McKinsey recently published a report on the state of the digital enterprise. There are three thing to learn from it : it’s customer driven, CEOs bet a lot – maybe too much – on it and collaboration definitively doesn’t work.
The digital enterprise starts with customers
Let’s start with the first point. Without any surprise, most of efforts goes to customer engagement. I say without surprise because the customer side is th one when the link between digital and revenue is the easiest to get and does not require too many cerebral contortions to be understood. As we can see how difficult it is to change things inside the organization, relying on customer facing ones to drive internal change is pretty smart. Last explanation : follow the money and look where budgets are. The means that available to deal with customers have always been – and will always be – bigger than those dedicated to improve things on the employee’s side.
Targeted and even individualized marketing, customer service, the field of the use-cases is quite large. Let’s add big data, a strong trend with solid use cases in marketing and customer relationship individualization (but not only).
But don’t get carried away. McKinsey highlights the increasing number of initiatives and bigger means, nothing more. Instead of reading that “The digital engagement of customers accelerates”, we’d better understand that initiatives are accelerating. As a matter of fact, in terms of engagement, progress is everything but obvious.
Anyway. Focusing on customers without thinking about the internal impacts is not a very lucid approach and betting on the one to the detriment of the other will backfire one day.
As a matter of fact, and there’s still nothing surprising, customer facing initiatives are growing faster than employee facing one trying to address collaboration and collective intelligence issues. Less vague ROI – a least at first sight -, less complex, sensitive and political matters, as many reasons why internal initiatives are weighting less and less. Most of all, with time, businesses start to understand that despite of a real potential, digital works poorly or at the price of a change no one dares to lead and assume.
Last point worth noticing : What McKinsey sees as a growing engagement of leaders and CEOs is an argument I would use very cautiously. In 31% of cases, CEOs are the sponsors of the initiatives. Even more : CEOs are more convinced that anyone in the organizations that digital will drive more revenues in a close future. But behind this nice picture, another reality can be seen.
CEOs get dreamy when it comes to digital
– today CEOs must believe in digital – or at least act if they did – if they don’t want to look square. No matter they really understand what it’s really about.
– the strategies made unavoidable by the market and the economic context fit very well with digital initiatives that are very powerful levers to serve them. But in facts, despite of the goods intentions, both are often run in a disconnected way, apart from the other, with very little concertation.
– the focus is on external initiatives, customer focused, with a direct link to revenue and the very fact CEOs believe more than anyone that digital will drive much more revenue (we’re not talking about internal operational effectiveness or anything similar) is quite worrying. We have no understand they understand the matter and are pushing in the right way, rather the weird impression that digital is the last life buoy they can grab because, anyway, there’s no plan B. What does not have the same meaning…
By overestimating a matter one does not know and overlooking the efforts that are necessary for success, leaders may experience a tough landing. Staffs look more pragmatic : they believe in the potential but seem more aware of the difficulties that come with.
Digital alone won’t transform businesses
What leads us to the unavoidable conclusion McKinsey comes to : the real challenge is in organizational transformation. The major cause of success or failure that is mentioned is the involvement of senior management in changing work practices, what is coherent with the rest : adding things – and, if possible, outside – works, but changing things internally remains a major problem. Unfortunately, it won’t take a long time for them to see that external change always come with a need for internal alignment. The other causes that are mentioned are leadership and organization alignment with the digital initiatives. QED.
Nothing new under then, as always. A report that brings nothing new but may be useful to beg one’s hierarchy for budget.