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The pursuit of business efficiency through digital transformation

Business efficiency isn’t just a question of improved profitability. Efficiency should encompass a wider range of attributes that you need to prioritise and then focus on improving. After all trying to blindly improve profitability  is far too broad a challenge. Like eating the proverbial elephant, you need to chose which bits to eat first.
At 768 pages, and with a £50 price tag, Operations Management by Prof Nigel Slack is a heavy weight tome that takes some effort to read through. However there is a very good definition of how efficiency can be defined:
efficiency-1
Cost – Ability to control operational costs and deliver within budget
Quality – Ability to deliver work to expected quality standards
Dependability – Ability to deliver projects and outcomes according to expectations
Speed – Ability to complete work quickly and in accordance with expectations
Innovation – Ability to develop new and creative solutions that fulfil business needs
Flexibility – Ability to react to new requests and requirements
Naturally, one might look at this list and think “yes I want all of these things”. Good prioritisation happens when each attribute is put into conflict with the others.

Prioritisation through conflict

Would you rather deliver a project late and perfect, or on time with flaws?
What is more important; getting the job done quickly at any price, or working slowly to control the budget?
These types of questions can help you determine what is most important for your business as they place each attribute up against the other one.
The following statements can be used to determine where priorities lie using a likert rating of how much the respondent agrees or disagrees with each statement:
  • Scheduled work is more important new requests – (Dependability vs Flexibility)
  • Project timelines may slip to ensure that costs do not overrun – (Cost vs Dependability)
  • Quality is important regardless of the price – (Quality vs Cost)
  • To complete work quickly, errors are acceptable – (Speed vs Quality)
  • We should be flexible to change even if this slows things down – (Flexibility vs Speed)
  • Failing to achieve project benefits is ok if the project is completed quickly – (Dependability vs Speed)
  • Keeping costs under control is more important than being flexible to new requests – (Cost vs Flexibility)
  • Quality of the output is more impotant than the schedule – (Quality vs Dependability)
  • Speed of delivery is more important than the cost of delivery – (Speed vs Cost)
  • We need to be more flexible even if these means quality drops – (Flexibility vs Quality)
  • Time lines are more important the quality – (Dependability vs Quality)
  • Costs can increase to ensure that projects are delivered rapidly – (Cost vs Speed)
  • New requests should not be allowed to affect the quality of work – (Quality vs Flexibility)
  • Getting work completed quickly is more important than the outcome – (Speed vs Dependability)
  • We need to be more flexible regardless of the cost – (Flexibility vs Cost)
  • We should achieve project objectives regardless of the cost – (Dependability vs Cost)
  • Quality can be compromised to keep costs down – (Cost vs Quality)
  • It better to be slow and careful, rather than fast and sloppy – (Quality vs Speed)
  • Being quick is preferable to being flexible – (Speed vs Flexibility)
  • It is acceptable for a new request to delay an existing project – (Flexibility vs Dependability)
  • Projects can be delayed to add new features to them – (Innovation vs Dependability)
  • We should spend lots on innovation and R&D – (Innovation vs Cost)
  • Taking risks and cutting corners is acceptable when innovating – (Innovation vs Quality)
  • Innovative projects may slow down the delivery of business as usual – (Innovation vs Speed)
  • Being innovative is more important than being flexible – (Innovation vs Flexibility)
The following is taken from the output of client work from a couple of year’s ago:/
efficiency-2 efficiency-3

Finding the digital solutions to efficiency goals

With a clear focus on what matters most you can begin experimenting with new tools that will improve efficiency.
For cost management you may want to use the Basecamp, Salesforce or potentially create something quick for cost management in Knack. Whilst I’m a fan of Excel in certain settings, I find it used all too frequently to manage complex cost situations.
Dependability and Speed may require the use of MavenLink or Jira tools. Trello may also be a decent way of creating an online Kanban board.
Innovation may require improved corporate communication. Evernote, Wiki/Confluence, Dropbox and Slack could be great tools.
My recommendation is to try these tools on a limited roll out in a team and then, if it works, expand the trial and create better operational guides for the corporate use of the tool. Just ensure that you start in the area that is most important for your business/team.
Another crucial matter is to consider integration with these new digital tools. Many come pre-packaged with easy to configure integrations to other popular tools (often creating their own app store or partner eco-system). For everything else, I can’t recommend the use of Zapier and IFTT enough.
What tools have helped your teams become more efficient?

