- Make the message the story.
- Be contextual in the positioning of your message
- Create actions in your messages – not just ‘buy’ actions
- Understand aspirations from a cross cultural perspective
- Own your communication and include direct to customer channels
- Build a strong trust bridge before sending the marketing cavalry across it
TOM / EOM – sounds like a soup you might order. But for the purpose of this discussion, put your appetite to one side, and think about Digital Transformation.
TOM or the Target Operating Model is the staple of the consulting framework in transformation environments. The logic being, you have an initial operating model and you enter a transitional phase, driven by internal and external change, and you emerge with a new “target” operating model. It’s an excellent construct and very useful for delivering change.
In the digital arena, though the idea of the Target Operating Model is challenged because of a number of reasons.
Critically, it assumes that the change is a finite and one time activity. This is no longer true. Consider the landscape today. You enter a phase of virtualisation of your servers and networks, and before you finish that you’re in the middle of the mobility revolution. You combine cloud and mobility to create another transformation and everybody is talking about big data and social analytics. And then there’s the Internet of things, machine two machine and smart environments waiting to happen. So which points do you pick as the start and end of the change? And if you took this whole set as one change, would you even survive it?
And then, if the change is not a finite or a single event, what do you assume as your end state or ‘target’ environment? And if there is no target environment you can define, how can you create a target operating model? Would it not be outdated even as you were implementing it?
There could be an argument that these individual technology waves do not affect the business model and are just technology changes. I would disagree with that. Yes, moving from one vendor to another, or upgrading from version n to n+1 is a technology change, though even those projects need to be seen as business change projects. But the waves of technology I called out earlier – from Cloud, to Mobile, to IOT are all pretty fundamental shifts – often creating deep changes in business models.
To add to these problems, as this article in the Forbes highlights, many organisations undertake digital transformation without actually knowing what it is. Many don’t really understand the transformation, many others just see it as platform upgrades.
So here’s the bad news, your digital transformation project is not a one time exercise, there is no target environment and so your target operating model may be in need of an update by the time it’s bedded in.
The likely scenario is that there will be multiple waves of transformation. And here onwards they will all be digital (or at least until we come up with a new word).
Which leads me to my proposition – that perhaps the right way to think about this is as an Evolving Operating Model, rather than a Target Operating Model.
What would be the key features of an evolving operating model? Here are three key ones, though there may well be more.
Building a change capability – at the core of this is the creation of a Culture of change adaptability. I’ve consulted for many organisations where the smallest change has to be handled with kid-gloves and is a source of anxiety and organisational stress. These are all big changes we’re talking about, so there’s a lot of work to be done to make people change friendly. This should ideally be reflected in contracts with employees. HR needs to take a leading role here and ep build a culture of change through awareness, education, self-empowerment and counselling. At the same time, leadership needs to invest by ensuring the right people are chosen and then given the time to grow into this change culture. Based on my experience, there are parts of the world, such as Europe, where this would be a harder process than, say, in Asia. European business cultures are much more rigid about roles and function, and these are often defended by regulation. Also, in Europe, there is often a much higher premium on matching exact experience to a role, rather than bet on adaptability. One of the ways to address this is to balance the majority of such fixed role people with a handful of adaptors – people who can foster a pro-change environment within the business.
For example, I met a European company in the travel segment who could not even change business rules in their enterprise apps, or implement a mobile app store without validating the decisions with worker councils.
Funding Change: Not a capital expense but the cost of doing business: Build in the cost of change into your cost of running the business. Rather than the one hit capital expense of a digital transformation project, budget for change annually, that LOBs and divisions can draw from, with the right checks and balances to ensure governance is provided. There is every likelihood that each of the next five years will require significant changes to some part of your business or the other. Rather than running it as a giant centralised project, or leaving this to individual departments and LOB’s who may not value this investment, organisations should explore creating an investment bucket which is made available to teams based on their justification, against a stated vision. But this investment is locked down for change efforts and cannot be used for other purposes.
Earlier this year, the BBC announced a program of saving £48m and reinvesting at least £29m of that into Digital Transformation services across channels, mobile and digital journalism. Cooperative Bank had set aside £500m on IT alone, to enable it’s digital transformation. Your budgets may be comparable to BBC, or Cooperative Bank, but in all probability they represent significant amounts of money.
The big bang approach assumes that one large and hugely diverse project is the best way of optimising the way this budget is spent. Reality may be very different.
Instrument your company: Build an instrumented organisation where process change can be systemised easily, using BPM, middleware, SOA, and other architectural approaches. This is fundamental in order to plan, implement and measure change. For example, if you want to change your mobile customer service layer, with new processes without necessarily having to make big changes in your CRM or ERP systems, you need a decoupled approach that will allow you to modify or even replace your mobile front end without always having to change a legacy application. But also, it will be faster and quicker to implement a new process if the systems can change quickly, rather than become a symbol of the organisational inertia.
A good analogy and one you hear often in business discussions is about turning the tanker. We talk about large businesses being like large tankers – hard to turn. But your digital transformation should not be seen as that one awkward turn. It’s more like suddenly being in an environment where you will need to turn and often. The real challenge here is actually, how do you stop behaving like a hard to turn tanker?
