We’re living through something we haven’t experienced before. The longer-term impacts are unknown, but we can safely assume that the world won’t be exactly the same again. Some consumer behaviors will change forever, and whole swathes of the economy will have to fundamentally adapt their models to survive.
The world of business is being reconfigured in front of our eyes. Some sectors, like retail and travel, face uncertain long-term prospects. Others, such as healthcare and higher education, could capitalize on changing consumer expectations if they can build a truly digital business.
For most companies it has become harder to devise long-term plans, because these plans are normally built on assumptions about a relatively stable and predictable world.
For more than a decade, big corporations have been willing to embark on expensive, long-term digital transformation programs. These programs often address what the company should do with digital, but not why. As we face ongoing uncertainty and disruption, it’s the right time to create a new digital operating model designed around adaptability and value creation.
Stop transforming, start adapting
With the relentless rise of the digital economy, ‘digital transformation’ has been a mantra in boardrooms across the world. Short-term missteps have been allowed because they are outweighed by the longer-term gains.
A whole industry has been built around long and expensive transformation project. But these projects do not always deliver on their promise. Last year, Hertz sued Accenture after paying $32m for a new website and mobile app that had allegedly not materialized after two and a half years.
In a world where uncertainty is the new normal, companies can no longer afford to commit to multi-year transformations, because there is no guarantee the world will be the same when the project is delivered. Instead, companies must build their organization around an ‘adaptive strategy’ mindset at every level. That way, the organization is more prepared to respond when the world changes.
To embrace an adaptive strategy mindset, companies must build integrated capabilities across data, product delivery and customer centricity. Here’s how.
Make data the connecting thread
Everyone’s talking about data. But data alone won’t move a business forward. Unless companies can extract meaningful insights about the market and the customer, they won’t be able to get ahead of the competition.
What’s needed is a strong connection between data science and strategic decision-making. Companies need the ability to mine data for consumer insights, but they also need an organizational commitment to using data as a strategic decision-making tool. Senior leaders need to hire data scientists and learn how to ask them the right questions. And data scientists need to learn how to think strategically and creatively about the data they work with.
Only then can they figure out how to derive true value from their data by creating more targeted, more personalized and more valuable products for their customers.
Apply a product mindset
Customer Experience should not be thought of as a business function or a ‘department’. Instead, companies must approach the customer experience the same way they approach product development – by bringing together research, design, engineering, marketing and operations. It’s the only way to make sure the customer experience (the ‘product’) has a clearly articulated market fit and can be operationalized, scaled and adapted in line with changing customer behaviors.
Companies must hire strategically minded Product Owners that can lead across disciplines. They must be ready to listen to the data, apply design thinking to solve customer problems fast, and to course-correct and pivot multiple times if research tells them they are wrong. The end product may be something different to what they thought they were building because they learned from the data and customer insights.
Let the customer unite you
Some companies are already moving away from a project mentality and building truly integrated, cross-disciplinary product teams to evolve their digital experience ecosystem. But many companies are far behind – and unless they act fast, they will only fall further behind.
In these times, perhaps more than ever, it’s time for companies to double down on building a digital business that delivers a true value exchange with customers. When facing siloed teams with different priorities and agendas, teams must take a step back and find a way to work together on solving customer needs. It will realign their priorities and help them pull together around common goals.
These are uncertain times, and companies need to be more adaptable than ever. Companies should start by focusing on the data, adopting a product mindset, and getting closer to their customers. The result will be greater value creation in your digital ecosystem. In turn, this will make you more competitive and adaptable in good times and bad.
CEO, Hugo & Cat