Digital disruption – are you ready?

Nimble start-ups and global juggernauts tend to dominate the digital disruption landscape. But there are plenty of things you can do to create disruption if you’re somewhere in between.

 

by Emma Andrews23 May 2017

A colleague of mine recently found himself in a situation where he needed to buy a new clothes iron in a hurry. A dog-inflicted catastrophe the night before had rendered his existing iron (a crucial household appliance in his well-ordered world) unfit for service. So off he dashed in his lunch break to go and buy a new one. Myer 1; Bank balance 0 (not literally, I hope!).

As an English woman accustomed to the convenience of Amazon Prime, my reaction was simple: Buy it from Amazon and have it delivered to the office by the end of the day!

Not available here of course, but my point is that this is an example of hyper customer-centricity. A brand identifies and defines a problem and then goes about creating a solution for the customer. In this case, one very busy Account Director in need of an iron STAT and limited time to go shopping. 

Customer-centricity was one of the core themes of the 2017 World Strategy and Innovation Forum. The overarching theme was digital disruption. 

Let me summarise the main take-aways for you and then let’s talk about how your organisation can initiate its own form of digital disruption. The key themes, as I saw them, were:

  • Customer-centricity: hyper personalised online experiences
  • Fear of FANG (Stay with me, I’ll explain shortly…)
  • People first: human-centred, design thinking approaches
  • Innovation labs: providing permission to fail

1. Customer-centricity

Customers no longer need to support brands that they don't believe in. More than ever, brands need to put the customer first and really listen to their needs.

One way of bringing the voice of the customer inside your organisation is to use tools such as Net Promoter Score to identify those nuggets of gold that tell you how to improve your customers’ experience with your product, service or brand. Systematically using your customers’ feedback and channeling this to develop solutions to solve problems can be really effective.

Hacking the culture and actively employing change-makers into your organisation to create disruption is another way to turn the focus to the customer. Australia Post last year appointed a Chief Customer Officer who directly reports to the CEO. Customer-centricity is now at the C-suite level.

Investing in total immersion with your customers is what gets you to the place where you understand that people don't want a quarter inch drill, they want a quarter inch hole. Fundamentally, it’s about understanding your customers’ end goal.  

AMP took the concept of immersion right into the customer’s living space by going into people’s homes to uncover how they actually think and speak about investment products. What AMP found was that while it was talking about investments as fund valuations, customers were talking about investments as kitchen renovations. By connecting with customers on the basis of their end goals, AMP was able to better design platform solutions that really worked. 

2. Fear of FANG

The Big Four banks? No, Fear of FANG is fear of the big four online giants – Facebook, Amazon, Netflix and Google. Websites of big brands like these offer experiences that have elevated customer expectations beyond the previously established norm. They have used customer insights to drive innovation and in turn, raise the bar for others.

A case in point is Netflix automatically playing the next episode of a series to entice the viewer to watch the whole season. eBay is another example, pioneering the recommendation engine trend we’ve all come to know as the ‘You may also like’ section. 

3. People first

Diversity makes for an amazing team. Empower people to know that innovation is their responsibility regardless of where they sit in the organisation. 

AMP is again leading the way here, with the company’s Head of Design and Innovation Gareth Rydon, talking at the conference about how AMP is shaping its culture and changing the way people work with human centred design. The brand is moving away from traditional structures where people build walls around their expertise and instead switching to horizontal teams. Problem framing exercises such as ‘rose, thorn, bud’ methods (where things are identified as strengths, challenges or opportunities) are helping people to share and critique different ideas rather than just listening to the highest paid person in the room. 

4. Innovation labs

The fourth emerging trend of digital disruption was the creation of spaces in which to ideate and innovate. Also called ‘incubators’ and ‘innovation corners’, these are places where no commercial return is required and the focus is on rapid experimenting, prototyping and pilots. It’s a space where a minimum viable product is preferred over perfection – where you can have a bit of fun and embrace the small failures.

CommBank invites customers into its three innovation labs to be a part of the prototyping and ideation processes. In the brand’s own words, it’s “where we make people comfortable with the uncomfortable”.

But innovation labs aren’t just for organisations with big budgets. Kmart faces a challenging store environment with most stores built 40 years ago when the business model was very different. It created an innovation lab in one of its most challenging stores. The company engaged with employees at grassroots level to develop a new operating procedure that enabled staff to unpack, process and display stock more efficiently. This new procedure was a simple change, but it resulted in a 14 percent increase in sales.

So what should your organisation do?

Thirty-nine percent of Australian businesses believe they have little to no innovation culture. Trying to implement change in an organisation – digital or otherwise – is never easy, but here are my top tips:

Stop looking for a unicorn

AR, Internet of Things, Wearable tech. Focus elsewhere. Kmart implemented a process-driven innovation that lead to a double digit increase in revenue. What organisation isn’t going to be happy with that? Be open to different types of innovation: process, operational, product or operating model.

Kill procrastination

Chris Ball, Head of Partnerships at BlueChilli Group, epitomised the start-up mentality which any organisation is capable of adopting. His words of wisdom? “The best way to start something, is to start something”.

Do things that DON’T scale

Despite being a business with operations spread across 84 cities, Deliveroo speaks to individual customers on a weekly basis because it wants to obsess over the customer journey. Sometimes it pays to look at things from a micro perspective.

Hire the weirdos

Hire people who will innovate within your business. Employ people that have the experience and drive to be change-makers. And then allow them to do that rather than forcing them into the cookie cutter mould of ‘how we do things’. Give people freedom and ownership. That’s how you innovate.

Be led by example

Show examples of other companies implementing change and the success they’ve had. Look outside of your vertical to make changes within it.

You don’t need an enormous budget or team to make change happen. You just need the right culture and the right people. The critical thing is to make a start. Effective change does not have to be monumental change – quite often, it’s the small things that make the biggest difference.

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