Further reading:

Posted in Strategy

Halfords: Eight Steps to Put Customers in the Driving Seat

In my LinkedIn post on Halfords’ new customer strategy, I set out an eight stage plan to maximise customer lifetime value. Read more ›

Posted in Business, Strategy

The Lean Digital Transformation

Can digital transformation be accelerated by rapid and continual iterations of building, measuring and learning? Read more ›

Posted in Strategy

Six ways to drive forward Digital Transformation

A lot of businesses are stuck at the point of execution. After the ideas have been generated and the plans laid; change grinds to a halt and the hoped for strategic transformation is never fully realised.

So how do you strike forward positively with strategic change? Let me provide six ideas:

  1. Build your transformation around a big, yet still realistic, opportunity. Senior management should understand and be united in the pursuit of this opportunity.
  2. Transform from the bottom up. Gather a team of bright, motivated volunteers to form a steering committee that is tasked with achieving the opportunity.
  3. Allow the volunteers to develop the strategic initiatives. Senior management are there to guide and support not instruct.
  4. If your vision is right and the energy is good, you’ll continue to build out the volunteers who want to be involved in the transformation. Create teams filled with multi-disciplined enthusiastic volunteers.
  5. Where well formed initiatives exist, provide funding and/or resources to get things moving.
  6. Celebrate every success (big or small) to create a culture where change is rewarded.

PS These aren’t my ideas – go read John Kotter’s article Accelerate at HBR for the full guide on how to drive strategic change.

Posted in Strategy

Billion dollar start-ups are turning conventional business wisdom upside down

Something is wrong. Very wrong.

Either conventional business wisdom based on years of research and experience is wrong or start-up funding is wrong (and massively overvaluing the ever popular unicorn start-ups).

Let me explain…

Shasta Ventures looked back at the Series A funding of 25 start-ups that are now worth a billion dollars each. This includes digital darlings such as Uber, DropBox, Airbnb, and WhatsApp.

Strikingly, the attributes of these start-ups are in contrast to conventional business wisdom and behaviour.

They had easy-to-dismiss ideas. How often does a project or initiative get shot down in your business for being too easy to dismiss?

They went after competitive markets. Ever been told that something won’t succeed because a competitor is already doing it? Competition proves that there is a market.

They sought to reinvent consumer behaviour by creating a superior customer experience. I see too many businesses aping existing consumer behaviour with a poor customer experience.

They were built by untested founders not by an experienced board or management team. Sure some “grey hair” experience arrived later, but the critical point is that it started with entrepreneurs with little on their CV. Time to start rethinking top-down approaches to corporate strategy.

They didn’t have a monetization model (yet). Perhaps its a consequence of the credit crunch but there is a real risk aversion to making investment decisions without thorough number crunching of IRR, ROI and NPVs. More courage is needed in unprovable models.

Time will tell whether conventional wisdom or start-up funding is right.

For Executives seeking to copy the success of these billion dollar digital start-ups its time to really shake things up.

  • Stop dismissing ideas that are easy to knock back. Embrace simplicity.
  • Don’t avoid competition. Chase it down and beat it.
  • Invest in creating superior experiences that transcend current best practice and market trends.
  • Listen to your teams. Innovate from the bottom up.
  • Don’t get hooked on short-term ROI. Play for the long-term.

These principles may actually be the real heart of Digital Transformation.

Posted in Strategy

Digital transformation strategy’s role in defining overall corporate strategy

Question: What’s the difference between digital transformation strategy and corporate strategy?

I’d argue that the main difference is one of focus rather than scope. Digital Transformation Strategies should contain detailed content on technnology trends and implications for the business. However it should not be limited in the scope to a specific operational or functional area of the business in the same way that a corporate strategy is all encompassing.

