Digital Transformation In Traditional B2B Sectors

by Alan Cooper Freestyle

Freestyle founder Alan Cooper takes a closer look at what slows down improvement across B2B teams.

“Don’t talk to me about incremental gains, I sell Power Stations… “

In recent months I’ve observed several instances of what feels to me like ‘corporate clog. At least that’s my name for it.

It affects marketing teams in large businesses across a number of sectors, but especially in traditional manufacturing and industrial companies who are caught at a crossroads and struggling to make headway.

Digital Transformation: Enormous And “In Vogue”

They’re faced with the evidently enormous and in vogue task of digital transformation.

For some businesses it’s enough to send a shudder through the whole organisation; not least because it means different things to different people, and sometimes different things to the same people. And everybody’s doing it, right?­ – it’s not exactly optional.

For some, it means a wholesale bottom up approach to systems, processes, manufacturing, distribution, supply chain, people, and products, to drive efficiencies through the organisation. To others it means harnessing digital technology in customer facing communications and transactions to improve the experience across the board.

For yet more it means both of these, and draws in senior involvement across the entire business. The board signs off a multi million pound programme, and the business gets ready for the most exciting and scary thing they’ve ever done. It’s a massive investment, potentially the biggest the business has ever tackled.

The Roots Of The “Corporate Clog”

Sadly things can go wrong, from the very start, in spite of all the valid reasons, commercial desire, and longer term results benefit moving the business forward.

The Corporate Clog is waiting in the wings to mess up your shiny new initiative. The typical first phase of this will be commissioning a big 4/5/6 or other consultancy to run the transformation strategy.

At that point everything else grinds to a halt. Corporate clog has bitten hard into the business, and very quickly the sentiment of ‘we’ve got to wait while we do this programme’ appears and grows.

That’s entirely understandable; why would you spend any time on existing processes, people, technology which will probably change as a result?  I’d argue that would be okay if the digital transformation of a complex business took a month or two. But the reality from our viewpoint is a year spent in the consultancy phase, six months for corporate review, and a further two years of implementation, starting with the big stuff (total change in business processes). It’s a long time before the business gets the green light to get back to business as usual (BAU).

All too frequently, we see gearing digital transformation as a top down programme. This is often driven by the consultancies brought in as external specialists to guide the whole thing (as explained here). What this approach fails to recognise, however, is the need for the organisation to be agile before the start of the transformation, not as a result of it.

Even with an agile approach to transformation, it’s still a long process and one which addresses the future as a priority, not the present. The agility being exercised in the digital transformation programme isn’t reflected in the rest of the organisation.

Whilst respecting the consultancies leading this charge, it’s small wonder corporate clog can appear. In the face of highly complex models and confusing language, it’s often hard to know which way to run and very easy for inertia – clog – to take hold of the BAU teams.

As the entire business gets consumed by the ‘next big thing’, it descends into chaos like a team of nine year-olds chasing a football. Only the goalie is left behind (and sometimes not even him or her!).

And that’s the point; we encounter highly skilled teams in marketing and communications who are left sitting on their hands; sending out the same brochures, reworking the same press releases, tweaking the website content, and retweeting the same social media schedule for a couple of years.

So What’s My Point?

The principle of agile, incremental gains is everywhere you look. I’m sure if Sir Dave Brailsford had known how much it would take off in industry, he’d be an even richer man right now, no matter what’s in the Wiggins package J. However, too often this principle is abandoned in abeyance of the Big Thing which will ‘soon be ready’.

You need to establish a culture of agility right from the start and continue with any projects which will deliver benefit to the business. Additionally you need to recognise that there will be some redundancy and reversal as the digital transformation programme is rolled out, but do carry on with BAU and spend on measurable activity which will deliver an ongoing ROI. Even a web replatform, seen as a significant project, would likely deliver returns within the duration of the digital transformation programme and improve the customer experience right from launch.

Adopt a more tactical approach – deliver projects in an agile, MVP (minimum viable product) manner. Prioritise activity which delivers a short term measurable benefit. Maintain the momentum in the business. Use a couple of percentage points of the digital transformation budget and deliver more back to the business while it’s under way.

Because it’s not just about keeping the teams busy while you wait, it’s about keeping the energy and momentum up in the business. More crucially it’s about continuously improving the customer experience. Doing this will make the transition to the eventual transformed world so much easier than trying to move from a standing start.

