Every organisation is being affected by digitalisation as technology transforms how work gets done, consumer expectations change and new ways to create value are devised. For more than twenty years I have worked with a wide variety of companies from banking to retail and from pharmaceuticals to luxury wines and spirits. Each has it’s own challenges but there are similarities and patterns that may provide lessons for others.
What does not exist, despite the wishes and expectations of many business leaders is a blueprint or recipe book for transformation success. Instead, CEOs and their teams must accept the need to leap into the dark with perhaps a few illuminated signposts that will guide their experiments and learning.
In this post I want to suggest that we can use several ideas from world building to help us shine some light on what we might do especially to define the journey and take our staff with us.
Let’s start simply. There are two worlds in which change will happen: the world the consumer (or customer or client) sees and the world behind the scenes where important parts of the business happen but less visibly. There are also two time horizons: what needs to happen now or very soon and what will happen in the longer term. By separating transformation into these two axes we make it easier to explore and design change.
Our two worlds are connected. What happens behind the scenes directly effects what is experienced by the consumer and what we do now effects what we can and will do in the longer term. We must find ways to understand these connections.
World 1 – the world of our consumer
To transform ourselves we need to transform the experiences we offer the consumer and perhaps even the non-consumer (who currently buys from our competitors). These experiences include the experience of our product or service plus all of the branding, communication, PR, packaging and digital channels we already use. Over the last twenty years it is inevitable that we have already built websites, online stores, apps, social channels, and together with agencies we may even feel that our transformation is over or at least well on its way.
So do we really need to transform? Yes. It’s likely that our efforts in digital mask a lack of real change in our business. We’re doing much the same as we were in the past (with some extra digital marketing) and this makes us vulnerable to the disruptive transformations of newcomers in our industries or bigger changes from our competitors or in the business environment.
There are many reasons why change is still needed. These including changing expectations from our customers, opportunities to use new communication tools and channels, and new more powerful ways to create value for ourselves, our customers and the planet.
Our consumers are being bombarded by change from every angle. Products that they have taken for granted have disappeared and turned into services (such as music, newspapers, transport and traditional product ownership), time has been distorted by search, comparison shopping, instant purchase and 10 minute delivery and consumers have been cast in new roles as reviewers, supporters, influencers and even makers.
Change also goes well beyond consumer change and includes Covid-19, the climate crisis, increasing automation, the polarisation of most of our discourse and widening inequality. Some of these have been magnified by digital but all are transforming our societies in ways that change the roles for companies: as solutions providers, employers and signifiers.
World 2 – our business behind the scenes
A second world exists where we as an organisation do what we do and make what we sell. This behind the scenes world is the world of the supply chain, the relationships with our suppliers and business partners and the worlds of regulation, finance, product development and manufacturing.
While this world is less visible to consumers, it underpins the world they can see and changes in one, affect the other. If today we manufacture our products in China or Bangladesh then our consumer experience of our products will be influenced by how, where and why we have made those choices: availability times, prices, return and repair policies and the politics of those choices.
Digital technologies and data are transforming this world just as powerfully as the world of the consumer through automation, machine learning, distributed and remote working, just-in-time and additive manufacturing, global accounting and financial trading as well as the cloud, blockchain, cybersecurity, visualisation, adtech, agritech, fintech and healthtech.
Changes in this world change how we make and sell things as well as what we make and how we make money. New models of product development and innovation support new models of business including platforms and marketplaces.
Once again we need to take a global view of this behind the scenes world with new opportunities and new vulnerabilities. We have seen post-pandemic, significant strains on global supply chains and distribution channels, our demands for energy and rare materials putting pressure on prices as well as the planet, and people are transformed in their attitudes to work, equality and rights.
Time horizon 1 – the short term
As well as identifying our two worlds we need to identify the two time horizons for change: the short and the longer term.
What can we transform in the short term? Surely nothing can happen quickly without planning, evaluation, impact analysis and careful consideration.
Time horizon 1 transformation is more concerned with changing the way we think about change than about what we change today. Almost all businesses need to become more experimental and take more risks. They need to change the way they plan and how they are organised so that experiments can be tried without potentially jeopardising the whole organisation. They need to become more flexible and agile.
Strongly planned and hierarchical companies often work within well defined processes and planning cycles and these are often connected to annual departmental budgets and management responsibilities and incentives. It is normal for such companies to develop siloes in which individual departments can be extremely successful but connections between departments are kept to a minimum. Siloed organisations can be very brittle when external change occurs because impacts are only viewed from the department level where their scale may be hard to assess or manage.
Time horizon 2 – the longer and long term
To become more agile and plan for the short term, we need to be clear about the long term direction for the organisation; the vision within which short-term actions and experiments can be designed and evaluated. A set of long-term goals will be essential as drivers of the organisational culture around which teams and individuals can align.
This long-term goal should be defined with at least a five to ten year timeframe and should be couched in terms of the value being created for the business, the customers and additional external values being generated. The role of digital technology should not be tightly described in this vision as it is likely to change faster than the vision is updated.
