimbly to external change?
The need for digital transformation is unquestionable. Your consumers have changed. Our lives have changing every moment. The pace of change in the past decade has been the most dramatic in recent history and is only going to continue. So if you and your organisation are feeling underprepared, then you are probably thinking about the change well enough. You are never going to be in control, it is a continuous journey to matching the external change.
There are 3Cs that create the platform for your preparedness.
Like every other big change that happens in an organisation, digital transformation is all about leadership, strategy and orchestration in that order. You may bring in a Chief Digital Officer, but that alone is unlikely to be effective if the CEO does not drive this agenda.
So, as steps towards digital transformation (i) keep the customer at the centre of the organisation (ii) create active listening loops (iii) ensure a continuous improvement journey in client happiness that brings in a customer culture and willingness to change as the market segments change or better still, begin to change.
This creates a nimble organisation which has the ability to take the willing and skilled employees forward for the newer, ever-evolving ‘digital’ world where the ‘old bag of tricks’ need to be shed and new ones need to be built.
Some of the trends you need to watch while you make the transition:
This digital transformation is at a fundamental level changing your business model in your category to a platform with network effects. It’s what Uber, Airbnb, iTunes have done on one side and Swiggy, Zomato, Oyo rooms on the other. Is your traditional business model transitioning to a platform? If yes, are you changing your business to be ready for the transition? Say, you are a restaurant at a 5-star hotel, would you deliver food from your menu? So, this is fundamentally about reacting to how your consumer is changing? Balancing on one hand, the customer experience at the restaurant is dramatically changing with delivery services boosting their business.
Ten years back, transformation meant every company making ‘consumer apps’, putting tablets at the front-end among many other tech-led transformations. Every company was on the bandwagon. The truth was the consumer did not want one more app on his phone. I am arguably sceptical when executives loosely throw words like ‘we are going omnichannel’. Is that an overwhelming customer need or you are just following a media trend? AI, IOT, VR, Robotics, Blockchain – some or all of these will change our lives for sure, but not today. So start small on these, and watch closely as consumer openness changes and technology evolves.
While stories of business model change are usefully bandied around as the poster child of digital transformation, I am a huge fan of continuous incremental change. Consumer shifts don’t have overnight – so don’t over-estimate the impact of change. It leads to organisation fatigue and cynicism to dismiss new initiatives as ‘flavour of the month’.
A recent BCG article said in a different context, “Think big, Start small, scale fast”, this should be the continuing theme of your digital transformation initiatives. As an example, even today after years of sustained efforts most life insurance companies do less than five percent of sales through digital channels. While some new-age companies in the insurance category, are approaching through a pure-play digital channel.
Agile organisations are those where the old-world asymmetry of information between stakeholders has been broken. If everyone has access to information, skill and knowledge to act/react to the information to do real-time action, you are on the road to the future. If you are not, then you are probably not ready for digital transformation. A few successful projects could mislead the leadership of progress.
I am a big fan and practitioner of the Japanese concept of the ‘gemba walk’. Your best ideas, thoughts come on the floor, in the field talking to your frontline and customers - with an intention to understand and not try and find mistakes or value-add immediately. The gemba walk creates an understanding, which put in perspective with the larger context, gives you a transformation agenda.
In summary, the important thing is to build your transformation agenda carefully. What are the processes that are reducing customer effort? What needs to get faster, what needs to be made simpler? What are the learnings drawn from other categories? A couple of back-of-the-envelope cues are critical: are you making easy for consumers to contact you all the time without a call centre? Can you ensure your call centre volumes are reducing by at least 20 percent every year? Do you have your active customer listening channels up to listen to a representative 20 percent from your boardroom? If your answer to these questions is yes, you have already begun your journey. Of course, it is a lot more, but these are milestones. And finally, your journey is yours.
Comparing what people quote in the media is not relevant since these are very rarely relevant in its entirely. On that note, wishing every business leader to find their own digital transformation journey in their business or life.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)