What makes a digital business?

Digital technology has redefined how organisations can add value to consumers and citizens. Speed of adoption by consumers has raced ahead, powered by cheap, reliable, accessible technology and catalysed by a new type of business, the digital business, that starts with a consumer problem and builds technology, teams and strategies to solve the problem better than anyone else, disrupting the established businesses. Larger organisations, whether private or public, must analyse and understand how to harness this transformation and disrupt themselves or they risk becoming obsolete (or in the case of public services not fit for purpose). The public sector is different to the private sector, most importantly in terms of size, sensitivity of data and comfort with risk: So how can the public sector change, embrace an entrepreneurial mindset and ensure they are able to continue to deliver the level of services that their citizens expect in the digital age?

A decade ago calling a business ‘digital’ meant that it was dependent upon technology. Today every business can and should be a digital business. A business is digital because of people, both the people it serves and its employees.

Technology has had the effect of humanising business. Simultaneously allowing business to listen to consumers and better understand them, whilst at the same time handing them easy to use technology that will allow them to design their services around the consumer, often quickly and at scale.

I would define a digital business as one that is:

Continually generating insights that will allow you to more effectively invest in the right technology to optimise the customer experience

A successful digital business is really just business in the digital age. A successful organisation today can learn a lot from the systems, processes and methods used by those tech companies who were early digital adopters.

Collaboration should be designed into your business. Steve Jobs designed the new Pixar building in 1999 around ‘unplanned collaboration’. Google has a rule that nowhere in their offices is more than 150 ft from food. These are successful businesses and they have been designed around collaboration. The sheer scale of the projects faced by Pixar or Google is often immense, requiring people with disparate skill-sets to cooperate. Action is more powerful than thought, and buildings are more permanent than actions.

Be excited about the quality and speed of customer insight. Social media provides a way for us to listen proactively to our prospective customers and learn what their pain-points are in their own language. We can also discover what they are saying about us. We have at the click-of-a-mouse a huge amount of data that shows us exactly how the customer is behaving on our website. And we can use machine learning to start to extrapolate from the data we do have to predict what we don’t know.

7 Priorities for Digital Change

The ADBL has a framework which we use called the 7 priorities for driving digital change. Alongside ‘taking the customer’s perspective’ they include:

  • Innovate and iterate
  • Unlock your data
  • Optimise digital channels
  • Drive the digital mindset
  • Maximise evolving tech
  • Disrupt yourself

We shall be looking at some of these in more detail.

1. Understand the consumer

The digital imperative

Consumers are more powerful than ever. The more we listen to them and understand their needs the more we realise how high their expectations have risen and continue to rise, driven higher by new products and services. Brand loyalty has been greatly diminished with consumers seeking out the best possible deal, confident that they will find the level of service that they require. Technology has created consumers who have niche interests and sophisticated tastes, who are highly demanding and technically literate. A lot of businesses need to take the first step and understand this change for their own customers, and only then do they understand the importance of driving digital transformation not only to catch up, but to stay ahead of consumer’s expectation. It is an imperative for change, the digital imperative.

Use the language of the consumer

“Everybody will always say we start with the customer, etc., but then you hear it in the language. They use the lingo of the industry – the language of the insiders, not the lingo the consumer would use. The consumer doesn’t understand the lingo. The customer gets lost in that.”
Patrick Gaultier, Amazon

Start with recognising your customers. Consumers expect brands to be able to recognise them across devices, to use the latest technology to serve up what they require when they need it, to make their lives simpler and easier. They expect the world to rotate around them. In the private sector there are plenty of new tools that can be quickly added to websites to optimise the customer experience. But in the public sector it can often be more of a challenge, resulting in a much worse customer experience.

Building a brand is more important than even.

Constantly seek to delight and optimise the customer experience from the first email you send them, to every touch point and interaction on your website. Brand is more important than ever in the digital age, but it is now multi-platform, multi-faceted and far more fragile. Don’t underestimate the effect of this on your brand, nor ignore the opportunity to turn customers into ambassadors.

2. Digital Citizens

Are citizens just consumers, who pay tax?

The same demanding consumers are also citizens and those in local government need to understand their requirements and be able to deliver on them. This is applicable both for the delivery of local government services, as well as the engagement of citizens in the democratic process, or using technology to empower and build community.

Consumers spends 8 hours a day on their electronic devices experiencing seamless, cross platform customer service. Think of Amazon recommending a book to you and being able to deliver it tomorrow. Or think of Dominos remembering your favourite pizza, and allowing you to order it using voice control on your smart-watch and then track it as it is delivered via GPS. Now imagine pulling these pumped up consumers away from their mobile and forcing them to fill in a form and tell them that they will have to wait several weeks, without any tracking service.

Local government has to continually deliver on the expectations of their citizens and they must also do so within an environment that is not necessarily conducive to digital business.

The citizen doesn’t care about your crappy IT

Citizens don’t see departments, they see organisations. Frankly, they don’t care that you haven’t been able to obtain the right data from another department in your council, or that in order to answer their query you have to access to separate databases, the legacy from major IT investments of the past.

