Most of my career has been devoted to helping companies transition to the digital era. Prior to the three years running marketing at Walmart’s ecommerce outpost in Silicon Valley, I spent 11 years with the Interpublic Group of Companies consulting with brands like Microsoft, Wells Fargo, and J&J. My work with corporate America is balanced with advisory work I do with innovative start ups like Blueshift Labs, Commerce Ventures, LocalID, NinthDecimal, and Price.com. As a co-founder of NewCo, I’ve been fortunate to get exposure to the more than 2,500 companies that have participated in our global festivals over the last five years.
That collective experience has shaped the following points of view on how to run a business that thrives in this age of digital disruption. Here are ten diagnostic questions to assess your company’s digital readiness.
#1: What is your Brand’s Purpose?
Perpetually connected consumers can interact with a brand anytime, anywhere. This presents tremendous growth opportunity for businesses as well as exposes incumbents to competitive threats. Understanding why your business exists beyond financial goals fosters creativity, guides difficult resource allocation, and attracts the talent to make it all happen. Contrast a financial mission like, “Exxon Mobil Corporation is committed to being the world’s premier petroleum and petrochemical company. To that end, we must continuously achieve superior financial and operating results while simultaneously adhering to high ethical standards” with purposeful missions like: “The Best Bees Company’s mission is to expand the honey bee population whilst improving the overall health and safety of bees nationwide” or Data.World’s “To build the most meaningful, collaborative, and abundant data resource in the world.”
#2: How does your Brand fit in your customers’ lives?
Given the broad digital canvas upon which brands serve their customers, it is critical to have real insights about the moments in people’s lives where a brand can add value. Businesses have gotten very adept at segmenting customer populations in terms of attributes and motivations. Marketers have also gotten very proficient at defining product benefits and value propositions. The blind spot continues to be understanding what is happening on the other side of the gorilla glass.
Nike+ has been so successful because it is a digital utility that supports what the actual Nike products do for their customers. Layering on digital value creates brand preference and loyalty.
#3: Can you clearly see your customer’s end to end experience?
In business today, what gets measured gets done. Companies are drowning in diagnostic measures of their business health. The challenge is that the metrics usually thin-slice the customer experience. Each stakeholder works diligently to fix their part of the experience and proudly points to improvements in their KPIs. Yet end users regularly point out flaws outside of the thin-slice KPIs that drag down overarching metrics like NPS and loyalty.
The truth it is very hard to get a holistic view. The Tatham Group has built an entire consulting practice helping large corporations experience their brands in the same way end users do.
Customer-centric CEOs channel their customers’ needs by being a power consumer of their own product. One such CEO, Jeff Bezos, famously shares his discoveries with single question mark emails. In the absence of an elegant reporting solution, simply encouraging employees to be customers can suffice.
#4: Do you run on live data?
Information-first NewCo’s are instrumented to constantly capture data. Speed is a competitive advantage. Live Data not only provides real time information but fosters a culture of always tweaking and reading the impact of various tactics.
When at Walmart.com, I turned my office into a meeting room and placed my desk right in the middle of the open Marketing floor. Behind my desk, for all to see, was an updated dashboard of that day’s traffic by source. This helped our team spot problems and capitalize on opportunities quickly.
#5: What incentives get in the way of being customer-centric?
Jeff Bezos has famously promoted serving the customer as the North Star for developing Amazon.com. In practice, when resources are finite, determining what customers prefer is skewed by the incentives upon the people making that decision.
A great example is channel cannibalization for a multichannel retailer. Why would a store manager encourage her customers to shop online when that makes it harder for her to deliver her own sales target? Walmart removed that hurdle by giving store managers credit for ecommerce sales in their trading radius.
#6: Can the organization process non-traditional partnerships?
In this time great change, no company has the resources to accomplish everything on their to do list. The good news is that we are also living in an entrepreneurial renaissance. There is likely to be a dedicated company focusing on the feature another company wishes they could create.
