“Digitisation is usually revenue driven, which means either making the process more efficient, or getting rid of people,” he claimed. “But that’s not looking at the whole company or at growth. I call it a ‘myopic spreadsheet’ mission. One number doesn’t move a business, especially in the long term or if you’re looking at periods of change.
“The objective needs to be about redesigning business. And that’s best done on purpose and by design, rather than by being reactive or trying to get shareholders more of what they had in the past. This is the number one strategy snafu that is killing more value than it’s creating.
“It’s not true for every company, but most investors have been in companies for a long time, and they want more of what they had in the past. In other words, keep things the same, give me more of my return. So you end up taking more resource out of the business, and cost cutting.”
Exactly the opposite recipe is needed to truly harness digital and become a customer-led organisation, Wittenstein said.
“The ones leading in this space recognise the need for making a company more adaptive,” he said. “We are in a period of intense change; you have to be constantly innovating, trying new things, restructuring. That costs money.
“Marketing, HR, CX, many are all driven by this emphasis on financial returns. So they’re putting in tool, systems and approaches that yield short-term benefits that can be measured. But not all the benefits you need for sustainable growth can be measured. It’s not balanced.
“This is the big fear I have from all the exciting things that are going on.”
The other danger Wittenstein spotted was marketers and customer experience leaders being given the responsibility to bring their company along more customer-led lines. Often, they don’t have adequate resources, guidance or frameworks in place to achieve those digital transformation goals.
“I was talking to someone in a CX role recently and within 2 minutes, we were talking about the numbers you need to prove what you’re doing is working,” Wittenstein said. “There was no context given by the CEO or company on all this work.
“I see a lot of scraps left on the table. The necessary context for achieving breakthrough growth that will give you a strategic advantage is missing because people aren’t asking the questions or going deep enough. The bottom line is they’re doing before design.”
Change by design
So what can you do to become digital and customer-led by design? Wittenstein said more talking and cross-functional collaboration is a good first step. He also advocated adopting the same approaches being used to build more adaptive technology to systematically overhaul the way the organisation works.
“Make your business more adaptive, don’t just throw people together and hope great things will happen,” he said. “Agile is all the craze, but I worry that’s led us to a biased belief that if you keep trying, you’ll get it right eventually. I don’t see this as a business solution.
“Look at history: The best things introduced were introduced on purpose by strategies and people who understand more than one discipline at a time. It’s not coming out of incremental gains or luck. You have to put in additional thinking to achieve these sorts of outcomes.”
Marketers are in a good position in orchestrating this sort of systematic change because they’re good at understanding buyer’s needs, implicit and explicit, Wittenstein continued, adding that CMOs should be responsible for injecting the voice of customer and buyer in technology development.
“If marketers really do bring in the voice of customer and they are present at these reviews with customers in the room, not just engineers, then you can get closer to what customers truly want,” he said.
In addition, there should be an overall deepening of customer understanding and what customer need, independent to what is being built by the company, Wittenstein said.
“The other player that has to be in there is leadership,” he said. “A lot of the things you see in sprints are stupid workarounds rather than pivoting the strategy, which is what is needed. Or look at budgeting – how many companies do agile and still keep traditional budgeting? It blows me away. Why don’t they do zero-based budgeting?”
Wittenstein also suggested people are still going with what’s easy and pushing a lot of responsibility for making trust decisions to the frontline.
“If you’re trying to make seismic shifts in the business, that’s not very smart. You can’t let those experiments run the business,” he said. “From a strategy, operations and finance perspective – there needs to be a push to understand what is it we do that creates value for customers? That has nothing to do with the price of product, but what products and services they use to create value for themselves. How much value they create with each unit they buy from us.
“Without that piece of information, now way to optimise we do versus what they need.”
And when you find a CX problem, use the same research techniques on the inside to find out what’s wrong, Wittenstein advised.
“The quickest way to use agile to get more done and get it done well while having a positive cultural affect, is to do dashboard design in the same fashion. For every four sprints for technology, do one for dashboards to make them better,” he said.
“That’s going to change the information people get to make better decisions together, downstream and upstream. And people will have a better feel for how decisions are going forward.”
As a final note, Wittenstein stressed the importance of agreeing to deliverables around what’s valuable.
“The more and more we all use devices, the better the context and better decisions companies can make,” he added.
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This post first appeared in CMO Australia in late 2017. Thanks to Nadia Cameron for a great interview!