Digital transformation is a daunting challenge for any leader.
In today’s volatile business climate, 9 out of 10 companies are thinking about digital transformation. But—even knowing they’re engaged in a battle for their company’s future—many leaders dread the prospect and hesitate to act. It’s like turning an ocean liner. It can’t happen quickly without losing a lot of momentum. But a captain won’t keep heading toward rocky shoals! He knows the earlier the course change, the less harrowing it’ll be. That’s how leadership has to approach the transition to digital. But a little inspiration for your transformation never hurts.
It WILL be disruptive. That’s the point, after all. Changes to infrastructure and applications cost time and money. Training staff in digital marketing capabilities, customer-insight gathering, analytics, optimization, new tools and ways of working takes their focus away from the company’s day-to-day need to achieve revenue goals and deliver value for shareholders and customers. But these distractions are relatively short-lived. And they’ll result in a company well-positioned for success in a new world.
Digital companies leverage real business value from…
- Customer insights that drive better customer experiences.
A new level of understanding of their needs, the ability to recognized them at multiple touchpoints and personalize content and actions to that moment.
- Real-time inbound data that enables faster response to market dynamics.
Take action on new trends. Seize unexpected opportunities. Get ahead of slower-moving competitors.
- Nimble, flexible infrastructure that changes as the business changes.
Scale up and down with economic or seasonal swings without stress or waste. Expand into new business areas quickly without changing datacenter hardware.
Even the most entrenched firms can pull off astonishingly effective changes.
As the pace of digitization quickens in the market, some industries, such as retail, hospitality, travel and transportation have already been dramatically disrupted by digital native firms. These firms create new business models that meet the same need as traditional companies but at lower cost and with better customer experience. Other established companies are realizing the winner-take-all nature of the new business environment and, rather than wait to be overtaken, they have successfully reinvented themselves as digital businesses. Here are some of their recipes for success:
1. Walmart changes from a staid, pure-play retailer to an omnichannel powerhouse. In less than 4 years, the company transformed into a credible challenger to Amazon’s shopping juggernaut. This involved 4 key moves: Bringing development in-house to build a flexible, custom, cloud-based software stack, including user insight and search engines. Acquiring platform experience and savvy CEO Mark Lore along with Jet.com. Partnering with Google Assistant to take a leading role in voice commerce to combat Amazon Alexa. And, playing to core a strength: a store (warehouse) within 10 miles of 90% of Americans, which creates a ‘click and collect’ advantage.
2. Pitney Bowes rises from the mail room to cloud services leadership. New CEO Mark Lautenback took over a postal-mail business in decline. Evaluating the company’s advantages, he realized expertise in shipping, commerce, payment, data management and customer identity could be leveraged to create something new, useful and close to their values. Always a customer-driven firm that aligned CX metrics to roles at every level, they launched a commercial version of their own new, internally-developed digital stack, providing data-driven customer insight to help businesses serve the needs of today’s hyper-connected customers.
3. JPMorgan Chase develops its way to a digital lead. For the last 5 years, CEO Jamie Dimon has been vocal about leading his sector to put the customer first, supporting his intention with billion-dollar budgets. Real culture change started with a huge Digital Lab collaboration space that now houses over 700 developers. Since introducing the Chase mobile app and Web site redesign in 2014 to customer raves, the team continuously improves with data-driven user-experience updates to the app, Web site, intranet and back office systems. The Lab supports and partners with some fintech startups while taking the battle to others.
4. Cary, NC improves residents’ experience with customer insight. The town consolidated more than 100 different legacy applications to handle operations and replaced the outdated software with a Customer Relationship Management platform that delivered a complete view of citizens and dozens of operational details. The town can now understand and react quickly to peoples’ needs. They also recruited a development team that leverages agile and design thinking to rapidly prototype and iterate on the CRM platform, Web site, a textbot and an Amazon Alexa skill which allow people to request services.
Successful transformations yield valuable lessons and inspiration
If a 55-year-old retailer, a 97-year-old postage meter company, a 65-year-old bank, and a growing southern town can execute a digital transformation, then any firm can. Innovation and forward thinking don’t have to come from a company’s history, they come from leadership. Though these enterprises couldn’t be more different, their transformations have common elements that brought them success:
- Drive Transformation from a C-Suite that understands the stakes
- Prioritize investments in transformation over quarterly revenue
- Move infrastructure to the cloud, get flexible
- Bring development in-house. Leverage Lean and Agile methodologies
In next month’s post we’ll dig deeper into these elements and make some recommendations about concrete steps to take. Till then, I’d love to hear your thoughts and comments. And let me know if we can help your firm with your transformation.