Who Really Makes Digital Transformation Decisions?
By Richard Fouts | June 19, 2013 | 0 Comments
More proof why customers rule in the digital age.
If you’ve ever participated in consulting engagements with management consulting firms (either as a seller or buyer) you know that transformation initiatives are pretty much led by what is good for the business. I remember during my tenure at Hewlett Packard when we hired McKinsey to reassess our go-to-market model. The decisions stemmed from why selling through partners, OEMs and alliances made good business sense – for HP, not necessarily the customer. Of course, we eventually backed the new model into a “voice of the customer” story, but the going in position was how to reduce sales costs and increase coverage. Our mantra was, “If it’s good for us, it’s good for the customer.”
That’s all changed. Perhaps it’s the unstoppable trend that customers rule. Or maybe it’s even coming from the influence of digital marketing agencies that historically begin any engagement with customer experience (for example, agencies such as R/GA, Razorfish and SapientNitro are clearly taking share from management consultants in the digital transformation consulting space).
But what’s also really notable: digital transformation consulting engagements are being driven more by marketing executives (who are usually more sympathetic to customers than COOs or CFOs). Many marketing executives are also eager to continue their migration from chief marcom offiicer to chief marketing strategist, sensing digital transformation as a good “feather in the cap” initiative to lead.
Whatever it is, driving digital transformation engagements with a vision for customer experience is becoming an accepted consulting technique, even amongst management consulting firms.
For example, when Thomson Corporation engaged The Parthenon Group to reassess its go-to-market decisions, it took a page from the Proctor & Gamble playbook, known for following consumers around stores and observing them in their kitchens. Thomson decided to try the idea out, realizing they didn’t really know as much about their end users as they should.
The exercise later become known as “three minutes” which combines observation with detailed interviews to learn what end users are doing three minutes before they use a product and three minutes after. The approach was so illuminating (the simplest ideas often are) that it evolved into a front-end customer framework in its third, possibly fourth generation. A majority of Thomson’s 32,000 plus employees have been educated in its principles. In fact, Thomson now estimates that 70% of the products and services in its businesses been developed through front end, customer-experience-driven approaches.
The sources of revenue has changed dramatically of course – 80% of the company’s revenue comes from digital (revenue that is also unusually repeatable, predictable, and profitable). A dollar of revenue now yields twice the operating profit it did ten years ago. It’s a good reminder that at the end of the day, customers are paying the bills.