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How to Approach Customer Focused Digital Transformation

Approaching customer-focused digital transformation within traditional project structures doesn't work. This necessitates a different approach for getting digital transformation initiatives off the ground.

In today’s blog post, Richard Fouts, research vice president at Gartner, provides advice for chief marketing officers (CMOs) on how to approach customer-focused digital transformation.

Mr. Fouts said:

Digital business transformation takes many paths. For example, some initiatives are driven through finance or operations, some by evolution occurring in supply chains, partnerships and/or alliances, and others are driven by a rising change and evolution in customer expectations — expectations that have already driven the marketing function to "go digital" in how it engages with the digital customer to satisfy needs in entirely new ways.

Customer focused digital business transformation initiatives will shortchange the organization’s intent if they depend on a traditional approach that values the wrong things. Most projects are defined goals, schedules and quantifiable objectives. However, it’s difficult to set quantifiable objectives if the ultimate business model you’re driving toward is unknown. Transformation puts you in discovery mode; the firms we talked to treat it more like a scientific experiment versus an engagement with a known deliverable.

Most projects are all about delivering on-time and on budget and keeping risks at a minimum. Transformation is about discovering real breakthroughs in current performance versus marginal improvements. It’s about taking risks and working iteratively against unknown outcomes using agile principles of operating. This is called discovery oriented project management, where theories are developed to build hypotheses, conduct experiments and launch-and-learn.

Recommendations:

Keep Your Core Team Small: Staff a core team of six to eight business leaders, comprised of C-Level executives (or one of their direct reports) from marketing, operations, finance and sales. Large teams are not as equipped to work fast - and speed is important especially if you’re being threatened by more agile startups. Many decisions will need to be made in real time, another argument for a small empowered team.

Understand Customers as Users: B2B organizations in particular, may know their buyers (division managers, procurement arms or corporate buyers) but know little about the people that actually use their products.  After intensive observations many companies find ways to play a larger role in the customer’s day.

Engage Cognitive & Behavioral Scientists: Be open to staffing transformation engagements with cognitive and behavioral scientists who understand how the digital customer perceives problems, uses information and analyzes data. These types come to the process with no biases or preconceived notions of how things should be done.

Approach the Old and New in Parallel: Think of transformation as parallel tracks. The first re-positions your legacy model to an altered marketplace leveraging the value proposition that has worked in the past. The second develops new sources of growth through an internal, startup-style business unit. This dual approach is occurring at Xerox, Barnes and Noble, Nike, the New York Times and other companies going through customer focused digital transformation.

Get Inspiration Outside Your Industry: Most of you insist on consultants that deeply understand your sector. You’re not wrong to insist this, but be open to staffing these engagements with an expert that may have a moderate understanding of your sector, but with a high degree of empathy and expertise in the area you want to impact, for example customer service, delivery, loyalty or user experience.

More detailed information can be found in the report “How to Approach Customer-Focused Digital Transformation.” The report can be found on Gartner’s website at http://www.gartner.com/resId=2614423.

This research is part of the Gartner for Marketing Leaders program. This program provides real-time, personalized digital marketing guidance, from vision through execution. Gartner for Marketing Leaders is focused on helping digital marketers succeed in eight key areas: emerging digital marketing trends and techniques, social marketing, mobile marketing, monetizing digital marketing through commerce, multichannel marketing, data-driven marketing, digital marketing essentials and digital marketing programs. Additional information is available at http://www.gartner.com/digitalmarketing. For additional details, email GML@gartner.com.

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