Since the global financial crisis nearly 10 years ago, many enterprises have been riding high on the “free money” made available to them through endless central bank bond buying and low or even negative interest rates.
But there’s zero doubt that this capital bubble will burst. And as the flood of money recedes, some organizations that have been “faking” their digital transformations, i.e., taking a non-strategic approach to digital, will falter. Others will likely fail.
Does lack of a digital strategy really equate to such doom and gloom? You bet it does. Because digital isn’t just about technology. In fact, Everest Group’s definition of digital specifically looks beyond technology and focuses on how digital dramatically enhances the experience of users – customers, employees, and partners alike.
Need to be convinced of the importance of a superior digitally-based experience? Look no further than the alarming number of retail stores that have closed and gone bankrupt because they haven’t been able to provide an Amazon-like experience. Of course, it’s just not the retail industry facing challenges. True digital transformation is and will cause future disruptions in the healthcare, financial, pharma, and other industries.
Against that back-drop, here are my top five predictions for 2018, and what you should do to address them.
Top five digital predictions for 2018
- Digital agility will be the basis for competitive advantage: Your business value will increasingly come from making things easy, reliable, and fast for your customers. To win in 2018 and beyond, your focus must not be on the functional attributes of your product or service, but instead on the context for how customers purchases and use them, and how you manage their relationship and interactions with your company. These will be the critical proof points for building and sustaining customer loyalty.
- Delivering the right experience will become your organizing principle: The structural limitations of legacy organizational models – where functions and insights into customer needs and behaviors are fragmented and siloed – severely impact delivery of an enhanced customer experience. In order to effectively compete, you need to adjust structures, internal processes, incentives, reporting, and other levers to directly align to the customer experience. Imagine the impact if you took 20 percent of the team members in each of your functional departments and had them report to a newly-established customer experience department?
- Success won’t be about the information you have, but what you do with the insights: Your organization has most likely built and analyzed large sets of data about your customers, products, operations, etc. But data is only valuable if you take action on the insights you gain from the information. In the words of Jack Welch, former chairman and CEO of GE: “An organization’s ability to learn, and translate that learning into action rapidly, is the ultimate competitive advantage.” And, borrowing Nike’s trademark: “Just do it.”
- This won’t be your grandfather’s job: The increasing impact of technology and the acceleration of change will have dramatic impact on how humans are utilized and managed by companies. Success will mean increasingly virtualizing your employee and career models. These could take various shapes, including using talent free-agency models to staff initiatives, and replacing the concept of a career path with skill dashboards whereby individuals accumulate related sets of experiences and expand those experiences into new areas.
- There will be seamless interaction between humans and automation: Don’t fret about the FUD around automation replacing human workers. RPA, analytics, and other new technologies are accelerating the need for humans to evolve their roles and skills, which means less effort on collecting and manipulating information and more focus on identifying insights, understanding needs, developing new ideas, and applying judgment to make decisions. Empowering your employees with knowledge on how to use these new technologies for higher value activities will provide you with a distinct advantage over your competitors.
Three no-regret actions to ensure you aren’t left entirely behind
- Understand beyond your immediate competitive landscape. You can gain all kinds of gems and jewels on how to leapfrog the competition from businesses in sectors other than your own. Make the ask of enterprises you respect: most are generally willing to share, as long as you are too.
- Get your digital technology degree. Educate yourself on how available technologies can be applied to competencies, processes, and activities that are relevant to you. What types of problems do they help solve? What are the new tools in the tool box, and how can they build upon each other?
- Don’t go it alone; invite your friends. Every one of my above predictions have big implications that go well beyond one function or process. They’re enterprise-level initiatives that need the collective to succeed in a meaningful way. Silos need to develop a shared need and vision, which is generally the biggest barrier to fundamental digital change.
2018 may not be the year the money bubble bursts. But it is the year that you must make highly strategic digital investments. So, the question your enterprise should be asking itself is, “am I ready for it, or am I faking it?”