I was recently in a discussion about digital architecture. There were half a dozen people in the discussion and everybody had a point of view, but there were two things prventing the discussion moving forward. The first was that we didn’t have an agreed view of digital architecture – a ‘what’. And the second was we didn’t have a ‘why’.
My knowledge of technology architecture is limited at best. You would not want me anywhere near an actual architectural design discussion. But it was the ‘why’ question that fascinated me. Why is this relevant? Why should we bother discussing this? What’s at stake here?
Let’s take a look at the competitive environments we live and work in. Increasingly, we are finding ourselves in a world of hyper-competition. What do I mean by that?
First, we are competing on new parameters. Most industry leading businesses have done the basics, so the battleground for competition has shifted. Often the differentiation itself comes from an information driven or ‘digital’ part of the service. Last month, in New Jersey, US, I agreed with a colleague that a primary basis for choosing a rental car would be the quality of the SATNAV system. But it is also likely that you have done enormous amounts of optimisation on your operational models. I just read about UPS’s optimising routing by minimising the number of left turns (in the US) and their innovation on how to land cargo planes.
Second, we are competing with entirely new types of players. Broadly there are 2 new types which require us to think harder. The first is the entry of established providers from other industries. For example, traditional banks have to worry about retailers many of whom are launching banking services. The second is the emergence of disruptive start ups. Once again, for Banks, you have new providers like http://www.simple.com or Square – each of whom may individually survive or perish, but collectively, they will pose some serious threats to your business model.
Consider two more key trends:
One, technology is now a part of the product. Almost every product. You can call it ‘smart’ or you can hide the technology but the chances that the tech component of your product is increasing annually as a percentage of your product’s value are extremely high. From Nike to Nest, everybody is doing this.
Two, there is an ongoing service-isation. As most companies seek that sweet spot between pure products and pure services, technology, and specifically software, is often the delivery mechanism for the service component. After all, when you buy the Nest thermostat, what you’re really buying is the service of ambient temperature at home. Or when you buy a washing machine from Samsung, for example, you’re really buying the service of cleaning clothes. So could Samsung theoretically also send you analyses based on weather to let you know when clothes will dry faster without a dryer? Or perhaps it might analyse the performance of your washing and let you know that you’re overloading the washing machine on weekends. You can easily think of ways in which almost every product can enhanced by a service layer, which is driven by data and software.
What does all this mean to our discussion on digital architectures? Here are some questions to ponder:
1. If your competitor provides any core service at a lower cost than yours, could you survive in the long run? If a broadcaster can run a channel at 10% lower operating costs, or lower ad-sales costs by 10%, can their competition survive? Does your architecture allow you to run core services at a competitive cost model?
2. If your competition can get new services to market faster than you can, would you retain customers?
3. How do you compete against companies that have no legacy? You can get away in an internal discussion by talking about how much of a challenge your legacy is, when it comes to making changes or adding a new service. But do your customers care, when they can get the same thing elsewhere?
4. Is your digital architecture designed to handle the new requirements of competition, new services, and the technology component of your products?
So coming back to the challenges of digital architecture, I believe there is an absolute requirement set and a competitive requirement set. The absolute set may contain things such as scalability and response time. We learnt from the early days of the web that traditional architectures and spikes on websites were not a match in heaven. Even now, major sites crash when the world flocks to see something unfold or buy something everybody covets. Architecture that can handle spikes is a critical requirement in an absolute sense. You can estimate the boundaries and plan for them. Speed/ response time is another – we did a project once where it would take a few seconds to respond, and that was unacceptable, of course. After due analysis we discovered that each request was being routed via enterprise servers across the atlantic and back, so obviously even the physical set up needs to be understood. Other absolute requirements may include security and handling specific functionality such as streaming or transactions.
But to my points above, all of this will point to navel gazing unless you also consider your competitive requirements for your architecture. This leads to benchmarking the costs of key processes, the time taken for changes, new products, upgrades and of course, your customer interface.
So whether you’re like UPS – extracting the last bit of efficiency so you can be that half a second faster than the competition – or whether you are the competition to UPS, the focus of your digital architecture needs to be (a) ensuring it can do all the things you need to do for your customers and (b) ensuring it allows you to be compete – by making you faster, cheaper, quicker or better.
That should be the starting point of the discussion for digital architecture.
Nothing is as addictive as a service that is easy, offers instant gratification and solves an everyday problem. I just had to try it once, and I was hooked. Now, you have to realise that it’s not the same in London, where the density and availability of cabs, both private and public is very high. But out here, in New Jersey standing on the highway, and facing the prospect of great head-scratching and then significant time and effort to get practically anywhere, it’s the most obvious thing to do! And once was all it took.
My name is Ved and I am addicted to Uber.
Nobody walks in New Jersey. This is almost as much of a truism as “No Snakes in Ireland”. But its true. I found a Starbucks 10 mins away (on foot) from my hotel. To get to it, though, I have to walk through 3 parking lots, a driveway and a stretch of path by the road which I think has just been created for some construction work. Nobody walks in NJ and it’s not designed for walking. Nonetheless, each morning I venture my way to the Starbucks and then head out from there.
