True digital transformation starts at the top of a company. It starts with a focused vision. Often created and led by the senior-most employees. And then carried out by the mid and lower-level employees.
This is not to say that mid-level executives cannot bring about transformation. In fact there are plenty of such examples where executives have digitally transformed parts of their businesses. But they are almost always confined to the boundaries of their own units or departments. Unable to break through silos that so rampantly exist in companies.
So it turns out that the top management has to be in the driving seat for a global company wide change to happen.
A digital vision can focus on any of the three approaches:
1) Redefining Customer experience
Many companies choose customer experience as their focal point for digital transformation. But there is no one set way to do it. For customer experience itself can be redefined in many different ways:
a) Delivering an integrated customer experience through digital
When Burberry took the digital road to rebuild itself, its aim was to seamlessly blur the lines between physical and digital – create multi-channel coherence. Today Burberry is known as a fully digitised luxury brand. From interactive mirrors that transform into personalised screens to virtual smooches, the company has transformed itself digitally by focusing on creating an integrated customer experience.
b) Improving service to customers through digital
The low-cost carrier Southwest Airlines has been continually using Big Data to improve and determine which new customer services to implement. The airlines is apparently using speech analytics to extract value-rich data from its customers. This helps them explore customer sentiments and how they feel about their experience with Southwest in comparison to other competitors.
“By observing and looking into customer behaviours and actions online, we are better suited to offer our travellers the best rates and experiences possible. We also use this data to support the evolving relationships with our customers,” said Dan Landson, a company spokesman.
c) Using digital to understand customers better
LEGO uses its online presence to understand its customers better. One brilliant example is how it allows its members to co-create products that they would like to engage with. For instance LEGO Ideas is an online community that allows members to create their own design sets and vote on submissions of others. If a proposed set gets 10,000 votes, then LEGO reviews it and picks a winner whose set is created and then sold worldwide. The creator earns a percentage of sales and gets recognition as the creator on all packaging. Thanks to digital, customers are involved from ideation to creation to validation at LEGO.
d) Changing lives through digital
While big pharma companies are still struggling to go fully digital to make an impact on the lives of patients worldwide, there are smaller players that are rapidly changing the health landscape.
Be My Eyes is one such example – a social network that connects blind users with sighted ones. The app provides on-demand help to blind users with simple everyday tasks, such as reading the expiration date on a milk carton or directing to a road sign. It offers a wonderful opportunity for sighted people to help those in need, with a quick swipe on their screens or a few minutes of facetime.
2) Redefining Operations
Companies that lack efficiency in their existing operations usually put their digital focus on redefining operations. For it is in the interest of every executive in a company to have a more transparent supply chain. This allows them to break down silos, form new collaborations and increase the speed of decision-making across the organization.
Boeing has been focusing its digital efforts on achieving operational excellence. And it believes that the future of aviation lies in creating ‘digital airlines’ using advanced analytics and artificial intelligence. Its collaboration with Microsoft is aimed to improve commercial aviation by enhancing factors like predictive aircraft maintenance, fuel optimization, airline systems and the overall cabin passenger experience.
“There is great potential between the connected traveler, the connected airplane and the connected operation, and their interplay,” said Andrew Gendreau, director of advanced information solutions in Boeing’s Digital Aviation division. “Globally, airlines spend about $700 billion on operating costs, and there’s about $700 billion in revenue. So airlines are a very competitive business with profitable but narrow margins; leveraging data and analytics not only improves performance and experience, but will give airlines a chance to sustain profitable growth.”
3) Redefining Business Models
Companies often create new business models by combining ideas around operational processes and customer experience. These newly defined business models can either be an extension of the existing ones or a complete departure from the old ways of working. Such a digital transformation takes one of the three approaches:
a) Defensive: Companies that are under the threat of being rendered obsolete tend to take a defensive approach, often focusing on their long-term survival. The pace of change in their industry is so fast that they must either face death at the hands of new technology or redesign their existing business models.
The extinction of street travel agents is a perfect example of how the Internet has forced the travel industry to adapt and embrace new technology. Even the biggest of travel agencies have had to step up their digital efforts to woo customers. Browsing through travel brochures or reading through Lonely Planet guides are no longer sufficient hooks for booking a holiday.
Travel stores are facing oblivion. But thanks to virtual reality, Thomas Cook is now offering ‘try before you buy’ tours in some of its stores to bring back the lost sheen of its business. By simply donning a headset, customers can now experience a slice of their holiday destinations before actually paying for them.
b) Offensive: Companies that actively seek opportunities to create digitally powered business models tend to adopt an offensive approach. In such a case, a company does not have to brave through a crisis. In fact, executives in such companies enjoy the luxury to experiment with new digital approaches.
H&M, an established fast-fashion clothing brand, is actively looking to make recycling ‘cool’ for creating a sustainable fashion future. The company aims to focus on behavioural change by encouraging consumers to recycle their unwanted clothes. Any piece of clothing or textile that is not needed can be dropped off at any local H&M store and given a new purpose: This campaign is helping them win the hearts of not just fashion-conscious but also environment-conscious consumers, thus helping them break into new customer segments.
c) Disruptive: These are companies that do not wait for challenges or opportunities to redefine their business models. These companies create digital visions to drive the industry wide shift.
The ecommerce software platform Shopify has simplified the shopping experience to a new level. How? By realizing the retail potential in three of the world’s biggest social hubs: Facebook, Twitter and Pinterest. Shopify has introduced buy buttons on social media to empower small-time business owners in boosting their mobile and online sales. Now anyone can post products to Sello, the company’s new app, without first having to maintain a full-blown Shopify store. Pinterest’s Buyable Pins is already getting twice the conversion rate of regular Pins on mobile.
And yet there is no one way to conclude or frame a vision for digital transformation. It is an evolving journey that starts at the top and then engages people at every level in the company.
Photos by Mona Singh