“Doing” Digital Isn’t Enough
You’d be hard-pressed to find an executive these days who doesn’t have a prepped response for, “What are you doing about digital?” But the term, “digital,” today means so many different things that it almost means nothing.
Just about everyone is doing something: studying their user experience, launching a mobile application, building a big-data repository, migrating to cloud infrastructure, automating a cumbersome process, etc.
These are all laudable projects: all of them move organizations closer to the digital horizon. All teach organizations important lessons about what customers really want.
Many executives, though, are learning that being digital demands far more than just doing digital (even if you do a lot of digital). What does it mean that an organization is going beyond doing?
Six characteristics of successful digital companies
- They assume they know nothing. As consumers win ever more power in the digital shift, companies are forced to abandon tried-and-true demographics-driven approaches to segmentation. They strive to treat customers as individuals. But how to know what millions of individuals want? Digital companies embrace Lean Startup principles to learn. They start with a hypothesis, test it, and draw conclusions from the data they collect. Over time, the digital web of a customer’s responses to these experiments form a halo of information, what Cognizant calls their Code Halo.
- They iterate. If experiments yield knowledge about customers, then you learn more by doing more. That means being able to quickly iterate through the process from venturing a hypothesis to testing it to drawing a conclusion. That’s how smart digital companies today can build customers’ Code Halos. The more complete this digital portrait is, the better organizations can predict customers’ interests in real time, offer meaningful options and add-ons, and deliver a more satisfying, personalized interaction.
- They give customers a voice. And listen to it! Once upon a time, a bad customer experience yielded little more than an angry living room rant to your significant other that “we’re never going back there again!” But the rise of social media and the ever-present threat of a complaint going viral mean companies need to take concerns seriously. Digital companies give their customers an outlet. Uber asks customers to rate drivers. Netflix asks viewers to rate movies. Amazon asks shoppers to rate products. Just as importantly, they closely monitor social media for signs of discontent—and they’ll chime in as needed to address complaints before an issue can get out of hand.
- They are relentless foes of friction. Did you ever think that hailing a taxi took too much effort? Uber did, so they made it quick and easy. Netflix wasn’t satisfied with eliminating the drive to the video rental store, so they simplified browsing with a list of top picks based on the customer’s interests. Digital companies distinguish themselves by removing friction at the point of sale to make the consumer’s interaction with them as effortless as possible. That means looking for ways to make improvements even before the customer may have seen them.
- They marry the power of data with creativity. Digital businesses thrive when they seamlessly marry interdisciplinary teams of designers, data scientists, technologists, and so on. An exceptional customer experience – one where your customers are delighted to use your product – sets up a powerful virtuous cycle. The more they use it, the more data you collect. The more data you collect, the more you can improve the experiences. Digital is more than number-crunching or dreaming up new ideas: it’s using each to inform the other. Digital companies are experts in combining knowledge and imagination to fuel innovation. At Disney, they call it “imagineering.” In your company, it’s the key to the future.
- They NEVER take a break. Successful digital companies continuously deliver—not just by being available 24/7/365, but also by leveraging their customer knowledge and market knowledge to anticipate emerging needs, match them with developing opportunities, and are the first to introduce new solutions to meet growing customer demand.
So how can you be digital?
Founder Elon Musk recognized that engineering and launching the car is only the insertion point for the customer experience. As the product is operated, its onboard computer captures millions of data points about that experience. Tesla builds Code Halos, for every driver, in every conceivable situation.
In turn, that can drive company strategy: what conditions to design for, what shortcomings need be addressed, where to build new charging stations, and much more.
Tesla learns from this information. A relentless foe of friction, it responds with nearly transparent software updates that not only fix problems and improve performance but add features. While they’re gathering data regarding product operation—marrying the power of data with creativity—they’re searching for ways to increase customer satisfaction and inform new features.
Then they deploy those new features digitally. (Quietly! At night! While it’s parked in your garage!) In a recent software update, Tesla improved the customer experience of every Model S owner by adding Automatic Emergency Breaking, Blind Spot Warnings, Range Assurance, Valet Mode, and more.
Tesla can do this because its differentiator isn’t a new car door or a sunroof, swooping lines or a super-quiet but powerful engine. These are all replicable by competitors. Tesla is all about the information being gathered, analyzed, and productively used to improve the customer experience. Tesla knows that becoming a digital company takes much more than having the latest technology; it takes having the characteristics of one.
What have I missed? What other characteristics do you think embody digital companies?
Let me know.
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