In my last blog post on this topic (now edited), I outlined why I believe Digital Business will be so disruptive, and that we are seeing the emergence of an entirely new competition. This new game won’t be one in which the big eat the small, but rather one where the fast eat the slow. That thought isn't original with me, but I think it is illustrative. In a world where consumers have choices, and in which platforms and capital are cheap, your organization’s competence at sensing (or learning) the consumer’s interests and responding effectively in a timely way will be the defining competitive advantage. I recently saw Jason Silva perform (I think that’s the right word) at EMC World 2015, and it was amazing. To get you in the right mindset - please do take the time to watch these four very short videos. Regardless of whether you agree, I guarantee you will find them entertaining.
There is tremendous reason to believe that this will be incredibly disruptive. (yes, I know that word is getting tiresome, but it fits so well.) I’m going to call it the Digital Tsunami. Yes, it’s a tad dramatic, but there are parallels. Both start slow and gradually, and will eventually crest and pass like all waves. However, underestimate a big one at your peril. The sheer speed, weight, and destructive power are impressive to behold. I really do believe that the majority of organizations aren't reacting at all, and are focused on making self-soothing sandcastle “strategies" and hoping small tweaks will be enough to help them weather the storm.
However, to extend the tsunami analogy a little further - eventually these companies will wake up to the reality that they missed the warning signs, and the wave is bigger and more destructive than they anticipated. At that point, it’s likely to be too late. Those who had the foresight to prepare while they could are going to fare much better.
Effective preparations take time. Why was Blockbuster unable to build their own Netflix? Because by the time they realized they had seriously underestimated their upstart competitor, it was too late. They couldn’t experiment and iterate fast enough. Like a man trying to sprint to higher ground, they found running in the sand to be slow going initially. All organizations need to adopt a greater sense of urgency about this. (As a quick side note - It’s been gratifying to see the progress that EMC is making to deal with our own industry changes.)
So, what would preparing for the digital tsunami look like? Three mutually reinforcing general categories, all focused on building the capability of the organization in preparation for what may come:
1. Learn to “sense” what's happening through real-time access to information and prescriptive analytics
2. Learn to “respond” to (or act on) those insights by building excellence in software development.
3. Remove the barriers to innovation and agility within your organization now, and begin anticipating a world that demands highly personal and magical products.
1. Learn to “sense” what's happening through real-time access to information and prescriptive analytics
2. Learn to “respond” to (or act on) those insights by building excellence in software development.
3. Remove the barriers to innovation and agility within your organization now, and begin anticipating a world that demands highly personal and magical products.
Just as in sports, we need to build our muscles, endurance, and agility in a general way now, in preparation for the more specific challenges that are to come. So, what would workouts for digital business look like? Not all of what follows will be applicable to your organization depending on what sector you work in, but I believe organizations are replete with individuals who want to be challenged, and layers of bureaucracy that can be dispensed with.
Many of the thought experiments below can be explored very inexpensively. Why not offer a week of bonus time off to anyone who can show you a solution to one of these challenges for less than $500 in company outlay?
Many of the thought experiments below can be explored very inexpensively. Why not offer a week of bonus time off to anyone who can show you a solution to one of these challenges for less than $500 in company outlay?
If you are a CEO/CIO/CMO/VP Sales, or similar leader - give your folks a shot. Ask your hi-potentials if any of them want to take on one of these challenges as part of a cross-functional team. Give those teams who are willing to step up a $500 visa gift card, and ask that they present their findings in two months, along with receipts. The only caveat would be to ask that they be wary of putting any sensitive data (HIPAA, financial, etc) at greater risk of breach. Beyond that - what’s the worst that could happen? I guarantee you’ll be shocked at how happy and motivated some of your folks are to take the ball and run with it, and how much happier they are to feel like they are making a difference. I’ll bet the findings about who steps up and who won’t make eye contact would probably be worth $500 to most leaders, all by itself. I’ll bet breaking down departmental walls and establishing cooperative relationships based on shared experiences would be worth the money, too.
Here are the sorts of things organizations should be thinking about. Believe me when I assure you, that every single example I’ve listed below is already being done to good effect. Nothing here is science fiction. If you think I’m joking - hit me up on twitter (@always_pivoting) and challenge me on that. I’m not saying that these are all things every company should do, or even very many of them. However, if your people have the capability to do these sorts of things and have developed these competencies, you will be much more prepared than most. Find their equivalents for your organization, and start putting in some time in the weight room. Yes, it won’t be free. Yes, some glass will get broken. Some toes will be stepped on. The saying goes - no pain, no gain. But trust me when I tell you that some pain of your own choosing now will prevent worse pain later.
Learning to Sense
Know The Consumer
Can you tell when they walk in your door or before you pick up the call - who they are, what they have bought from you, what they make, where they live, what their interests are, who they are influenced by, and how many people they influence?
Can you tell how much they are using (utility value) of their purchases from you?
Can you tell if they have never been to your store or any of your stores before?
Can you tell from other customer's purchase histories what this customer might need or want next?
Can you tell where this customer is looking online, where they frequent, what news sources they care about, and what other services they consume?
Could you assess whether this customer is happy with you, or upset?
How could you capture more complete data about their experience with you?
Can you assess on a daily basis from data how likely your B2B customers are to renew service contracts with you?
Can you tell where the consumer was before they came into your store, and where they went afterwards?
