We spoke with business consultant, digital strategist and "Blogologist", Alister Cameron, about the process of digitisation and the challenges mid-sized enterprises face when adopting digital systems. In part 1 of his response to our questions, Cameron explores the role of the CIO in the process and considers the best approach for addressing emergent channels for communication.
Chris Kennett (CK): What are the digital challenges for medium-sized enterprises? How do they differ from small and large enterprises?
Alister Cameron (AC): I believe the single biggest challenge that digital adoption presents for the medium-sized enterprise is the frequently disruptive nature of that change, and the failure of the CEO and executive to grasp the characteristics of disruptive change.
The last decade especially, has shown that, for many businesses and industries, digitization is scary. A recent Gartner CIO report confirms - because it is truly disruptive, and is bringing with it new customers and new market opportunities, it in turn, demands a business model review, or even entirely new businesses.
This is scary for the average CIO because he/she is being given the CEO's problem to solve. In simple terms, it is reasonable to delegate a sustaining technology innovation to the CIO. That's their job. But innovation that is undertaken to meet the challenges of disruptive technological change is not the CIO's problem alone; it must go back to the CEO and the executive leadership in order to ensure that its impact on the business model is fully and properly assessed.
The necessary process and discipline here is to urgently and diligently investigate the nature of the digital opportunities and challenges, in order to separate out those innovation opportunities which are sustaining in their nature, versus those which are disruptive in their nature. The latter will challenge the business model itself, and may either require adjustment (small and large) to that model, or may suggest a new business entirely.
(CK): How do you go about introducing a tech shift for a medium-sized enterprise?
(AC): The smartest mid-sized enterprise CIO I know recently reminded me: "There is no such thing as digital strategy; there is only business strategy." In a similar vein, I'm not sure if there is such a thing as a pure-tech shift. If there is, it's probably trivial in nature. All other shifts or innovations have a technological element to them, but relate to a strategic shift and are thus as much a business problem, not a technology problem alone.
So, without meaning to sound trite, I'm suggesting that technology innovations work best when they're not treated as a technology matter alone, but are evaluated carefully for their cultural and process impacts as well, and are managed properly as part of a broader program of change. The technology is usually the easy bit; taking people safely on the ride is the hard bit.
Tactically, I'm a firm believer in the Lean approach of failing fast. Our innovation efforts should look like a never-ending series of low-cost, fast-turn-around experiments. Lean and Agile principles are all about maximum learning for minimal waste (read: cost). Good strategy is about setting direction, but these tactics of rapid experimentation ensure we remain highly responsive to the market. Fortunately, the more digital your products and services, the more cost effectively and rapidly you can run in-market tests and surface valuable and actionable insights. Ask your web developers...
(CK): Our mid-sized business insights report said mobile and online will be the most important channels for marketing in 3-5 years. Is this for sales only? What other business functions are being affected by growth in mobile and online?
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(AC): When it comes to the marketing department, the danger is to miss out on the biggest opportunities because we're asking the wrong questions. Trying to work out which channels to market will most benefit from digital innovation is certainly helpful, but the danger here is that we focus on the technology, rather than on the customer. Further, that if we do focus on the customer, we're still asking the wrong questions.
Harvard Business School's Clayton Christensen has written, "Most companies segment their markets by customer demographics or product characteristics and differentiate their offerings by adding features and functions. But the consumer has a different view of the marketplace. He simply has a job to be done and is seeking to 'hire' the best product or service to do it."
A school of thought and a set of practices are emerging in response to this insight, called Jobs To Be Done (JTBD). This approach is designed to ensure that customer-focused innovation delivers valuable market insight and "out-of-the-box" thinking, and is not constrained by existing segmentation models or other model constraints. Aside from just better insights, a side-effect I've observed from JTBD is a renewed enthusiasm in marketers for deeper collaboration and engagement with customers.
Learning and applying JTBD is one way marketers are uncovering opportunities for product and channel innovation with a rigor and level of insight that insulates them from knee-jerk or unsophisticated reactions to digital innovation.
Stay tuned for Part 2 of our Q&A with Alister Cameron, where he explores inhibitors to change and what it is to be truly customer-centric. If you'd like to know more about Alister, please follow him at @alicam or read his blog at http://www.alistercameron.com/
This is another edition in the series of Q&A sessions with business leaders and experts. If you'd like to be involved in a Q&A session with Optus Business, get in touch with us at @optusbusiness on twitter or email us at email@example.com.
By Chris Kennett, Optus Business Industry Manager. More from Chris on Twitter: @ChrisRKennett