The Enterprise Transformation Conundrum

Everywhere you turn these days, companies are being challenged to transform, innovate and think like a designer.

The problem is it’s not an easy undertaking to change the way a large organization operates. Real initiative gets bogged down in politics, hierarchical thinking and institutional inertia. Change requires more than inspiration. It takes hard work — and often the skill of a used car salesman to sell your idea to a reluctant C suite.

Some companies have forward-looking leaders who encourage this type of behavior. I wrote recently about Vishal Sikka’s attempts to instill design thinking at Infosys. Sikka seems to understand the value of getting his employees to shift their thinking and be idea-driven. More often though, these types of proposals are driven from the bottom up, and in these instances it’s much more challenging to convince the ‘Powers That Be’ to implement a radical idea.

It’s up to motivated employees to try and figure out how to navigate this thorny path. The innovators also need to understand, it can’t just be about cool ideas or change for change’s sake. It has to drive real business value, help sell more products, get customers more interested and have a measurable impact on the bottom line.

Overcoming Fear Of Failure

Real entrepreneurs understand failure is part of the process. They don’t give up easily. Instead they pick themselves up, dust themselves off, adjust and iterate. You need to keep trying and if you are under pressure to succeed or else, it’s going to be difficult to get truly innovative projects going in your company.

“The number one reason we see customers get stuck is figuring out how to convince the board. Almost exclusively failures happen when you don’t have buy-in from the board,” Paddy Srinivasan, vp of products at Xively told the MIT Sloan CIO Symposium this week.

One way to build trust is to start small and build a body of work. “Do work that results in a track record of innovation or what you can articulate as innovation,” says Marshall Van Alstyne, a Boston University professor and research associate for the MIT Initiative on the Digital Economy.

Jerry Wolfe, who runs a company called Vivanda, which started as a small experimental project inside of the spice giant, McCormick, says we’ve reached a point where we have to think more creatively about how to connect to consumers.

“There’s only so much you can do with 30 second TV spot or a banner ad,” he said this week at the MIT Sloan CIO Symposium.

“There’s only so much you can do with 30 second TV spot or a banner ad.” Jerry Wolfe

In Wolfe’s case, his team created an app called FlavorPrint, which creates a fingerprint for your tastes based on 20 questions. It then presents you with a list of recipes based on your answers. It provides a digital way to engage directly with the audience, and more importantly it has resulted in increased sales of McCormick products, according to Wolfe. That’s the kind of results that gets executive attention (and gets you spun off into a separate company).

As companies develop these products, it’s essential they keep their customers at top of mind because the reason for building these tools is to improve your connection with them.

Expecting Connection

Once you create a digital connection to your customers, you need to take advantage of that connection — and customers are going to have different expectations when it comes to engagement in digital channels.

That means that companies need to start thinking about customer service in a digital context.

Network of people coming out of a tablet.

“With technology today, everyone’s becoming connected and it offers a unique opportunity to forge relationship with consumers. Customers expect to be engaged. They expect you to know how they are using the product. They want instant feedback when they run into issues,” Srinivasan said.

Customers expect to be engaged. They expect you to know how they are using the product. They want instant feedback when they run into issues.” Paddy Srinivasan

Just this week, updated Community Cloud, its product that lets customers share information with one another and answer questions. The idea behind the product was to relieve pressure on service desks by letting customers help each other.

This is particularly important for companies just entering the digital channel because staffing customer service 24/7 can be an expensive and difficult undertaking. Letting your customers loose on the problem relieves some of that burden.

Taking Advantage Of That Data

As customers interact with your digital tools, you can begin to learn more about them and that data you collect can be an invaluable part of going digital. At its best, you’re providing new ways for your customers to interact with your company, and as they do, they tell you lots of information about themselves and how they use your products.

You build brand loyalty and get happy engaged customers. That’s a big win for any organization. “There are several things you can learn once you start listening about how your product is being used, when it’s being used and under what conditions,” Srinivasan said.

You can begin to use that data to build premium service products, something that corporate customers in particular are willing to pay for, he explained.

The fact is that companies can’t afford to stand still. There is tremendous pressure to offer more digital experiences with customers and interact with them online socially. Customers are demanding it and it is particularly difficult for older established companies used to doing business a certain way.

Be The Change You Want To Be

It’s absolutely essential that companies begin experimenting with these types of projects and offering customers the types of fun and interactive experiences they are expecting today. When thinking about this, it’s important to get information up front and begin to work from a position of strength.

“The other thing is talk to people who have done it. It’s such a complex set of issues. It’s harder to experiment and fail than to talk to someone who understands design principals and has done it successfully,” Van Alstyne said.

“It’s harder to experiment and fail than to talk to someone who understands design principals and has done it successfully.” Marshall Van Alstyne

If you want proof of how this works, consider General Electric, which has set up the Performance Marketing Labs, a place to experiment with this type of transformational change. GE is an industrial giant, but it understands it can’t just rest on its past successes. One project that came out of this lab is a game called called Patient Shuffle. You navigate through an emergency room, and it’s a good way to explain how GE and the electronic medical records business works, Andrew Markowitz, general manager of the lab, told me last Fall.

Fidelity Labs is another place where this type of work is going on. The lab produced a product called FidSafe, which provides a safe online repository for digital records such as wills and trusts, the kinds of records people have traditionally stored in a safe deposit box. This product has done so well, it’s graduating from the lab and being moved to the purview of the main product team.

The bottom line is you can’t stand stock still like a corporate deer caught in the headlights of digital transformation. You have to make some moves, try things and understand that not everything is going to work. When it does, it can have a dramatic impact on how your customers perceive your organization and the ways you interact with them — and ultimately your bottom line.