The challenge is finding ways to work together. Companies are equipped for some basic types of relationships with third parties (acquire, license, or vendor). The digital age opens potential for more nuanced relationships. Such relationships often introduce an element of “co-opetition.” Companies lack the expertise and the processes to evaluate such opportunities.
A good example has been the controversial rollout of ecommerce “buy now” buttons. Retailers can enable consumers to buy with one-click inside Pinterest or Twitter. While they will get incremental sales, they are also training customers to shop elsewhere and sharing valuable data. This is a strategically challenging decision. Executing and managing such a deal also presents a new set of issues. But it clearly is an opportunity for growth.
Not every non-traditional partnership is worth doing. But more and more such opportunities are popping up. NewCos are developing teams, policies, and forums to make these decisions.
#7: How can you be a platform?
A platform is something that can be built upon. A business platform refers to a model where other businesses symbiotically grow their business on top of an underlying platform business. The most obvious examples are the independent Apps that run on Apple’s iOS and Google’s Android platforms. Platform Revolution by Geoffery Parker and Marshall Van Alstyne does an excellent job explaining platform’d business models.
As discussed before at NewCo, building a brand platform accelerates growth. A good example is the relationship between the Jawbone UP fitness tracking service and the recipe library Yummly. Users can upload the recipes from the Yummly app and the caloric intake is then integrated with the user’s activity tracking at Jawbone UP. Both businesses benefit from the core functionality of the other.
#8: Does your culture add value or add weight?
When named global CEO of Universal McCann, Matt Seiler set out to make a Mad Men-era ad agency relevant in the digital age. His first big step was an internal marketing campaign and re-branding exercise declaring UM the “Yes &” agency. This was to combat the ingrained behavior of first pointing out all the reasons why something can’t work by saying “no but”. Seiler went on to grow the agency and win many awards.
Innovative ideas are hard to spot when they show up and are easily shut down. An innovative culture gives seeds of new ideas the space to germinate and protects the fragile shoots from being trampled. Leaders need to find the balance of keeping teams focused without letting the prioritization mandate produce the collateral damage of shutting down consideration of strange new ideas.
Whether it’s a ring fenced budget for testing, or a prototyping sandbox, or even a creative outsourcing program like Coca-Cola Founders, NewCos find a way to let diverse ideas reach the market.
#9: Do you foster diverse points of view?
Silicon Valley knows it has a diversity problem. More than social justice, the tech industry cares about diversity in its work force because diverse points of view unlock innovation.
From my own recent experience, it was the millennials on our Walmart.com who led the company’s first forrays in to marketing on Snapchat. Having a workforce that reflects the customer base leads to ideas from new perspectives and greater empathy.
#10: Is your work environment motivating?
For better or worse, the globally competitive market means that NewCo employees work long hours. Mobile devices and the cloud are making it easier than ever to have work/life integration.
However, as Dell’s recent Future Workforce Study showed, there are still high expectations of the physical work space. NewCo’s put a lot of energy into designing their physical work environments. NewCo Festivals would not be so popular without the voyeuristic allure of checking out cool work environments.
These workspaces are designed for collaboration and creativity as well as to encourage workers to work long hours. But more than anything they are designed to motivate employees to feel like they are part of something exciting and special.
The Zappos headquarters is the old Las Vegas City Hall. It has been refurbished to provide open access to all employees and to foster individual creativity. The call center staff sit in the same configurations as the executives do on what Zappos calls “monkey row.”
Contrast the reception desk at the Zappos headquarters pictured below with the next corporate office you visit.
Digital Readiness Checklist
So there you have it. One man’s informed opinion about characteristics required for businesses in the digital era. Please comment and let me know what you think!
- What is your Brand’s purpose?
- Where does your Brand fit in your customers’ lives?
- Can you clearly see your customer’s end to end experience?
- Do you run on live data?
- What incentives get in the way of being customer-centric?
- Can the organization process non-traditional partnerships?
- How can you be a platform?
- Does your culture add value or add weight?
- Do you foster diverse points of view?
- Is your work environment motivating?
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