Case Study: Public access to data

The Singapore government provided access to more than 3000 public datasets and co-created more than 100 apps with citizens, to solve problems which they had identified:

“Governments must take on the roles of a facilitator and enabler—to collaborate with the public, private, and people sectors in creating new solutions, new businesses, and new wealth.”
Chee Hean Deputy PM Singapore

Of course there are a number of other challenges uniquely faced by those in local government including the additional scrutiny attached to spending tax payers’ money, which often hinders the creation of an agile ‘test and learn’ approach, with its inherent risk. But the risk of not investing in new methodologies and process is much higher, particularly over the longer term. If you miss the opportunity today then you will be continually trying to catch up. In the time it takes you to start your digital transformation process your competitors will have hired the best people and will already have new products in development.

Whilst there are risks in adopting digital processes, they are outweighed by the benefits of using digital technology to improve the speed and scale of service in times of austerity. And digital technology offers opportunities for local government beyond just providing services, to increase local democracy and accountability and to empower citizens.

3. Disrupt or get Disrupted

Brian Solis has likened what’s happening to modern organisations, to natural selection. He calls the process, “Digital Darwinism”, with the suggestion that businesses who cannot adapt will die and only those who are constantly evolving will retain their customers and flourish.

The largest organisations have the resources to invest in setting up ‘labs’ to attract new ideas and talent into the organisation, allowing them to test and learn within a controlled environment. At the other end of the scale, startups are designed around new ideas. But it is the businesses in the middle who are currently facing the biggest challenges, since they don’t have the resources to invest in ‘labs’, or attracting the best talent and they are seeing their market share being eroded by nimble startups. Even those businesses who started 5 years ago and were highly disruptive are now finding themselves being disrupted by a second wave of startups who have built a business plan around the weaknesses of the incumbent. So how can you ensure that your organisation continues to innovate and stay ahead?

4. Measure and build digital capability

Technology also offers us the opportunity to improve how our organisations are run. Not only does it make us more collaborative, but it also allows for greater governance as well as providing highly efficient project management tools. So what are the skills and capabilities required to be able to operate within this new environment?

What is digital capability?

Specific skills, knowledge or ability to use digital technology to create an efficient business.

Before you can ensure your organisation is digitally capable, you must understand what those digital capabilities are and identify which are most important to your organisation. Only then can you start to develop and build those capabilities across every level of your organisation.

Case study: Digiskills

At the ADBL we have use developed a framework to assess an organisation’s digital capability called ‘Digiskills’. It is comprised of 8 different capabilities that we have benchmarked across over 300 businesses. Organisations can now use the ADBL’s Digiskills assessment tool to measure their own digital capability against the industry benchmark for each of these 8 capabilities. The capabilities are:

  • Talent, culture and chance
  • Unlocking data
  • Digital channels
  • Taking the customer’s perspective
  • Experimental product development
  • Digital priorities and vision
  • Responsive IT and digital literacy
  • Efficiency in supply chain and operations

Being able to develop your existing team, as well as being able to identify any gaps that need filling is an important first step when starting a digital transformation project.

5. Tapping the potential of technology

There are now thousands of new companies that are harnessing the latest technology to provide products and services that we need and some that are pioneering new products and services that we don’t even know we need yet! Businesses should be learning from these pioneers, both what are the new trends so that we can start to prepare, and also to examine how these pioneering businesses operate and what we can learn from them about efficiency, capability and collaboration.

Bots, Blipps, Blockchain and IoT

Here are four emerging technologies that I think hold immense potential to disrupt:

Many will have heard of so called chat-bots. These are small programmes that have been created to interact with your customers using either a simple set of rules, or more complex AI, to be able to provide useful responses. Companies such as Facebook are opening up their messenger platform to bot developers allowing brands to engage with their consumers on the platform that they use the most, in the most engaging manner. Enfield council has recently started trials of ‘Amelia’, a humanised customer service rep that uses machine learning to answer questions from residents. When Amelia doesn’t know the answer it hands the question to a human being, but keeps listening so that it can learn for next time. A perfect example of technology providing a scalable solution to the increased demands of consumers.

Blippar started off life with the ambition of augmenting reality, you simple held up your smartphone to look at the world through a digital lens with added layers of information.

Blippar has now set itself the goal of becoming the visual search engine. What this means is that you can now point your phone at any object in the world and Blippar will recognise it. Not only that, but Blippar can recognise brands, products, faces (from your photos) and even locations. The AI is already pretty smart and of course it constantly learns. As the uptake of wearable technology increases, expect this sort of searching to become ubiquitous.

The blockchain began as a distributed ledger to authenticate the buying and selling of bitcoins around the world. The beauty of bitcoin is that the owner of each bitcoin is recorded in this ledger that is distributed across multiple locations. When someone buys a bitcoin, the ledger is updated providing a publicly available record of who owns what. It’s pretty robust too, the blockchain that underpins Bitcoin has never been hacked. Blockchain is highly versatile and can be used as a global, highly accessible, yet highly secure way of recording valuable information about anything.