Applying world building ideas to transformation
Building worlds is about describing what is, and imagining what might become. It involves looking at the present situation and spotting what is happening and what might change. Use the two different worlds (the world for the consumer and the world behind the scenes) and then combine them into one. Focus first on the current situation.
- Describe the world for the consumer
- Draw a picture of the current business behind the scenes
- Create a vision of what the consumer experience might become
- Consider how the business must change to deliver the consumer experience
Here are some ideas to help focus each step:
Describe the existing world for the consumer
Focus on what the consumer (or client) actually experiences when they interact with your business. Think of the different ways they come into contact with you (online and offline) and what using your product entails. How does your marketing fit into this picture? What does the retail experience feel like if you have one? Check that the reality meets your intentions by visiting your online or offline store or interviewing sales or customer contact staff. Turn your insights into a picture of the current world.
Look for parts of the experience you do not control. Spot opportunities where you could provide a better experience. Repeat the exercise for one of your competitors making notes of what is different. Spend some time analysing the experiences customers receive from highly digital companies such as Amazon or Apple.
What is happening behind the scenes?
Consider the whole of your business and your supply-chain from raw materials to customer support. Work with your team to create a diagram showing the relationships and information flows between different departments or functions inside your company. Are functions currently siloed and how has that affected flexibility and resilience during the last few years? Do departments compete for attention, resources and technology?
Think about the people who work here and what they say, feel and do to contribute to the business. How do they describe the business and the speeds of decision making, innovation and planning? What would they say about the culture of the organisation?
Put these two diagrams (consumer and behind the scenes) side-by-side and consider how they are connected. Are there things that need to change? Are their opportunities and discussions about introducing technology to bring about those changes?
Create a vision of what the consumer experience might become
A world is made up of many components and imagining and building a new world involves thinking about change. Focus on changes from a consumer perspective first. What will be remarkable, magical or memorable about their future experience? How will they meet you for the first time and on subsequent occasions after that? How will their use of your product or service change?
Consider how you might involve them more in your business? What could your consumer do for you? Many companies want their customers to tell others but honestly why should they? What do you do that really makes you worth talking about, worth reviewing, worth consuming again?
Imagine conjuring up a world around your customer that actively engages, delights, educates, entertains or reassures them. If your product or service is too boring or too similar to your competitors then what would it have to become to be worth a whole world?
Consider how gaming and the metaverse might allow your consumers to interact with your company, your brand and other people. Perhaps the most memorable experiences and possessions will be virtual. How will the real and the virtual worlds tell the same story and be connected?
Think about a 5-10 year time horizon to create your new world and bring your future vision to life with another picture. Spend some time thinking about what has changed between your step 1 picture and this one.
You can take this world building exercise much further and prototype the world that you imagine. Design future experiences as apps, augmented reality and models or turn them into video, podcasts, stories or galleries of artefacts.
Consider what needs to change in your business to create your future consumer world
The final step is work out what has to change to enable your future vision. It is here that there are many recognisable patterns that other organisations are striving to achieve (independently of their diverse visions).
- We need to be faster in how we respond to external, customer and technological change and how we innovate new solutions to consumer needs. We need to be more experimental and take more risks. This requires a fundamental shift in how projects are planned and run.
- We need to find new ways to generate value for ourselves, our consumers and other stakeholders as well as being less harmful to the planet. Think about the intellectual property you create, the networks of people you connect, the software services you could share with others and the platforms and markets that might enable those.
- We need to share more information, data and ideas across the business and find tools and processes to help us do this. Improving communication is often the number one request from staff and consumers and while some tools exist, there is still a vast opportunity to tackle this.
- We need to bring our consumers, business partners and our staff deeper into the world we are creating, ask for their help and give them more back in return. This is key to many future businesses and requires a very clear vision of what the future might hold.
- We need to automate some of what we do and experiment with bringing other technologies in. Create real time for staff to try things out and report back.
- We should try to set new standards and expectations for our industry to stand apart from our competitors. Amazon is an excellent example of a disruptor who resets consumer expectations.
- We need to make sure that everyone in our business is clear about the direction we are taking and their role in achieving our goals. They need to live experimentally and with a customer focus.
- We need to let go of things that are holding us back including old processes, rules and ways of working. Finding waste and stopping useless work is a huge opportunity to create the space for innovation and change. Change the way you hold and run meetings.
- We need to watch what others do (with technology, ideas and ways of working) and test whether these would work in our context. Make this part of everyone’s job.
- We need to lead and be led differently. Spend time exploring alternatives to whatever your current leadership model might be.
Some of the answers or discussions around these statements will suggest experiments that would be worth trying immediately while others will need a cultural shift before they can be attempted.
Sharing the building of worlds to build culture
The process I have outlined above is ideal for a leadership programme to explore change but it is even better if applied throughout the organisation as a way to change the conversations and the culture around digital and transformation.
In future posts I’ll share some ideas for tackling specific parts of this process and dealing with pushback from those who do not want to change. Let me have comments and reactions to this one so that I can make the next parts as useful as possible. Subscribe if you want to be alerted to the next posts.