When my coffee is three-quarters finished, book the cab on Uber. It usually takes 7-8 minutes for the car to arrive. It comes right to the Starbucks without my having to give the driver any instructions. I get a warning when the car is 2 mins away. Is it not obvious yet, why I can’t tear myself away? Of course there are moments when it falls over a little bit. But more about that later.
What’s in It for Me?
It’s a cashless transaction. I can track the car. You know all of this.
But I also know the name of the driver and vice versa so I can greet him with a ‘Hello Dan’ – this is a very small thing, but I find it extremely worthwhile. It opens up the space for a conversation.
What’s in It for Him?
So far all the Uber drivers I’ve met are men. I’m sure there are women Uber drivers as well. So forgive the generalisation.
Uber hoovers up spare capacity and brings more granularity into the supply side. In other words, you could be an Uber driver for 2 hours a day or whatever works for you.
I met a driver who was a tech entrepreneur, one who was also driving for a cab company and one who was a student. I learnt that Uber gives each driver a phone with the Uber app installed and everything else disabled. I learnt that thanks to the geofence implemented, if you don’t have the right license / car to drive in New York, the app shuts off as soon as you get on the bridge.
Yesterday, I called the Uber car after my coffee but he struggled to find me.
But he did, finally. Took him 15 extra minutes. It was a Sunday and I was enjoying my coffee. I didn’t mind.
Today, my Uber driver was Rob. He told me he’d just started with Uber a month ago, when he quit his job with a software company. Why did he quit? He started his own company. What kind of software? Mobile apps. He said he drives for a couple of hours every day. We had a great discussion about the Uber app itself, the advantages and drawbacks. The geo-fencing, the battery life.
On Friday my Uber drive was Taj and we spoke about daughters and growing up in different cultures.
Professionally speaking, Uber could well happen to your industry. What if service providers had a platform to offer to users what you do with great investment and commitment? What AirBnB is to hotels, or Ebay is to retailers. These platforms aren’t service providers themselves, but often are really focused on marketplace efficiencies.
Should you look for these opportunities within your own industry, before somebody else does? That might well be the right question to ask.
Because, as I’ve already argued before, resisting technology is like resisting ageing.
A common refrain we all hear nowadays is how technology is creating a generation incapable of human interaction. Your kids spend all their time with their noses stuck in a phone or laptop and you’re worried (or should be) that they aren’t building the skills to interact with real people in the real world. Books such as Sherry Turkle’s “Alone Together” – (which I’ve tried to read), paint this view all too grimly.
This is a misplaced fear at best, and downright wrong at worst. This post will try and explain why.
But first, let me state that I do find it odd when I meet with young people and neither they nor their parents find it necessary to make any attempt at conversation. They slink into a corner with their phones and the inter-generational equilibrium (read: uneasy truce) is reached. I’m not defending the lack of real life social engagement skills. But is technology really to blame for this? In my book, this is a debate about parenting, which is best kept for another forum.
But social media has a bad rep in many circles. I occasionally hear people say with a lot of vehemence (or pride?) “I don’t have time for cr*p like Facebook”. Others will say “I don’t get the point of Twitter”. Without disrespecting opinions, let’s get a few simple assertions out of the way.
Social media is first, a marketplace. It’s a market for opinions, emotions and connections. As with any market, there are buyers and sellers. Thus it is that on any platform, including the ones above, there are people who have the need to express, and those who have the desire to listen.
Second, many of us live in a post-national world today. Our families, friends, colleagues and professional relationships all comfortably span countries and continents. On a given day we interact with people all over the world. Isn’t it amazing that we can do this? Have we forgotten already how magical this is? And how far we’ve come from the days of having to pre-book International Trunk-Calls and start conversations with “What time is it there?”.
Most importantly, in the world today’s children will grow up in, it will be natural to have as many conversations with people across the world as with the persons next to us. No, this is not sad, or a decline in human communication. It’s the death of distance. I want to have a coffee with my colleague at work, and dinner with my friends who live in my city, but I also want to share the private joke with my college friend who happens to be working in Africa currently, and debate the pros and cons of the changes in the Indian political climate with my friends in India. I want to hear from my friends caught in the Polar Vortex in America, that they are safe and warm and to continue the debate I started with my mother about whether or not the US Dollar is a artificially held up by oil-negotiations. I want to do all of this in a single day. And I can. Isn’t that great? And if it isn’t already for you, this will be the new normal. Inability to manage in this world will be a huge challenge.
Remember, the are entirely new skills being learnt here. Your average teenager is adept at holding multiple parallel conversations; is part of an ongoing language evolution, and is learning about an entirely new way of running trust relationships without physical interaction. All of these are life-skills for tomorrow.
So while not decrying the value of human interaction as we know it, lets not forget that these technology enabled means of human communication are as important. Knowing one should not mean losing the other. Just as gaining a friend shouldn’t mean losing another.