Don’t Lose Sight Of The Bigger Picture

So you’ve managed to keep the fires burning while the new house is being built. The next pitfall to be aware of is ensuring the two are connected, and lessons are shared. Don’t work tactically wearing blinkers, avoiding what’s going on in the bigger digital transformation.

You should create a feedback loop from what you’re doing to the bigger programme, and take interim findings from the digital transformation into your activity. If you’re working in an agile way, this should be almost second nature; fail fast and learn quickly, remodel and rework.

If you’re sufficiently nimble in reacting to the overall programme you’ll be that much more effective, and costs won’t spiral. this will prevent you from having to retrench from a position at the end, too far from the digital transformation programme.

Improving customer experience isn’t a big bang waterfall approach – little by little, persona by persona, iterative steps. It’s a gradual process and undeniably one of the most significant business performance improvements you should invest in right now. No matter what is around the corner when the larger programme is brought to bear.

Try and keep the light touch, work out what you want to achieve. Whether marginal or incremental gain, keep adjusting the scope up or down until it hits a measurable timely return.

It’s analogous to dropping pebbles in a lake to make ripples, rather than letting it go flat until you heave in a massive rock and disturb everything. It gets the lake ready for disruption. And while I’m in analogy mode, there’s a reason why you add eggs slowly to cakes. Don’t end up with a flat business with no flavour and a heavy texture!

Are B2Bs The Ones Affected The Most?

The businesses we see struggle the most with this is the traditional B2B sector – manufacturing, industrial, engineering, and power.

Why? In these industries there’s a strong perceived threat of ‘digitise or die’. They are often behind the curve of leading B2C brands and transactional B2B (Tech, Finance). They also have significant, maybe larger, shifts to make in their everyday processes and technology. Digital transformation in the power station business anyone? Can you see an industrial steel press manufacturer adopting cognitive manufacturing at the drop of a hat?

So when the effort is finally committed to making this seismic change, it’s treated as ‘all or nothing’. This sector is often under-resourced in marketing and communications. Meaning the leading digital talent is snatched into the digital transformation programme as there aren’t as many digital natives in the sector, and the rest of the business is left to make do.

So the remaining team struggles, and gets budgeting cut or frozen. This is where the corporate clog hits hardest. The traditional B2B world isn’t always the first place the digital natives head. As a result a lot of senior management aren’t as cutting edge as the agencies trying to advise them. Fear of doing the wrong thing takes over and the impetus is lost.

International Digital Agency To The rescue!

It’s not all doom and gloom; there are plenty of examples where paying attention to the incremental gains and carrying out large scale digital transformation can go hand in hand. Good examples of ‘whistle while you work’!

For example our web redesign for Bostik was counter to (and harder to achieve) than the natural move to the new parent company Arkema’s existing infrastructure. In doing so, however, it triggered a digital transformation within Bostik. The subsidiary is now leading the way digitally in the larger parent business.

Saxoprint chose to iterate with smart digital thinking to change their business model on an MVP basis. We’re now entering year two with ProStudio and the results are growing fast!

RS Components underwent significant internal restructure as part of a transformation programme. They used customer mapping to look at individual journeys and fix them one at a time. One eye on the tactical work, one eye on the bigger programme. It works.

The public sector is also struggling with this, as they strive to get to grips with the Government digital services principles, whilst working in cumbersome siloed departmental structures.

If It Was My Money

My advice to the digital transformation team – usually senior management – would be to loosen the grip of the all-encompassing digital transformation programme. You need to let the marketers keep the ripples spreading, add more pebbles to the pile, keep improving the business and the customers’ experience.

Your customers will reward you and they’ll be that much more ready to adopt the new company-wide approach when it emerges. It’ll seem like just another small step for them; another reinforcing link added to the trusted bond between business and customer.

Some Background Reading

There are several examples of this in the following articles. They make an interesting and useful read, although they’re typically geared at the marketing and comms side of digital transformation.

This is a good contrast to the whole enterprise remodelling focus of this piece. They also identify BAU as a stage to go through rather than something to foster and maintain. But hey, they’ve probably done more research than me.

Digital Transformation In One Sentence…

The key to unclogging the traditional B2B sector is about empowering BAU and continuing incremental gains during the entirety of the digital transformation programme. Yes, even in the power station business.