6 Steps to Defend Against Disruption
The old saying, “there are only two certainties in life — death and taxes” can now be updated to include a third certainty, “disruption”. No organization or individual is immune from the inevitable disruptive forces that come with digitization.
Digitization has enabled consistent, high-quality customer interactions to be a competitive differentiator, no matter the channel — and when the right channel is used, customer loyalty is strengthened. There are many examples of Disruptors building their business on a superior customer experience. Think Amazon and Uber and how the buying experience on both platforms compared to the companies they disrupted.
So what to do? How can long standing and historically successful companies defend their markets and perhaps even become Disruptors? By investing in a targeted set of digital capabilities and approaches, companies can strengthen their defenses against disruptors — and not just by a percentage point or two. Moving up the digital curve matters because digital leaders are growing market share on the back of strong customer loyalty. This is my six-step approach to successful Digitization.
1. Commit to digital at a strategic level
Some companies are breaking their conservative mold and embracing an “all in” digital strategy. Strategic shifts toward digitization are hard and come with a degree of risk, albeit risk that can be managed. They require gaining Board and management consensus around a shared vision, challenging time-honored institutional truths, and learning new skills and practices on the fly.
Committing to digital is one thing, delivering on the commitment is the real challenge. And in many if not most companies, the internal staff will simply not have the skills to deliver the vision. Companies that commence a digital transformation and rely on long-serving staff to deliver the vision will almost certainly waste a great deal of time & money and most likely will fail.
2. Creation of consistent experiences online and off
Most buyers that interact with multiple channels spend more than those who only purchase from a single channel. Taking advantage of that fact takes strong cross-channel integration. Even though the average customer now uses six different channels over the course of their decision-making journey, many companies struggle with disjointed selling models that make it hard for customers to move smoothly from one channel to another. Mobile especially has changed the way decision-makers interact. More than 90 percent of buyers use a mobile device at least once during the decision process, yet a minority of companies have a compelling mobile strategy. The latest channel to emerge is Chatbots. Now widely seen as the obvious way to engage customers using their preferred channel and leveraging the incredible power of Artificial Intelligence.
3. Data empowers the sales function
Top-performing companies that have transformed their business are using advanced analytics to improve their insight capabilities and deploying tools that help marketing and sales understand what offers, content, and services will hit the right notes with key customer segments.
Advanced analytics can also help sales reps navigate a more crowded purchasing environment. Similar data-enabled marketing practices allow companies to create highly targeted campaigns that can break through the noise and forge meaningful relationships — a critical capability in a competitive or fragmented market.
4. End-to-end connection of processes to improve insight and decision making
Effective presales activities — the steps that lead to qualifying, bidding on, winning, and renewing a deal — can help companies achieve consistent win rates of 40 to 50 percent in new business and 80 to 90 percent in renewals. But that level of success requires close coordination from front office to back, and while many companies have done a good job automating the back office, they fall short when it comes to connecting those processes to the front end. That lack of integration can lead to multiple customer handoffs between functions, long turnaround times for quotes, missed delivery dates, and a proliferation of unnecessary technologies, applications, and data.
5. Develop a culture anchored on innovation and execution
The majority of companies take more than a year to move a digital initiative from concept to commencement, and few companies use the types of test-and-learn and rapid prototyping processes that have been shown to accelerate innovation and enhance customer satisfaction.
Leading companies, by contrast, are at the forefront when it comes to deploying agile development practices and rapid experimentation. They collaborate actively with external partners and use events like digital hackathons to shorten the learning curve.
The key cultural change needed to support innovation is to embrace the concept of “successful failure”. An obvious contradiction, however it’s vital your people know that there can be success in failure based on what was learnt and how those learnings can be applied to future efforts.
6. Metrics to support digital aspirations
Organizational challenges can blunt the reach and effectiveness of digital initiatives. Inward-facing processes, limited transparency, confusion about roles, and a lack of prioritization from executive leadership are common.
Top-performing digital companies are also willing to dust off their metrics and think strategically about what types of measures and incentives will engender the outcomes they want. That doesn’t mean creating more complex and numerous performance indicators, but rather revisiting how the company measures progress and carving out a handful of metrics that can really move the needle.
How Can You Get Started?
Rather than biting off a slew of digital improvements at once, companies often get faster results by starting with small wins to build conviction and momentum — concentrating on areas where they have existing capabilities, clear objectives and strong leadership backing.
Organizations generally see the swiftest wins by first picking one or two high-value customer segments and mapping their decision journeys in full to understand how these customers buy, what channels they use, what influences their decision making, and what turns them off. Then they employ agile development techniques and digitization to redesign one or two supporting, customer-facing processes from scratch.
This approach breaks the digital-transformation process into bite-size chunks that are easier to isolate. It allows the company to test and learn to find success — in tangible increments that moderate the overall risk. It also forces product development, marketing, sales, and technology to come together and understand how to use leading digital design practices, such as Minimum Viable Product, in a disciplined, customer-focused way. That can ramp up the cultural changes needed and lay the groundwork for broader, deeper improvement.
Any process of change creates a ripple effect across the wider organization, and particularly the commercial organization. Digitizing core elements in the sales function, for example, may free up field reps but place greater demand on inside sales and fulfillment. To support their evolving customer and sales model, companies need to anticipate the reverberations and reconfigure where and how they invest financial and human resources across sales channels and customer journey stages. That involves identifying which skills need to be reallocated, what data and analytics resources are needed, and which customer opportunities require capabilities that need to be built, hired, or acquired.
A final comment is to be wary of digitization plans that revolve around a “we will build it” approach. The technology available to every company by way of Cloud services is multiple factors more superior than what your in-house team could ever build.