Digital is disrupting legacy business models and changing the way businesses operate. In the next 10 years, half of the S&P 500 will be at risk. To survive, businesses must move fast, adapt quickly and be innovative. Those that fail to do so will lose momentum and get left behind. The verdict is clear: every […]Read more
Large enterprises face daunting challenges as the level of disruption continues to rise. We believe they will continue to see innovation play a pivotal role in transforming their products and their organizational capabilities. We expect to see big shifts internally as companies orient their structures to meet the demands of the marketplace. Here are 4 shifts that will transform large enterprises:
1. Digital transformation becomes the center of corporate strategy
With an on-going focus on acquiring new customers, providing compelling experiences, and driving loyal customer followings, businesses will continue to invest time and funding in digital initiatives for their consumer audiences. However, in addition to fulfilling consumer-facing agendas, companies will turn their attention and dollars to digitizing their internal corporate strategies in the areas of customer service, direct sales, operations and even HR. Interactions between sales forces and their customers will become smarter as workforces are armed with mobile technologies and digital touch-points containing customer data including profile information and historical interactions. Cross-sell and up-sell opportunities will be aided by suggestive messaging which is personalized and tailored to the individual consumer and made available to the customer service agent. Sensors and location-based services will allow operations leadership to observe and analyze physical workflow and timings to optimize performance and find cost efficiencies. Employees will interact with their human resource functions in the same manner they conduct their omni-channel lives. They will use mobile, social and web-based touch points to make their day-to-day tasks a seamless (and possibly enjoyable) experience—from tracking time, to requesting vacation, accessing benefits or managing their employee profiles. Creating roadmaps and building experiences for internal, digital transformations will require the same rules as consumer experiences. And, as always, training/rollout and adoption management cannot be overlooked in addition to on-going product maintenance and support.
2. Rise of the Chief Digital Officer
Customers are demanding fresh information and the ability to buy wherever, whenever and however they want. Companies want someone to grow their business, strengthen their brands and reinvent marketing initiatives relative to the 360 consumer experience pre-purchase and post-purchase. Both CMOs and CIOs are recognizing that they need help with skills and strategies that can bridge such gaps. Traditionally, digital was positioned as part of the marketing function within the business, responsible for driving the organization’s online presence. The last two years have seen the rise of the Chief Digital Officer, a senior executive who sits at the right hand of the CEO and is seen as instrumental to the future of the organization. CDO is someone who not only has digital acumen but also is a seasoned general manager who can operate within a large-scale business and influence effectively across the organization. A recent Russell Reynolds Associates survey found that CDOs are meaningfully different from other senior executives across five categories: they are on average 34 percent more likely to be innovative and 32 percent more likely to be disruptive, and also differ with regard to determination, boldness of leadership, and social adeptness. The spike in demand for Chief Digital Officers has been felt globally. In Europe, the number of search requests for this role has risen by almost a third in the last 24 months. The United States has seen the same growth in half that time.
3. Tighter alliance between the CMO and the CIO
Businesses will continue to focus on evolving their connected customer experience. They will be advancing their mobile-first agendas and taking big steps toward implementing digitally enabled strategies for customer acquisition, engagement and retention. While these goals are typically owned by the CMO, it’s the tight alliance with the CIO that will be required if any business wants to be successful in achieving these initiatives—especially in this age of the digital customer. For example, many businesses are planning on introducing real-time, personalized interactive experiences that drive customer loyalty and brand love. They want to power insight-driven actions for the customer through the use of sensors, the detection of behavior-based triggers and the employing of business rules. How does the relationship look from a day-to-day perspective? CIOs will need to move from a lights-on, service-oriented position to provide a more strategic partnership with the CMO to define, own, and execute the customer journey across both digital and physical touch-points. Capital budgets will be allocated and jointly requested by CMOs and CIOs, to invest in and develop capabilities according to product roadmaps that contain both functional elements and enabling technologies. CIOs will champion and support creating the single view of the customer. Effective use of mobile technology, big data and decision tools will be the role of both the CMO and CIO organizations.
4. Innovation Labs become the engine for reinvigorating culture
The purpose of an Innovation Lab is to be an “engine” – for unique and valuable ideas that can be scaled to the rest of the company, fueling progress for the entire organization. We expect to see a shift from innovation labs simply generating ideas to becoming catalysts for a culture of innovation. In this new model, the primary purpose of the Innovation Lab will be as a disruptive influence within an organization that causes systemic cultural change and elevates the entire organization to a new level of creativity and productivity. Innovation Labs focused solely on idea generation will fail since they rely on the “lone genius” concept and do not access the deep organizational knowledge of the average employee. Furthermore, this simple view of the Innovation Lab confines innovation and creativity to a single group and, by association, removes those attributes from the rest of the organization (effectively turning them into support staff). Innovation Labs that focus on culture, however, can reinvigorate a lagging or stagnant business and establish innovation as a true core value within the most ossified of departments, teams and lines of business. By creating a lasting culture of innovation rather than a few quick innovations, an Innovation Lab can “make elephants run” with ideas, energy, processes, and an entrepreneurial mindset that persists and permeates throughout the entire business.
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