Is digital a divider or leveller?
Of late, I have had a chance to converse with a few mid-tier corporates about their survival anxieties and a near panic-stricken desire to use technology to transform their businesses.
Sadly, many traditionally successful businesses believe that they will buy themselves a lease of life by doing one or more of the following:
1. Putting up a website with or without an online store
2. Developing an app for their customers
3. Subscribing to a software that automates or improves the operational efficiency of some of their process, usually a customer facing one
4. Having a social media presence & advertising on digital media
5. Copying the front-end models of their younger digital-first/only competitors
I say sadly, because these changes, while being essential by themselves, do not address the core issues that are holding back the transformation of mid-tier companies in competitive businesses.
Fundamentally, those core issues are:
1. Ad-hoc and gut-feel based decision making
2. Silos of information and disjointed workflows
3. Metrics that measure transactional efficiency
In my view, traditionally successful businesses can leverage modern methods (and not just technology!) to springboard themselves into leadership positions. Such an approach should be based on the following pillars:
1. Data-driven everything:
Like somebody famous has said - data is the new oil. Set-up systems to measure, store, compile and analyse all the data that gets generated in your eco-system. Customer interactions, sales invoices, purchase POs, ERP or even accounting records, machine logs, industry data that you subscribe to, think of them all as oil-fields that you own. Digital first companies harness the power of knowing minute details about intelligently grouped customers for everything from product planning to sourcing to marketing and customer service.
2. Connect the dots:
Data has a multiplier effect on insight and actionability. Overlaying data from one source with other sources produces magical results. Take a simple example of connecting a sales funnel with historical billing records can improve goal setting at a customer level, better forecasts and more targeted offers making the entire sales cycle faster and more productive.
3. Focus on digitalizing the back-end at least as much as the front-end
Setting ‘unrealistic’ goals of operational efficiency forces legacy businesses to adopt agility, design thinking and digital means where they matters the most- in the heart of the business. The razzmatazz of digital marketing is a mere smokescreen if the business operations are still 20th century.
4. Change begins at the top
Behaviour is the most difficult to change because it does not have an end-date and because money can’t buy it. Top management/owner managers have to begin by consciously adopting a more data and process oriented style of working. Often, having a trusted external entity like a coach to act as a guide can help getting the change started.
TL;DR, we live in an unprecedented time when thousands of painstakingly built businesses face the danger of extinction because their way of coping with digital disruption is piecemeal and front-end focused. There is heavy lifting to be done in the operational core. That calls for an approach centred around 4 pillars – Data-driven everything, Connected data & people, focus on back-end digitalization and behavioural change at the top.
What do you think?