Tuesday, July 16, 2024

How to chart a course for business transformation that incorporates DX, blockchain and any future innovations

In 1998, the marketing department at IBM spent a reported $40 million on an advertising campaign aimed at convincing businesses to do something that seems obvious today: offer e-commerce alongside traditional ways of buying and selling. Though they didn’t use the term “business transformation,” all those e-business commercials may have marked the beginning of the pressure being placed on organizations ever since.

Beyond using new technologies, for example, companies that wanted to succeed in e-commerce needed to develop new ways to market their products, change or expand their fulfillment capabilities and a host of other things. Many of them were probably barely through that particular transformation, however, when the next new thing came along.

Just look at how quickly cloud computing went from an obscure term to a movement whereby companies were told to think “cloud-first.” Or when mobile computing spurred similar calls for a “mobile-first” business transformation. The Internet Of Things, artificial intelligence and now blockchain all combine major opportunities with corresponding potential impacts on processes and operations across every business function.

Most experts will eventually admit that even “digital transformation,” (DX) which sounds more all-encompassing, should actually be positioned as an element of business transformation, which hints at closer alignment with objectives that really matter to companies.

Recent DX research, however, suggests many firms are starting to struggle with weaving in seemingly-endless new technologies into their business transformation programs. According to MuleSoft’s 2018 Connectivity Benchmark, for instance, 81 per cent of the more than 650 IT professionals surveyed said they anticipate an adverse impact on revenue over the next year if they fail to complete DX initiatives.

A similar survey of Canadian firms from consulting and accounting firm MNP, meanwhile, showed 86 per cent expect to go through business transformation in the next 12 months. While DX was one of the biggest driving forces mentioned, blockchain was cited by 46 per cent (even though one in five said they couldn’t define it).

“We tend to grab on to labels like cloud computing and Internet of Things and digital transformation, but the reality is that what’s taking place is more over-arching,” said Trent Bester, MNP’s senior vice-president of consulting. “We had two-thirds of companies saying they’re going though a complete change in direction. When you change that much — we’re talking about organizational structure, the makeup of the workforce — there’s more than technology involved.”

That said, Bester noted that his firm’s research revealed relatively low adoption of data analytics by 28 per cent of respondents, suggesting many companies may not be working with the best possible information to guide business transformation initiatives.

The B2B Difference

Some might argue that business transformation should be relatively straightforward — it’s all about working to become as customer-centric as possible. However the customer experience among B2B buyers may be different than what would work in a more consumer-oriented firm. In fact, three leaders from consulting firm Bain recently published an in-depth article in the Harvard Business Review where they discussed a framework they call ‘The B2B Elements Of Value Pyramid’ that gets at these differences.

Starting with functional value at the bottom of the pyramid, for example, the Bain framework shows that in some cases what may matter to customers is whether a product or service meets regulatory compliance needs or has the right price. Above that comes “functional value,” such as something that reduces costs or is scaleable. Above that is “ease of doing business value,” with elements such as the reduced effort of working with a company or its products, or its cultural fit with customers. The second uppermost layer looks at career value (will the purchase enhance the buyer’s reputation) with “purpose” — does the customer buy into your firm’s vision — on top.

According to Jamie Cleghorn, a partner with Bain’s Customer Strategy and Marketing Technology practices, the B2B Elements Of Value could make a lot more sense than merely looking at a discrete set of technologies, like those that encompass DX.

“What our clients struggle with is, they know they need digital but they don’t know what that means,” he said in an interview with B2B News Network. “Our digital group has adopted the Elements of Value as the primary lens they’re using to determine what’s really going to matter to customers going forward.”

If you decide to use Bain’s model to guide business transformation, Cleghorn said the results of whatever work is done can be evaluated by well-established metrics such as Net Promotor Score (NPS), which gauges the likelihood of customers to recommend a vendor to their colleagues or peers. Likely candidates include firms in sectors like technology and those with significant &D budgets who are contending with a disruptive force in their midst.

“Ironically, this can also be a breath of fresh air for companies at the commodity end the spectrum — the ones dealing with low margins and race to the bottom in terms of pricing,” he said, adding that the catalyst for true business transformation can be similarly random. “Sometimes the entrenched incumbents are focused on winning the battle and losing the war. They might be more interested in fighting their legacy competitors than they are their disruptive competitors.”

Enter ‘Imagination Intelligence’

Even if B2B firms use Bain’s pyramid, they may still face a complicated set of choices about what technologies to use, what changes to make and how to lead their organization through those changes. While it helps to be really smart or have a high IQ — and while more leaders are learning to develop their emotional intelligence, or EQ — others suggest there’s another way of thinking about the way decisions are made.

At a recent conference for HR professionals in Toronto, for example, Julian Chapman, president of a firm called Forrest Company Ltd. that specializes in organizational transformation, led a workshop in how to achieve “imagination intelligence.”

According to Chapman, imagination intelligence refers to decision-making that moves beyond the two most common ways business leaders make decisions — looking at “what is” (the current state) and “what should be” (their desired transformational goals). Instead, it’s an approach where leaders take more time to consider “what might be,” or the possibilities that could lead to courageous risk-taking.

Even though we often start out with high imagination intelligence as children, Chapman suggested that many business professionals resist the more playful thinking that leads to innovative ideas because the “real world” is putting too much pressure on them.

“It’s almost like a process of, ‘There’s other ideas out there? But I just decided,’” he said. “The tyranny of ‘do’ is deadly on organizations. It stops organizational thinking. Quarterly results become what drive us.”

Chapman suggested companies start by recognizing what kind of thinking models are strongest among their team. ‘Hard thinking,” for example, tends to focus on details that are tangible, impersonal and externally focused. “Soft thinking,” on the other hand, is internally-focused, subjective, intangible. Imagination sits somewhere in between, and the mistake we may make is in sticking to far on one side or the other, he said. 

“All thought is imagination. Language is an analogy for something that is in existence,” he pointed out.

So make room for more imagination in the boardroom. Look for the elements of B2B value that will resonate most with your customers. Then look for the right tools — whether they’re digital, mobile or based on blockchain — and start building an approach to business transformation that can adapt to whatever comes next.


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Shane Schick
Shane Schickhttp://shaneschick.com
Shane Schick is the Editor-in-Chief of B2B News Network. He is the former Editor-in-Chief of Marketing magazine and has also been Vice-President, Content & Community (Editor-in-Chief), at IT World Canada, a technology columnist with the Globe and Mail and was the founding editor of ITBusiness.ca. Shane has been recognized for journalistic excellence by the Canadian Advanced Technology Alliance and the Canadian Online Publishing Awards.