‘Digital’ is the new thing in enterprise organizations, while ‘Agility’ is a phenomenon that comes naturally to the new age start-ups. How can the large enterprise organizations embrace ‘agility’ and be ‘digital’ despite the baggage they have? What tell-tale signs should they look for and what pitfalls to avoid when adopting the digital revolution?
Despite all the evolution in business models & technology, what Michael Porter said still remains true — ‘Strategy is about making choice’. Strategy is still about identifying and acknowledging the uncertainties in the playing field. In this digital age should you engrave your choices in stone? Or should enterprises adopt an agile approach?
What should an enterprise, one with high market share & high margins today, do as the digital revolution impacts its business goals?
What haunts large & leading enterprises?
In the “Buyer’s Market” today, democratization of access to information has given customers (b2b and b2c) a much higher bargaining power. They have the ability to easily compare and contrast offerings and prices. In terms of availability to guidance and insights, there is a lot out there (which can even be counterproductive — confuses rather than clarifies customers). This challenges the large enterprises’ role as a trusted adviser.
There is undoubtedly, increased entrepreneurial activity across industries. In the digital age, “as a service” businesses and API economy have given a boost to reuse and collaboration. This enables smaller organizations to be nimble and go to market quicker.
Based on insights from McKinsey, two-third of respondents said their business environments were characterized by ‘rapid changes’. Yet leadership teams in these enterprise organizations are still stuck in traditional management practices.
These challenges create an inability to see shift in customer needs, resulting in reduced willingness to pay for ‘gold plated premium technology’. ‘Good enough’ solutions start to be available. They have the ability to change with evolving business needs. This further puts pressure on market share and margins, losing the ability to adapt and grow. It leaves the workforce uninspired with the lack of a clearly articulated vision.
The Solution Space
The key enablers in the solution space are the following.
The Solution Space
Market first, get the basics right
Digital brings several ways to achieve this. Remember the last time you bought a TV? You researched on the internet, made top three choices in your head and then walked into the local retailer. Even better, ordered online! To hook into the buyer’s journey, it is necessary to integrate ‘digital’ in an enterprises’ communication channels in a meaningful way. Online presence and the associated tools allow us to know our customers better . It tells us what they are looking for versus what do they not care about. Integrating these tools into the business processes of the enterprise unravel new requirements of our existing customer segment . It ensures we are not caught off guard with the evolving business needs. eCommerce players are the best success stories to look towards for inspiration. Being an online marketplace they gauge demand for one vs. the other product in the catalog.
This gives an overall understanding of the context of customer at various digital touch points on the website. Customers could be looking for information on products or reassurance though case studies and testimonials. They could be trying to gauge if you can be a trusted long term partner through thought-leadership blogs. Alternatively, they might want to check out what service levels you can offer starting with the chat bot on your website.
Customers care about getting their job done. so delve through puddles of data on customer interactions to unravel insights on what they want solved. Consequently, you would create either a plain vanilla feature, a more efficient means to serve or a new on-boarding at the speed of light!
Use insights from digital channels to influence the market offering, outward communication and long term strategy. It will assist sustaining the trusted adviser relationship.
Technology elements, revisit “Product Development”
Two key areas to look at are the product development & deployment processes and adoption of analytics/AI and APIs in product development
Product development processes
Instead of maintaining bespoke teams & software stack per customer, in order to gain efficiency in development and maintenance costs, create a ‘product platform’ — a common base to build upon from ground up. This forces Product teams to not customize the product to every customer need. Instead take a step back and understand how and if to solve a specific customer need. Saying ‘No’ to a customers’ feature request is a whole topic in itself.
Management teams must sponsor adoption of modern day practices in product development & deployment. Companies delivering hardware products should evaluate rapid-prototyping processes using 3D-printing to shorten customer feedback cycle. Like in the case of SaaS based companies, where development and operations meet (a.k.a DevOps), build ability to go live in production hours, minutes maybe seconds after a code-change has been committed to the pipeline. These drastically improve the ability to serve customers.
Analytics/AI and API
Complement this with Analytics & AI, integrating the ability to monitor usage, product failures, cumbersome UX interactions and unused features — all help making smarter product decisions (help you kill those darlings!). SaaS based solutions have given a boost to the API economy. Kill the NIH (Not invented here) syndrome. It will ensure rapid delivery of services and allow experimenting with new solutions. Partner with players that already solve problems that are a small part of your larger offering.
Adapting to the next generation product development methodologies & technology elements will create technology readiness and flexibility for the future.
Culture is key, willingness to change is a must
The starting point is the management team itself. Accept reality, own up to financial situation, organizational mess and take tough decisions in the need of the hour! Helping them in the process could be internal strategy teams — make them visualize the need for change and the impending disruption at the next turn! It is crucial to be in the same room, have the tough conversations backed with evidence and challenge the ‘the highest paid man wins’ syndrome.
Crossing over the first hurdles of denial & decision-making is followed by that of organizational communication. There is a need for increased transparency at all levels of the enterprise. Management teams have to personally acknowledge that the troops need direction and then further invest time & energy in delivering the message to the enterprise (via all-hands meetings, emails, videos …).
Follow-up after actions are delegated, just like project management 101. It creates the need for reporting and asserts accountability, a key aspect in change programs resulting in appropriate implementation.
Communicating the corporate vision, the action plan and objectives within the organization inspires the workforce. It kills cynical conversations at the coffee corner and each time gives everyone a common vision to work towards proactively!
Wrapping up
Large enterprises need to look deeper in the areas of Market, Technology and Culture to embrace the digital revolution. Listen to market using a set of digital tools, align internal processes to deliver on evolving future needs at an affordable cost base and develop an inspiring change-driven work environment. Choices in these areas will help them to re-establish their leadership positions in their markets, will enable to re-invent themselves and will plant growth engines for the future.