Customers want "Simple", not "Digital"

In the last few weeks I have been speaking to a number of Executives across different countries and different sectors and it looks like we are definitely in the “Digital” Buzz phase that we have been used to seeing when the might of the IT industry Marketing teams finally hits everyone. I am now old enough to recognize the pattern so if nothing is done differently we will end up with same results… So let me say this again and then explain: Customers don’t want Digital, Customers want Simple! 

Lets go back in time: Customers did not want the Internet, they wanted the simplicity in sharing and communicating that the internet could offer. If we look at our children we could argue that people do not want phones, they want the simplicity of being able to communicate any time, any place and with as many people as possible simultaneously. I could name a few more examples but the conclusion will always be the same, ie getting rid of compromises or simplicity. Marketers say that customers also want Speedy Service, Options, to be Understood, Confidentiality, Value For Money, Consistency and Reliability but I would argue that all these attributes are outcomes from creating Simplicity.

So the next question is where to find Simplicity or how to create it, right? If we assume that most disrupted come from new entrants then if you are looking for Simplicity you should not expect to get it from the usual suspects, ie well-established digital providers that seem to be pushing digitalisation more than anything else. But before you go about your Digital Transformation reflect on what strategy you are going to adopt: Today there appears to be 3 types of digitalisation Strategies:

Type 1: Digitise your current Business from A to Z

Type 2: Digitise parts of your Business where it matters most for your Clients

Type 3: Redesign your Business both for your Customer and Your Success as a company

I hope you will notice that in one case I did not make reference to anything digital so I guess you know where I am going with this. Lets explore each type and reflect on what you are actually doing:

Type 1: Digitise your current Business from A to Z

This is becoming more and more prominent as more Organisations offer Digitalisation “expertise”. This strategy offers cost advantages to the company but very rarely offers real improvements to the Customer: Current processes are built around humans and contain waste. While Customers live with waste in human processes they hate it when they experience it in so-called digital processes where the company tries to win new customers from having become digital. More often than not this type of Digitalisation creates even more distance between the Customer and the company.

It is a fact of life that companies go out of business every day. It is also a fact that many companies will go for this approach as so many companies are still internally focussed and driven by margin management. These are the companies that don’t survive an industrial revolution as they failed to adapt and failed to understand that digital technology was a means to create even further simplicity for their client. The bigger the company the slower the death: there is nothing worse than digital waste that is buried in code, apps and interconnections that are too expensive to fix and that require outside help to do so.

Type 2: Digitise parts of your Business

These are the companies that recognise that Type 1 is just accelerating bankruptcy and, more importantly, see how they could offer some simplification to customer facing processes while generating some cost efficiency. Typical Customer reactions are mixed and best summarised like “I really liked XX but disappointed they could not do YY”. Companies in this category see the appeal of technologies such as the Cloud, IoT, Apps… They probably manage to keep existing customers loyal and grow a little. Why they don’t deliver Breakthrough performance is quite simple: they see Digital as an IT upgrade rather than a Business Improvement. As such they are focussed on doing things more efficiently than doing things more simply or doing new things for their Customers.

These are the companies that will constantly battle for Market Share and Profit as they make it easy for Customers to go try something else from time to time. While Loyalty is higher than for companies going for Strategy type 1 there is room for other companies adopting Type 2 Strategies to take their customers away.

Type 3: Redesign your Business 

Redesign? Sounds difficult, painful, exhausting some will say. But is it really? Words like brave, ambitious, customer centric are probably what you can associate to companies choosing this category from the start. So what does Redesign really mean? Well, if you have already done this a few times before then you are probably equipped with the capability to do this again so what’s the big fuss. If not then it’s probably time to do 4 things:

1.    Look around you at what other companies in other sectors are doing

2.    Engage with non-customers

3.    Get feedback from lost customers

4.    Speak to existing customers 

What is important is to do this in the above order because too many companies start by speaking to existing customers and go no further. By following this sequence you will constantly be wanting to find out more. In fact, you may even find that existing customers have little to teach you since they accept what you, ie the good and the bad… By following this order you will find many sources of complexity which will probably make you think that the best way to resolve all of them is to redesign your business rather than go for Type 2 Strategy.

Most new business models are merely the adaptation of an existing model in one sector into another thanks to the use of Digital Technology. People often ask me what innovation is and my response is “Innovation is the commercialisation of creativity”. Please note that I did not use the word “Invention” and here lies the problem. Businesses exist to innovate, Human exist to invent. 

Those who are familiar with TRIZZ you will know they are only 41 generic ways to fix a problem so imagine the power of Redesign if you were to couple TRIZZ, Lean Innovation and Design Thinking! Design Thinking will make you think about User’s Hills (the problems they face), Lean Innovation will get to assess Value for your Customer and how much waste you have in your way (process) of delivering Value to the Customer. Once you recognise Problems, Process and Value TRIZZ can then provide you with the ways others have solved the underlying generic problem you are trying to solve. All that you need to do is find the specific adaption of the generic solutions provided. Did that sound so complicated?

Companies that go for Type 1 do not care about making things more simple. 2 perfect examples happened to me in the last 30 days when my internet access stopped (Example 1) and when I tried to change Internet provider (Example 2). You could not make this stuff up… Feel free to smile and image my pain at the time, here is goes

Example 1: Trying to re-establish Internet Access 

If you look at this example I hope you can see that Provider went for Type 1 digitalisation approach, ie digitalisation of a bad process that when digitalised increases customer dissatisfaction as all human interactions were non-value adding and, in some cases, the source of even further customer dissatisfaction. Interestingly, every step of the process did what it was supposed to do. I cannot say that the process was broken or that the Customer Service person was not competent. This was the process and there are probably some KPIs that make the Provider feel he is doing a better job and that his process works…

If you look at what could have happened then this is typical of a Type 2 approach, ie a mix of digital and human interaction to simplify each step of the process and hopefully shorten it. No proactivity and no attempt to avoid the problem from happening. And who said that TPM (Total Productive Maintenance) only applies in Manufacturing?

A type 3 approach would have been to simply send me new equipment when the micro interruptions were detected because that is the pattern of a piece of equipment that is bound to fail within a few days. 

Example 2: Change of Internet Provider

Once again we see a Type 1 approach which is probably fine if all goes well 1sttime round but terribly wasteful, costly and disappointing if not: 

• A process to take an order that could have been automatic
• Interaction with Sales Team twice
• Technician visits
• Sending equipment twice 
• Return of equipment

Type 3 approach requires some thinking about the “How” but not the “What”: It has to be simple, fast and correct 1sttime round… While I don’t have the answer I know that using “Design 4 Value” methodology will get me the right answer, ie combining IBM Design Thinking and Simpler Lean Innovation methods.

As a conclusion I will leave you with these following observations: 

• Companies often talk about having to improve staff competency to increase capability… Just because you have competent staff does not mean you have a competent Organisation: Capability is about a Company being able to provide you with a good product/Service. Competency is about people being able to operate in your Process. A bad process with poorly competent staff is a disaster but competent people operating an incapable process is probably even worse given the effort spent training people to do bad things! 
• It is just as Simple to redesign a product/service as it is a company. It’s a scale and time issue, ie the process is the same. In this particular case we might talk about a Digital review to start with. As we get into the details of Value Streams and processes we will eventually get to the same Design For value methodology coupled with tools such as TRIZZ, if needed.
• Just remember, Customer want Simple not Digital!