New buzzwords get invented every year within the consulting business. I see two reasons for that. Consulting companies need to sell more so they invent new words. And the other reason is that people need to feel important. They want to throw fancy words around since it boosts their ego. I cannot count how many times I have been to conferences where the speaker thinks he is the shit. He throws these big words, big data, agile, customer experience etc. and all of these things are simple things that have been around for ages.
Buzz words are not new, they are new name of old things
Take for example digitalization. What does that mean? Digitalization and is actually the same thing as customer centricity. Customer centricity in 2017 means that as a company you need to deliver what the customer wants on the platforms the customer uses, hence mobile and computers.
Another word that is thrown around a lot is agile organisations. Agile organisations have always been in demand – those organisations that can react fast enough to customer demand. The main difference between todays market and say 30 years ago is that digital platforms offer new ways to do things. Today content is king and just in time is more important than ever. Your content builds relevancy, which in turn grows your business.
So everyone stop obsessing about fashion words. Do not throw them around like pennies. Most people have heard them but don’t understand the true meaning of them. Instead talk in simple terms such as what do customers want, how can we produce quickly, how do we generate value etc.
There is a lot of talk about agile organisations but what no body talks about are that your management layers will hinder your agile organisation. There are countless examples from people that I know that tell the same story. Top management need to do something to react to todays challenges so they jump on the agile-organisation train. They take in a consultant make a lot of workshops, change the organisation but keep the top management levels intact. What happens? Basically nothing. Things work as before but now with an agile twist. To be true agile decisions need to be taken by the most suitable people on the floor and not a manager. Old organisations are unfortunately not built for agility but rather like a pyramid leading to several implications:
1. One of the most important implication is that top managements is to far away from your customers = death in the long run. Family businesses that grow large survive as long as the owners are active since the owners have built the company from the floor and up. As soon as the owners are removed bureaucrats and career minded people take over and suck the life out of a company.
2. Pyramid organisations get into autopilot. Auto pilot mode is dangerous since you will not see what will hit you until it is too late. For example Netflix has caught many broadcasting companies by surprise and they are now in a downward trend. You also spend more time on processes than on innovation.
3. Too many management layers lead to politics. Politics consumes your organisations energy. Your energy should be focused to solve customer problems and innovate the next thing.
4. Management layers are the kryptonite for agility. Agile means that you react to your customers. How fast you can react depends on your organisational setup.
The organisation that I think have the best setup is actually Google/Alphabet. The setup is so smart that the output can be seen in the number of innovations that comes steadily each year. It seems that Alphabet can do anything they set out to do.
Customer experience is becoming the only game in town. You can do a thousand of things within your organisation but if your customers haven’t noticed then you have failed.
The above statement is today’s harsh reality we live in. Everything is spinning faster and new technology opens up for attacking your business. This is especially true for companies within the B2C field. To cling on you need to grasp the importance of customer experience and the role it has in tomorrow’s market. Companies that do not grasp its essence will eventually diminish. One company that gets it is Amazon. Google on Jeff Bezos letter to shareholders and you will see his restless championing for the customer.
The person that should be the champion for your customer experience should be your CEO. Your CEO is the captain of your ship. The captain holds the wheel and sets the course. Since todays environment is so competitive and fast the role of the CEO can no longer be only to work with high-level questions. Todays CEO need to get their hands dirty, they need to care for the details of the organisation, understand the customer and understand the key components that drive growth. One of the main areas that only a CEO can influence is to setup an organisation that is fast and makes the right decisions with minimal management involvement.
The CEO together with the employees needs to figure out what parts of your customer experience that drives value. Thereafter you need together with your employees setup a direction on what you are aiming for. Doing this will have several effects:
o You will start delivering true value to the customer that will turn into growth.
o As a CEO you will understand your business and be able to make better decisions. You will be able to ask the right questions towards the organisation. This will make everyone smarter and more focused.
o People will be super motivated with a sense of purpose. As a CEO you will then have a smooth organisation that will be self-sustainable.
A company is of course more than just one person but the higher up the more you can influence the outcome. In the end the only thing that counts is what your customer thinks. So if your CEO is not passionate about customer experience, then you are most likely screwed in the long run, so you better start looking for a job now.
Working in a highly recognized brand once reputation is extremely important from many aspects. A positive brand helps drive sales. A negative hinders your sales.
It strikes me how similar this is in todays elections in the USA. People say that they do not like any of the candidates since their reputation is bad. Even though they feel that they have no choice. A bit like companies in various segments of the market especially markets with oligopoly (like banks, oil companies, etc).
In our case we partly sell due to the lack of alternative. The lack of competition. The question is how long will this hold. As soon as something better comes along you are done. The same thing is in politics. When something or someone comes along that is perceived as better as a political party you will not be able to react. Reaction has to start when you are the fatest cat around not when you already start loosing weight.
So the learning for any company out there is to get your innovation engine going. It can never stop especially in todays fast environment. Setup your organization accordingly. Get specialist, work with the culture but everything begins with asking the right questions.
So, would you say that you work in a digital company? I have now had experience with purely digital companies and non digital companies. With purely digital I mean companies that their entire business model is born in the digital world, like Spotify or Zalando. My current company is a traditional lottery with an offline business model, like traditional advertising, telephone sales, print advertisments etc.
There is a big difference working for purely digital companies and companies that try to get into the digital space. As we devolp our digital presence I have found three key difference between the two business models.
- Digital businesses are rigged to be digital. Nondigtal have to transform themselves which is a major task. To transform your business is probably one of the hardest parts. Ask Nokia or Kodak. Both giants in their fields with extremely bright people in the organisation but both of them did not manage to transform themselves into the digtial space. To throw money on consultants and technology is not enough which brings me to my next point.
- Digital businesses have digital leadership. The leadership have vast knowledge in the power of the technology and the pitfalls. Non digital companies struggle to understand how to take full advantage of technology. The digital landscape is constantly change and the pace is picking up. This means you need to invest heavily in technology and people.
- Fast and smart. The bigger the company the more complex everything is and this slows you down. But in the same time if you put your main platform in place you can rigg yourself to be a leader in the market instead of follower. You have to be smart enough to see the major trends consumer adopt. Facebook, Google and Apple are extremly good at this although they are hugh companies with hugh organisations. Non digital organistations have a much slower development cycle since their business has been ”slow”.
Of course digital businesses come and go, so being in the forefront is not a guarantee to survive. A lot also depends on timing but one thing is for sure. The digitalisation of our society touches all businesses, even lotteries.