Written by Henrik Feld-Jakobsen, Head of Strategy at Vaimo
The last few years have seen long-established business models being replaced by their more customer-centric counterparts, prompting some companies to set new agendas and others to panic.
Digitalisation and importance of customer centricity are slowly pouring to C-level and into the boardrooms. Digital managers and consultants are praising omnichannel, seamless customer experiences and automation – and they’re eager to push for the next big thing.
While merchants and retailers realise their business model may be lacking customer centricity, they may not truly understand how to transform our companies and business models. This even goes for strategic consultants like myself – we simply have the privilege of being able to focus and cross-pollinate knowledge and experience on what, why and how to succeed with digitalisation. The lack of digital competence and the cultural understanding of the need for change in companies is the main challenge for meeting new digital priorities (source).
It leaves many companies in a state of limbo between the current business model and the desired future one. This state of limbo may stretch for years, stagnant in the design mode of strategy, and never pushed to deployment. This leaves the organisation in a drifting mode that drains performance. Merchants may stay in this state because they don’t know how to move forward, they think it’s too big of a challenge, it’s too overwhelming, or they fear possible failure.
DIGITAL COMPETENCE IS STILL VERY IMMATURE
Digital transformation is more than just digitising a part of the business; it’s usually a fundamental change in the company’s business model. This naturally creates immense challenges, especially if the organisation itself it not used to changes.
Should this endeavour be commandeered by IT, marketing, or C-level employees? Should the individuals involved be hired in-house, or should merchants turn to consultants? This all depends on where a merchant is on their digital journey, the resources available to them, and how fast they want to move ahead. In general, it’s good practice to have these competences covered in the process:
- Profound insight into digital possibilities, technologies and systems
- Commercial experience and understanding of the current business model
- Change Management: an understanding of how to drive cultural changes
- Stakeholder Management: work across organisational silo
Most likely, a business will be missing some of the competences in their organisation, or a single person is not able to cover all of them. Experienced executive leaders with a well-proven commercial and digital background are not easy to find. Often, the ones in the driver’s seats of digital transformation are the experienced leaders that try to navigate in a field in which they lack experience. These experienced leaders then apply their knowledge and best-practises from the world they know, whereas digitalisation and the new “disruptive” business models call for new skills.
Generation Y, or the PC generation, is now gaining proper experience on the job market, with ages ranging between 23 and 39 years of age. We are more digital than the generation before us, as the generation after us is more digital than us (the digital natives that grew up from a young age with phones, tablets and internet). Are we more capable of leading the digital transformation? Some would argue, but it’s hard to find a 25-year-old person with enough actual leadership and organisational experience to lead a transformation process in a decent sized company.
I’m a big believer in steering committees as an effective way of bringing together the competence needed. If supported with proper C-level involvement, decision power and a focus on execution, it’s the most effective way to run projects and organisational change. The steering committee can also be open to outside consultants or internal stakeholders on a need-by-need basis, bringing in the competence needed in different stages of the project.
GET THE BASICS RIGHT, TODAY
I’ve recently joined in on a strategic process with a company where the planning operation has been going on for a little over a year. Customer centricity is the key, and everything the company does is all about the customer. Everyone involved has been extremely focused on ironing out the strategy, talking about customer experiences, and exploring platforms and systems that will hopefully set them ahead of competitors. The bar is set high, with all eye set on industry-leading customer experiences. We’re talking extensive investment into technologies and processes to fulfill this new strategy.
Meanwhile, we’re failing on the basics. We have lousy opening hours, a 3-4 day response times on email, and a culture with little focus on customers. The board had no idea on what their actual customer experience was like, before we performed mystery shopping and interviews with customers.
You don’t need a strategy to tell you the obvious things – just do it. When you’ve decided on the strategic direction, start harvesting some of the low hanging fruits. Get a head start, pave the ground for a new strategy and stay out of the strategy limbo.
Get in touch with us today to find out how to move your business into the new digital age!