The Cure for Digital Era Blues
If large and established companies are gigantic ships, the tech-savvy new guys are agile sailboats. Both are in the middle of the ocean and must make a 90 degree turn. How can the ships keep up with the sailboats?
The odds are surely stacked against the big companies: their large and bulky organizations have been doing the same, static things for years. This turn is going to take a long time.
On the other hand, the energetic new guys have the newest technology and the freedom to immediately adjust to the digital climate. Their turn will be quick and easy.
With the odds stacked against them, it’s easy for the big ships to forget the good news: they already have a large customer base. That’s how they became big ships in the first place. It’s not too late for the big ships to keep up with the new guys’ technology.
With customers becoming progressively digital, we’re at a crucial moment where corporate complacency means falling behind. Digital natives will start jumping off the large ship to experience the so-called latest and greatest, but we don’t want them to go through that trouble. Here’s how a certain archipelago in the orient has started.
The Philippines has been an instrumental part in the fastest growing economy in the world, ASEAN. The country’s largest financial institutions are turning toward online banking. The most popular Filipino retailers like Penshoppe are recognizing that their customers’ screens are their largest storefronts. Telcos like PLDT and Smart are growing a contemporary digital spine.
The Philippines’ ships are deploying fighter jets to attack their enemies while they make their 90 degree turns. It looks like they’ve found the ingredients for successful transformation. They’ve found the CURE for large companies’ digital era blues.
Customer Centricity. From a product-focused “Why aren’t customers buying my product?” to a customer-focused “What do customers need?”
Companies used to be obsessed with continuously developing products and selling them afterwards. However, in a day and age where rave reviews and undesirable complaints easily spread over social media, customers now have the power to influence what’s on the market
In paying more attention to their long-time customers, companies can significantly improve things on both their end and their customers’. Tracking sentiment through social listening, encouraging loyalty by creating relationships, and creating customer oriented KPIs (key performance indicators) are only some of the possibilities for paying better attention.
Take Penshoppe for an example. Their March 2015 One Direction campaign drew a high number of endorser posts; this, however, did not correlate to growth in intent-to-buy. Later in 2015, Penshoppe partnered with Sandara Park to create a promo in which purchases would give customers access to a fan meeting.
In seeing the popularity of One Direction promo, which only asked people to comment about Penshoppe, the company reassessed and adjusted to create greater impact. In their Sandara Park promo, they applied what they learned, asking people to buy Penshoppe merchandise to gain access to a fan meeting, ultimately increasing customers’ intent-to-buy.
Urgency. We’re at a crucial moment where corporate complacency means falling behind.
Imagine if Penshoppe continued to do comment only promos instead of taking the extra step to increase customers’ intent-to-buy. Their sales would ultimately plateau, and their business would not grow.
Again, imagine if Penshoppe continued to do comment only promos while its competitors took the extra step to increase customers’ intent-to-buy. Not only would Penshoppe’s sales plateau, but they could lose out to competitors who are listening. This lack of response and flexibility could help explain why more than half of the Fortune 500 firms since 2000 are no longer operating.
Realignment of Organization. In the midst of a culture change, everyone needs to row in the same direction.
Paradoxically, companies must establish both innovation and stability as norms. The organizations must make it possible to deploy fighter jets while they’re making their big right turns.
Companies often confuse innovation with abandoning current operations, but really, it’s about finding new ways to please your customers, but also improving the current reasons they’re already there.
Success must be redefined so that it means simultaneously innovating along an agility platform and stabilizing along a core platform. This way, the company can commit to transforming creatively while maintaining the core values that brought them growth and success in the first place.
Ecosystem of Execution. Creating a community to sustain your effort.
One-time innovation to eventually plateau again will not be enough. Companies must set themselves up to evolve then evolve again to remain successful. They must also become comfortable with the continuous change to the point where it is a part of company culture.
To do that, companies need to engage global partners, who support you with the world’s best practices. Adjacent businesses, though not directly competitors, can somehow eat into your services. The disruptors should become your frenemies. Instead of picking fights, partner with them to give your customers the best of both worlds. Become that all-in-one platform they can easily access.
One company perfectly used this CURE. In 2010, Domino’s recognized that their pizza tasted like, well, cardboard. To address this central aspect of their company, they turned to their customers.
After gathering consumer input, they created an app for easy and fast delivery. This created a sector that the old Domino’s never thought would be relevant to the pizza industry: technology and app development. Next came cars with ovens so that every pizza was fresh when it reached the customer’s door. This changed the details of each driver’s job.
After these changes, Domino’s watched the value of their stock grow.
This CURE is powered by the transformation toolkit — cloud-native infrastructure, big data and analytics, omni-channel engagement, and distributed transactions or multi-asset digital wallets — during this 90 degree turn. For the next big turn, we may have to search again.
Mr. Winston Damarillo, Chairman of Amihan Global Strategies, deeply appreciates DigiCon’s hard-working organizers and energetic attendees. This blog post was created in conjunction with Mr. Damarillo’s talk on Thursday, October 12, 2017.