A recent paper by Christian Matt, Thomas Hess and Alexander Benlian entitled “Digital Transformation Strategies” contains the following framework:

digital-transformation-strategy-framework

It encompasses everything that I’d expect to be in an overall corporate strategy, particularly in an organisation that is aiming for transformation. It covers technology usage, value creation, structure and finance.

The two are so close in scope that I find myself asking, do organisations need a separate document for digital transformation strategy or should it be all wrapped up in the corporate strategy?

I’d argue that a digital transformation strategy does have an important role to fill in defining what a broader corporate strategy should contain. That overall strategy then drives what the functional and operational plans should look like.

It’s traditional top down execution of strategy but one where I believe digital transformation should be at the top.

Posted in Strategy

Parenting and business transformation

Neil Perkin recently posted an interesting excerpt from a research paper to his blog entitled the Three Types of Problem in the World. Raising a child is considered the most complex of the types of problem and for this reason it bears a number of similarities to business transformation. Read more ›

Posted in Strategy

Making more with less through digitally driven revenue efficiency

When I attempted to identify UK’s digital leaders, I analysed companies based on their Profitability and Revenue Efficiency. The latter is an often overlooked element of digital transformation that effects the customer experience, operations and business model development. Read more ›

Posted in Strategy

Implications of “Mobile Only” as a Business Strategy

Due to client commitments I wasn’t able to attend Econsultancy’s Future of Digital Marketing event. Reading up on the event afterwards, one of the quotes that struck me came from Ashley Friedlein:

Not mobile first, mobile only!Ashley Friedlein
Read more ›

Posted in All Channels, Business, Multichannel, Strategy

An organisational structure for marketing and digital

Carte blanche for organisational structure is a rare treat for executives. Often they inherit a team structure or have to shape a team within an existing organisation structure. But what would happen if we had to build a marketing and digital team without any legacy? How would the team be structured? What roles would be created?

This post is a response to Ashley Friedlein’s recent post: With a blank sheet, what organisational structure would you choose for marketing and digital? Highly recommend you read this too (after my post of course)!

My route to developing a structure is based on Peter R Scholte’s work in the Leader’s Handbook. The starting point – as shown in the diagram below – is to define the purpose or vision. This statment is an altruistic statement of what the organisation will do for others.

digital-organisational-design

Once a purpose is set, the process for delivering that purpose can be created. The process then proceeds to shape the tasks that need to be carried out. From the tasks come capabilities which can then be translated into roles. Each role then becomes part of the organisation structure.

A structure for marketing and digital

Let me begin with the purpose for marketing and digital:

“Marketing and digital’s purpose is to create easy-to-use, memorable, engaging, and personalised customer experiences across web, mobile app, call centre and stores. Best endeavours will be made to help prospective customers discover our business and engage with it”

From this purpose a process can be designed. I’d shape this as:

  1. Design the customer experience
    • Customer research
    • UX design
    • Creative design
    • Prototyping
  2. Create the customer experience
    • Web development
    • Mobile app development
    • Content production
    • Quality control
    • Project management
  3. Measure and optimise the customer experience
    • Data analysis
    • Reporting
    • Testing
  4. Find customers
    • Search engine marketing
    • Social media marketing
    • Direct mail
    • Affiliates
    • Call centre
    • Sales force and account team
    • TV advertising
    • Other paid media
  5. Engage customers
    • Email marketing
    • Account team
    • Social media
    • Call centre
    • Mailings

There are supporting processes alongside this:

  • Team management
  • Financial control

The process above, highlights both the tasks and capabilities required in order to fulfil the process. From this I can draw out a simple set of roles:

Digital and marketing organisation structure

Digital and marketing organisation structure

This is my take on the structure, a single director of marketing and digital (potentially a Chief Customer/Marketing Officer) who either sits on or reports to the board. Below them is a set of operational heads who are responsible for the customer experience, acquisition of customers, and customer engagement.

Further Reading

First of you need to read Ashley’s original post: With a blank sheet, what organisational structure would you choose for marketing and digital?

I also recommend that you pick up a copy of Peter Scholtes’ book The Leader’s Handbook.

Thanks as always for following the blog. To ensure that you get updated on new posts, you can subscribe for the weekly email newsletter here.

Posted in Strategy
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