Can you continue interacting with a customer after a sale? How could you create opportunities and conduits for conversation?
Know Your Self
Who are your best customer service people? Who from CS has the highest correlation to csat escalations and complaints? Who has the least?
Can everyone see all the aspects of the customer experience? Does that person in CS know the customer is coming up on renewal time? Does the VP of sales know this customer recently had two customer satisfaction events? Do the contracts renewal people know you delivered two shipments to them late recently? Does the sales executive covering that account know about the three support issues they recently had? All that data exists within your four walls. What stands in the way of the people who need the information getting it?
Which of your products drive the highest % of profit? Which ones compete at the high ends of their markets, which are more susceptible to substitute (alternative replacement) products? Which ones are the low price/feature entrant in their segment?
When was the last time your company intentionally sought unbiased feedback from existing and (more significantly) potential customers? What about customers of competing or substitute products?
How literate are your decision makers in regards to social media? Is anyone tasked with paying attention to the meetups, social chatter, memes, and communities of practice that exist around your products or segments? How are those lessons being filtered to the people who could do something useful with the information? Do the people in those positions understand the value of that data, or does that very experienced VP still disdain “Tweetbook" as pointless "thumbs-ups" for people’s restaurant preferences? I had the good fortune to hear Peter Sheahan speak at an EMC event in person. I highly recommend you watch the whole video, but in regards to the point I’m trying to make - check out the section beginning at about 17:00.
Know The Playing Field
If there was a sudden demand for an item you sell or a service you offer, how long would it take for you to pick up on it?
Could you determine while still within the current reporting cycle whether low or high demand for a product or a service was because of your performance, or a trend in the market in general?
What would be your first indicator that customers were buying a substitute product (another class of thing) in place of something you sell?
What would be your first indicator that customers were buying your product as a substitute in place of some other class of thing?
How fast could you detect the leading results of CNN running a positive article about you?
Are you able to identify mentions and articles regarding you or your products within 2 hours of publication? Social posts within 10 minutes of publication?
Could you quickly sample public sentiment about your brand or product?
If there was a public relations victory or debacle next week, would you be able to accurately quantify and communicate internally the impact within 48 hours of the event, and every 6 hours after that?
Know Your Competitors
What would be your first indicator that a new entrant came into your market?
Can you accurately assess your competitor's performance in your product markets, and the trend line?
Can you assess public sentiment toward your competitors on an ongoing basis?
Do you know who your competitors largest net promoters/mavens are?
Can you see what social feedback is happening within your competitor's walls?
Can you tell who your competitor's best and worst employees are?
Timely and Effective Responses
Internal improvements
How fast does a developer get access to the raw materials they need?
What are the lead times from when a developer has code ready to test, until that code is running and tested in a production-like environment? (Definitely do watch Jez Humble’s excellent talk on DevOps - wish I could find the video of this presentation at EMC World- sigh.)
How rapidly could you sense a change in demand, and scale to meet it?
What is your success rate with IT changes?
Not counting the coding and testing time, how rapidly can requests for features or enhancements go from request to production? Quarterly? Bi-annually? Less often? If you had to change a single line of code currently running in production, how long would that take you?
How could you offer your products or services on-demand instead of by selling them?
How could you directly offer the end result your customers are buying your product or service to produce? How would you go to market? Who would you need to displace? To bring on-side?
If you are a B2B2C, how could you move to B2C?
How could you deliver your entire value chain (from the perspective of the customer) in 10 minutes?
What parts of your raw-to-cash process add no value at all?
Customized Products
Can you dynamically tailor a product to a specific customer's tastes? Color, size, optional features, etc?
Can you offer a customer rapid delivery (<24 hours) for something they want that you don't have in store?
Can your products be easily personalized to the individuals name, location, social media interests?
More and more of world consumption will be outside of the Americas and Western Europe, as more rural Asian and African consumers join the conversation. You will want the benefits of scale, but the flexibility to adapt quickly to local tastes and trends which will be every bit as transient and peculiar as those in your home market. How can you release to your local teams all the latitude on personalization, marketing, and product mix that they will need to respond to local conditions without obtaining unnecessary approvals?
Enchanted Objects
How could your products or services communicate with other products or services your target consumers use?
Could you offer choices in home automation standards, preferred API sets, and desired reports?
What things do consumers do before and after they use your product or service? How could you remove the friction of using your product with that knowledge?
How could your product or service anticipate what they consumer will want, and when they will want it?
Fueling Innovation
Do all employees have the ability to form their own ad-hoc data projects?
Can you get feedback from customers on product features and style, and rapidly funnel that into product development?
How could you get the most, and best ideas into production with as few egos and approvals involved as possible? How could you do it in an evidence-based, data-driven way?
How can you create separate units or channels through which internal teams can innovate without politics, fear of cannibalization, and vested interests squashing the nascent idea?
That’s a long list. Again - these are just meant to start you thinking along the lines of what future capabilities you may need. These are meant to be exercises. When you see business opportunities that matter to you - there are great ways to get started. But for now, pick a few of the above that resonate the most with you, and start your own internal “digital olympics.” Start getting your organization in shape now by doing some digital business calisthenics. In the book It’s Not The Big That Beat the Small, It’s the Fast That Eat the Slow, the authors talk about how fast organizations don’t have to prognosticate far into the future, they just have to act on emerging trends before their peers.
Because remember, in the coming Digital Tsunami - survival isn’t mandatory.