International banks are using it as a simple, cheap and secure way to transfer international currency. Land registries in developing countries are using it to keep centralised records of property rights. Pharma companies are able to track the provenance of their drugs across the world. Development agencies can track foreign aid and ensure it reaches its destination. There are thousands of businesses who are exploring how to exploit the blockchain, it’s definitely worth understanding the impact it might have on your business.

The Internet of Things is another technology that is gradually becoming more mainstream, as more companies employ its potential. George Osborne announced in 2015 that £40m would be set aside for R&D in this field.

The NHS have introduced a ‘telehealth’ system to monitor health remotely. This system has shown impressive results already, for example reducing mortality rates by 45%, reducing A&E attendances by 15% and reducing emergency admissions by 20%.

In the private sector Prudential Health are using wearable technology to allow personalised insurance rates. Subscribers to ‘Vitality’ are given a wrist based health tracking device. Vitality are then able to monitor how much exercise the individual does and adjust their insurance rates accordingly.

So how do you bring the latest digital thinking, processes, technology and talent into your organisation?

Many businesses have created a ‘lab’ environment, a space within their office for innovative new businesses. Those new businesses receive support, resources (in the form of office space and facilities), mentorship and ultimately the opportunity to test their product or service with the host. The host benefits from a diverse range of new ideas, as well as from the proximity to new project management methods and a highly skilled talent pool on their doorstep.

“It’s a two way experience. The startup learns a lot about retail from us. We know we’ll learn a lot from them, They’ll push us with new ideas, it will be a really stimulating environment and one from which all participants will take a lot away.”
Paul Coby, IT Director John Lewis

Of course, not all organisations are able to create this sort of environment but there are other opportunities like running hack days for developers from amongst your residents to come together and help you solve challenges. Or, why not try and make some of your data sets available to local developers and encourage apptivists to use that data to find solutions for their communities?

6. Digital Mindset

In addition to identifying the right skills and processes, organisations have had to adapt new ways of doing business to be able to continue to deliver on the consumer’s expectation of faster, better and cheaper services. This requires a shift in belief and attitude. It is something that seems both imprecise (because of its continuing evolving nature) and abstract. The digital ‘mindset’ refers to the adoption of a totally new way of thinking about how to work.

Belief 1: Everything to learn. Technology never stops, so learning never stops.
Belief 2: Be a humble expert. Recognise that however many years experience you have, there is going to be someone younger than you, with less experience than you who understands digital better than you. Be OK with this.
Belief 3: Data is truth, everything else is a guess. Learn to use data to inform decisions, create your own experiments. Measure everything.
Belief 4: Learning requires mistakes. Failing is OK.
Belief 5: Know your customer. Put yourself in their shoes. See the world through their lens. Champion their needs throughout your organisation. Design organisation around the consumer.
Belief 6: Embrace technology. Constantly scan the horizon for new technology. Identify how you could trial it to enhance your business.
Belief 7: Collaborate. Collaborate with the consumer, collaborate with other departments, collaborate with those outside your organisation.

7. Leading change in the digital age

But having the tools, skills and the mindset is not itself enough, the organisation must be structured effectively around a clear vision set by leaders who understand that digital transformation is not about the technology, it is about people. Successful transformation relies upon effective leadership. Digital transformation is a leadership challenge, not a technological one.

Set a vision

The leader of the organisations should be able to clearly champion the digital vision, a vision that the entire organisation can understand and believe in. The leader needs to identify the priorities that bring people together and focus them around the vision. And lastly the leader should be able to build the most conducive culture, developing capabilities and building confidence. The public sector particularly needs to build the confidence that it can achieve the same as the private sector despite the limitations and challenges.

Build a digital culture

Being an effective leader no longer requires gaining expertise and experience in one field. The most important skill for a modern leader is collaboration, being able to cultivate relationships and discovering new ideas, taking the best ideas from other industries and deploying them in your own business. A confident collaboration culture requires high levels of empathy, as well as curiosity and resilience.

Investing in technology is important, but investing in changing people’s behaviour through personal development, or hiring in those with broader skillsets creates effective and long-lasting change. As a rule, mindset first, tools second.

Case study: Interactive whiteboards in schools

From 2004 the UK government invested heavily in installing interactive whiteboards into every state school across the country (planned to invest £15bn by 2015). However, there was very little investment in to training teachers on ‘why to use’ the whiteboards, not just ‘how to use’ them. As a result thousands of teachers still refuse to use whiteboards in their lessons. As much investment needs to go into changing attitudes amongst staff as the actual equipment

“The secret of change is to focus all of your energy, not on fighting the old, but on building the new.”

Building a digital business requires a new set of behaviours as well as new skills. Digital businesses require not only strong leadership, but empathy, curiosity and particularly in the public sector, patience and resilience. It is essential to assess your current digital capability and then invest early in developing the skills and hiring the talent that you will require to drive digital change in your organisation.

All businesses should be digital businesses serving increasingly digitally empowered consumer-citizens. Digital transformation is an exciting challenge and an opportunity to harness technology to improve your organisation and your customers’ experience, good luck!

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