Growing up in the digital age can be tough. Kids have information coming at them from all sides as they come in to a world that doesn’t seem to have an ‘off’ switch. As a parent, some of the best advice you can give a child about how to cope with the limitless stream of role models, popular trends and technologies is simply ‘be yourself’.
And that applies to companies, too.
Too often, we hear clients say they want to be like this start-up or that social network, without any regard for their own skillset, corporate character or working style. I have a deep-seated belief the most basic key success of digital strategy – in fact, any strategy – is to understand who you are – and then manifest and magnify that in your product, market and capability choices.
Going back to our superannuation example, a fund CEO’s digital agenda is defined by many choices such as what outcomes to target, how much to invest, what capabilities to spend money on, which ones to buy and which to build internally, to name a few. The variety and complexity of choices may seem daunting but there is a way to cut through the haze: first and foremost these funds must be themselves.
To help, we suggest clients select a digital model archetype or a hybrid (if none on its own fits the bill) and then tailor it to specific fund needs.
At Strategy& we distinguish five digital model archetypes that help define how companies leverage digital and which capabilities to focus on developing.
The selection of an archetype is more of an art than a science. In the superannuation example, it may require the fund leadership revisit enterprise strategy and customer value propositions. For example, if a fund is wholeheartedly dedicated to delivering lowest cost superannuation products to its customers, spending millions on a shiny new front-end design may not be the best choice. This fund may instead consider investing heavily in automation of its back-end operations, full integration of online forms for all high-volume processes and subsequent elimination of paper channel.
These digital archetypes are only good to a point – they are a useful reference in helping to set a broad direction. This direction is a basis for determining which capabilities the fund should prioritise and excel at.
The capabilities are all about defining, creating and delivering value to customers through a mix of internal and externally sourced activities. At Strategy& we find the “customer-back” perspective on capabilities the most useful in analysing and prioritising development.
For instance, a fund selecting the Distribution Optimiser play may organically choose to ‘spike’ in capabilities related to understanding customer needs such as data insights (to maximise conversion and cross-sell) and those supporting delivery of value proposition, such as channel management (to continually optimise channels for acquisition and retention efficiency) as well as communications and campaigns (to expand the share of wallet).
The spike capabilities should target an industry leading level of maturity – that is what the fund wants to be known for. The remaining ones are maintained or enhanced to the level required for the fund to effectively compete and enable the spikes.
Clearly, bringing on board best-in-class user experience and interface design expertise does not help to succeed in Experience Designer play if the fund does not have a solid (not necessarily leading) understanding of customer needs, which is in turn underpinned by data and analytics.
Clear definition of the target state capabilities is the cornerstone of a digital strategy. However, a good strategy should cover all the elements that were used in the diagnostic.
From a customer perspective it should define the target lifecycle journeys and interactions, determine customer experiences across products and channels and clarify the outcomes the fund aspires to deliver. To deliver against these experiences and outcomes the strategy should determine the target state capabilities, operating model and culture.
At this critical juncture in strategy definition it is also very important to ‘look up’ and ensure full alignment with the broader enterprise mission and vision. Any contentious issues such as whether to build an all-encompassing data collection facility despite our promise not to encroach on customer privacy should be resolved before progressing to detailed planning.
Now that we have identified all the musical instruments required for the concert (capabilities) we need to decide where to get them and how to put them together to produce beautiful music.