Digital Transformation is a constantly changing landscape

Perhaps the most telling remark of The Telegraph Digital Leaders conference in London last month came right at the start. Introducing the event, Telegraph Media Group Deputy Editor of Content Allister Heath said that while it’s great to understand digital transformation, “the challenge is to implement it”.

It was a point echoed during a later panel session by Luke Vinogradov, Vice President Digital, Europe, McDonald’s. “There’s been a lot of talk about the ‘what’ and ‘why’ of digital transformation. There are fewer and fewer doubters inside the organisation,” he said. “Now we we need to talk about the ‘how’.”

Recurring Themes

It was this question of ‘how’ that drove the recurring themes of the day: customer-centricity; the rise of a new type of competitor; structural business change; attitudes to risk and failure; and the need for new metrics.

A number of speakers talked about the drive to put the customer at the heart of a company, and what that means. Mark Lien, Director of Innovation and Digital Development at Lloyds Banking Group made a crucial distinction.

“Customers’ fundamental needs haven’t changed,” he pointed out. “Their expectation of how services will be delivered has.”

Lloyds’ response has been in two phases. The first was to digitise the channel, creating a single digital platform and a hub to house digital skills and act as a catalyst for change in the rest of the business. The second, which is currently under way, is a three year process of taking 10 key customer journeys, and redesigning and transforming the customers’ experience of them.

This question of timescales was picked up by Sky’s Group Chief Financial Officer and Managing Director, Commercial Business, Andrew Griffith in his description of the company’s approach to innovation and change. He told the audience that Sky no longer looks ten years into the future in its thinking, but concentrates on three to five years ahead. This echoed a point made in Lien’s presentation, that what was right in digital for the bank now wasn’t what had been right three years ago, and wouldn’t be right in three years time.

And discussing the need for a Chief Digital Officer in an earlier session, Accenture, MD, Head of Digital Strategy, EALA Narry Singh said that while Accenture thinks its good for companies to have a Chief Digital Officer now, “if you have one in five years time, you’ve lost the plot.”

New Competition

Singh talked about the two types of clients Accenture sees at the start of digital transformation; those who are reacting to competitors coming to eat their lunch, and those who want to eat someone else’s lunch.

“Competitors are coming in from new areas and they play by a very different set of rules,” he explained. “Most of our clients have built their success on owning assets. The new competitors such as Air B’n’B and Uber deliver access. That means the marginal cost of supply for those people is zero, compared to the old models in their sector. The economics of competition have changed.”

But Singh had an encouraging message for established businesses. Asked about whether legacy businesses have an advantage in terms of their budgets and customer numbers, he replied that there’s never been a better time to be an incumbent in a market, and to attack that market.

“I’m always amazed by the assets that big companies don’t know they have,” he said. “The key question is what would a technology company do with your assets.”

“You have diamonds in your garden–you just need someone else to tell you they’re diamonds.”

This point was reiterated in the afternoon by Tony Grout, Head of Agile Transformation at Lloyds Banking Group and former Head of Agile Transformation at Skype, talking about how to approach experimentation.

“Big organisations can run multiple experiments far more easily than start-ups,” he said. “You can do more than you think.”

People Over Technology

While all the day’s speakers agreed that it’s crucial to put customers at the heart of the business, once again it was the ‘how’ of doing this that caused discussion. Stephen Kneebone, Chief Information Officer at Nissan Europe struck a chord when he said “customer opinion is the driver; technology is the strategic enabler of our objectives”, and speaker after speaker reiterated the importance of people over technology.

Simon Miles, Digital Director at Coca-Cola Enterprises–one of the largest independent bottlers in the Coca-Cola franchise system–argued that companies put too much focus on technology and too little on people. For him, the key question is whether digital programmes are making things faster, cheaper and better for shoppers.

Heather Smith, UK Marketing Director at insurance giant Aviva, also addressed the question of ‘how’. She described a company with “a lot of brands, and lot of offers” and admitted the challenge was to make it all into one thing facing the customer. Part of her solution came from Aviva’s call centres.

“The customer contact centres are driving our digital transformation, because they see all the failures,” she explained. “They can tell me everything that isn’t working, and they have loads of ideas.”

Smith went on to describe Aviva’s move to share all the customer feedback across the entire business via a feed, so that people can look through it in their own time. “It’s making lightbulbs go on all over the organisation,” she said.

But Accenture’s Singh raised an important point about the way the new competitive set is raising expectations of customer experience.

“Customers don’t care what industry you’re in. They don’t compare banking apps to each other; they compare them to Uber.”

The Response Challenge

As a number of speakers made clear though the day, listening to your customers is only the beginning of the story. You then have to be able to respond. Kai Gait, Global Digital Director at GSK, likened organisations to a treacle sandwich, where everything’s good at the top and the bottom, but there’s a sticky mess in the middle that slows everything down. Other speakers talked about the challenge of presenting digital initiatives to the board, and in particular the CFO.

“It’s hard to build a business case when you don’t know how things are going to evolve,” Singh said. “The metrics tend to be very different, and you need to educate the CFO about that.”

Asked about metrics by an audience member, Singh highlighted the need to focus on distribution and engagement, at least in the early stages. And he cautioned against what he called “premature monetisation syndrome”. “If you try to monetise something too soon, you’ll kill it,” he said.

Singh also highlighted how companies manage risk as being critical, a point that many other speakers dealt with.

“Some things should fail,” Singh said. “So you need to measure risk like a fund manager would.”

Miles explained that, at CCE, failure is acceptable as long as people learn from their failures and apply the lessons to the next thing they do.

“The missing word in the discussion is scale,” he said. “The reason we experiment is to learn to be able to scale.”

And Aviva’s Smith described a similar culture. “Our CEO wants us to be failing fast,” she said. “He’d much rather we’re doing something and learning from it.”

Lien from Lloyds Banking Group also spoke up for the importance of getting out there and doing things.

“Innovation,” he said, “is only an idea until you deliver it.”