Increasingly in my daily work life, I have found that the best approach for companies that want to succeed and thrive is that technology is not a silver bullet. It is a great enabler, it empowers organizations in unprecedented ways, but it does not transform your company on its own.
The changing nature of business
What we find at Orange is that the model has been evolving from technology engagement to business engagement. Digital should not be a checklist of things that your company thinks you should do, it now has to be about how you think, how you behave, what you value and what drives decisions within your company.
There is no room for complacency, for thinking that digital tools will revolutionize your company and make you more successful simply by you having them. Incumbents cannot afford to be comfortable with established positions. A great example was the comfort felt by Kodak, a technology company that dominated the photographic film market in the 20th century, but then crucially ignored the rise of digital photography and camera phones. Kodak refused to see it as a disruptive technology, fell behind, and ultimately filed for bankruptcy in 2012.
This type of occurrence is all too common and stems from a refusal on the part of established companies to think progressively. To thrive, and keep thriving, your company needs to ask itself some key questions: what do our customers want? Greater convenience, better customer service or more choice? Or all of the above? And to address these challenges, the answer is always innovation, the practice of turning a basic idea into a good or service that creates and delivers value. For businesses, innovation comes when ideas and lateral thinking are applied with a view to satisfying the needs and expectations of customers. Put more basically, business innovation is about doing more, doing better, doing right and doing new, on a continuous basis.
Think business first, technology later
This is key to how companies can stay ahead of the game in the digital era: think business first. Innovate around business first, and only then think about technology and how technology can help you achieve those business goals. Companies that hear about new digital tools like artificial intelligence (AI) and ask themselves, “What can we do with that?” have the question the wrong way around – they should be coming from a perspective of, “My customers want better customer service, are AI-enabled chatbots something that can deliver that?”
Based on day-to-day customer engagements, my team has learned that the key things to do are: align your priorities to your business strategy and business needs and further to that, foster a culture of innovation within your company and encourage your teams to collaborate with experts, partners and even customers.
The importance of co-innovation
Co-innovation is all about cooperation and collaboration to drive innovation, and today it has become a crucial value creation tool for companies. According to Frank Gens, IDC Chief Analyst, “The ability to accelerate the volume and pace of digital innovation will be the most critical new benchmark for organizations competing in the digital economy. Ignoring co-innovation is no longer an option.”
One Orange customer in the manufacturing industry was able to drive new efficiencies in factories through co-innovation. We worked with the company to assess the existing situation via a digital snapshot, to brainstorm and come up with ideas via creative workshops, prioritize the tools based on ease of implementation versus potential gains and align them to business needs and priorities. The innovations were then taken to execution, and new ideas like automated forklifts and digital boards delivered benefits to the manufacturing operation.
Working and thinking outside of vertical industries
No matter what vertical industry your company is in, you mostly have similar ideas about how to improve your business, and so you sometimes need a change of perspective. Innovation can mean you need to look outside your traditional ways of thinking, such as the Indian shipping company Allcargo Logistics that is drawing inspiration from Uber to offer shared marine containers.
You might even need to think about collaborating with a competitor to drive innovative ideas, such as Ford working with GM to develop a new type of gearbox, or Embraer and rival Boeing working in partnership to develop aviation biofuel that could help every aerospace company lock down their CO2 emissions.
A large Orange customer operating in the FMCG sector embraced this thinking by asking to meet with a financial company to talk about blockchain, to meet with other companies in the manufacturing sector to discuss automation and IoT. Innovative ideas can be found where you sometimes least expect them.
The importance of the CMO
Another key aspect of a successful company today is just who leads digital transformation research and initiatives. A while ago, it was delegated to the IT and the CIO department, but that no longer works. Innovation is driven out of business and products, while IT brings the digitization knowhow to the table. Therefore, it is essential that you successfully align your IT department with the business and get them to work closely together on all levels.
The chief marketing officer (CMO) is the person who should be driving change. The CMO’s remit encompasses everything from sales tools to product development, but ultimately the CMO has a very wide, powerful role because marketing is driven by the power of the customer. The CMO is a highly strategic role, and the CMO should lead projects like how to transform your customer service – the CIO is more likely to be the person who knows what technology will enable that transformation.
According to Forrester, 62 percent of companies that have a digital transformation led by the CMO are experiencing double-digit growth, versus 50 percent whose digital transformation is run by their CIO.
What does a successful company look like?
A successful company today is one that employs constant innovation, which is the starting point for all thinking. Everything else is subsequent but encompasses your challenges, conversations with your CMO, engaging with other business units like HR to help with rollout of initiatives through the company; basically, the technology comes much later.
Constant innovation means asking yourself, “What are my competitors doing?” or “How can I improve my USP?” or “Are we selling our products right and how can we improve it?” on a regular basis. Then when you have identified your strategic areas, you look at the technology that can enable what you need.
Digital transformation does not mean only “IT,” it means new ways of working, new business models, new ways of thinking, rapid execution, listening to customers and pre-empting their expectations through constant innovation. Eighty-four percent of companies say that they experienced revenue increases as a result of spending on IT innovation, at an average 14 percent increase in annual revenues. Innovation delivers results, and digital enables it.
In my next blog I will talk about the next step in being a successful company in the digital era and how vital ecosystems are to that journey.
Philipp leads the European Digital Business Consulting and Innovation division at Orange Business. His team advises and supports customers in their digital transformation through business innovation and value creation. Philipp has 18 years’ international management experience in consulting, sales, business development and product management roles. He holds an MBA in International Business and Innovations Management and two Bachelor Degrees in Economics and Engineering.