By Chris Perez
NOVEMBER 5, 2019 | STRATEGY
“It’s about thinking, ‘What would happen if we don’t invest in our brand?’”
It’s Tuesday in Downtown Austin (at an Austin American Marketing Association (AMA) event), and one of the panelists is discussing tonight’s topic: Digital Transformation.
Differing from similar terms in our ever-evolving organizational nomenclature — think digitization and digitalization — digital transformation is a shift in culture, practice, and learning. It’s a perspective that organizations need to have in not just serving their own clients, but also in guiding themselves and innovating.
But what exactly is it?
Opening remarks from Jose Villa, President of Sensis, quoted the definition of digital transformation found on Salesforce’s website: “Digital transformation is the process of using digital technologies to create new — or modify existing — business processes, culture, and customer experiences to meet changing business and market requirements … It transcends traditional roles like sales, marketing, and customer service. Instead, digital transformation begins and ends with how you think about, and engage with, customers.”
The evening’s expert panelists — Adnan Khaleel of Dell EMC; Lucy Moran of Dun & Bradstreet; Shana Nardecchia of Nokia; and Kathy Keanini of Picara Consulting — used their context and experience from a wide spectrum of positions and industries to discuss it.
For established organizations, digital transformation is a fundamental change in how they do business. It’s an opportunity to use the efficiencies gained by digitalization and digitization, to create new business models for today’s customers. Moderator Aaron Templer used the term ‘pro-sumer’ (a contraction of “professional” and “consumer”) to describe the volume of content we all consume, the rising expectations we have for finding what we want quickly, and the high level of personalization we look for.
Making this fundamental of a change often requires an organizational shift in perspective and culture. “At Nokia we had to reorganize our marketing team, and we had to absolutely have top-down buy-in to make it happen. You absolutely need an experienced consultant to help avoid some of the potential pitfalls,” explained Nardecchia as she described the digital transformation initiatives that Nokia has been working on.
This shift in thinking is required to compete today, because there has also been a fundamental change around distribution with the power shifting from the distributor to the content creator.
To provide context, Khaleel noted the need for businesses to think more open-mindedly about their competition and customers. Referencing a discussion with the CEO of Blockbuster, Khaleel pointed out how Blockbuster didn’t perceive Netflix to be a competitor, with the retail rental giant instead mentioning how their customers liked coming to the store and browsing the aisles — a sentiment that was true. True until customers found something that served them even better and more directly — first, through the delivery of that product via direct mail, and later through the instantly streamable digitalization of that product.
Netflix has further evolved their model to not just be about distribution, but to also be the content creator for what they distribute. The Netflix example is often raised because it describes so much about the adroit moves CEO Reed Hastings has taken – the investment made to offer reliable streaming, to distribute that content worldwide, to develop original content in the countries where its customers are. This has disrupted the entertainment industry. Movie theaters and production studios are now undergoing their own transformations, and the first heavyweight contenders enter the picture this month with the debut of Disney+ and AppleTV+.
Summing up, Khaleel stated, “If you’re not thinking digital transformation for your business, you risk extinction like the dinosaur.”
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Looking at digital transformation from another point of view, Moran warned of the pitfalls of a data-only approach. “It’s so important to have qualitative research behind the data you are getting … and we test out these assumptions directly from the customers through events.” This tactic for getting feedback is tangential to the models for design sprinting and fast prototyping that are being popularized in UX design today. At their core, these methods begin and end with the customer (not our own internal organizational biases), by giving the customer a role in the development process.
The evolution regarding the sheer quantity of media consumed by people today and the social aspect of that consumption have created a pivot from promotional-based marketing toward relationship marketing.
The panel noted that the models are changing so that we can no longer interrupt people through paid media. Instead, the advertising market has shifted more toward earned and owned media.
Also discussed was the importance of talking more boldly, and authentically in campaigns. Nardecchia commented, “We need to trigger an emotional response.”
With the panel portion of the event shifting to questions from the audience, one attendee asked about the role security plays in all this. Keanini, emphasizing security’s importance, stated, “It’s important for your customers, but it’s critical in vetting partners for your organization. It’s about getting the best-in-class partners for business.”
Referencing Target’s monumental data breach in 2013, Keanini noted that the security practices of the third-party vendor, identified as the source of the breach, could have been more heavily vetted. Investigations concluded that the vendor had been using a free version of an anti-malware tool to detect malicious software on its systems.
Another audience member asked the panelists, “What are the skillsets you look for in hiring?” Nardecchia noted, “The most difficult talent to find is technical marketing knowledge. How are you helping Salesforce talk to Marketo?” The other panelists agreed, highlighting the rise in online education and career shifts combining both technology and marketing.
For organizations, continuous learning models and technical competencies are the new expectations of work. There’s not only a new customer we must build our businesses around, there’s also a new employee. To adapt and deliver to pro-sumers, we have to be pro-sumers ourselves. And if we can adapt our organizations to these new models, we can gain efficiency and become more competitive in the marketplace.
Perhaps best summarized by a quote from Khaleel at the end of the panel discussion: “If you are trying to be a company that is always relevant, you are always changing. Digital transformation is never done.”
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