Business is changing, digital is accelerating, but is this a temporary shift or will things never be the same again? In this coffee chat episode we sit down with Nicole France, VP Principal Analyst at Constellation research to explore this topic and talk about what business leaders can do to better position their organizations for success.
[00:20]: Has business changed forever?
[02:33]: What does being digital first mean?
[06:07]: How well are business leaders doing with their integration strategies on their journey to omnichannel commerce?
[09:17]: What are the roadblocks to being digital first?
[11:50]: How should leaders be thinking about adjusting their management styles and processes to enable their teams during this pandemic?
[15:36]: What are your top 3 predictions for 2021?
Loretta Faluade: Welcome to Coffee Chats With the Pros. My name is Loretta Faluade and I'm a solution strategy director here at PROS. And I'm so excited because with me today, I've got Nicole France, who's the VP and principal analyst at Constellation Research, welcome Nicole....
Nicole France: Thanks Loretta, it's great to be here.
Loretta Faluade: So today we want to just have a conversation around business. And the question we want to answer today is, has business changed forever? So Nicole, I'm going to kick it over to you, what has been your perceptions of the things that are going on, the different habits that we are getting, or that we're now being trained to, and what is your thoughts on, has the business world really and truly changed forever?
Nicole France: It's a great question. I think the simple answer is yes, and that's partly because business is always changing. It's just that it's often changing in really subtle ways that we really don't pay very much attention to. That's clearly not the case right now. We have some very big, very large scale changes that have been extremely abrupt and far more wide reaching than I think anybody would have anticipated. So it's, I think, pretty fair to say that we are seeing some significant changes now on a scale that I don't think we've really seen in the same way before. Certainly not in such a short space of time.
Nicole France: How are they changing? Well, obviously one of the great big things is that all things digital have really come to the fore. And that's not just because it's easier, it's because in a lot of cases, that is the only channel or set of channels that we have in order to communicate. Whether we're talking about communicating as colleagues, or whether we're engaging our customers, or anything else for that matter, I mean the same applies to the public sector as well. So these channels, these forms of communication, these means of communicating, really have become, not just nice to have, not just an added benefit to the business, but they have effectively become essential, pretty much overnight.
Loretta Faluade: Yeah. And it's interesting because you talked about the different facets of business that have changed and the move, or the fact that digital has now come to the forefront, a lot of people hear that term, being a digital first company, a lot of vendors are saying it right now, and there are a lot of businesses who are even investigating digital technologies, whether investor or bring it into their organizations. When you think about a digital first company or companies that are now being forced to go to digital, what are your thoughts around that? When you hear that term or how you define that term?
Nicole France: There are a lot of different definitions. And I think they're, in my mind at least, two really critical aspects of being digital first. One is internal, so what are your operations like? What are the systems and the infrastructure that you use in order to run your business? And that's fundamentally about having digital versions of your key information for example, I think one of the things that we found in the course of this pandemic is how much stuff still happens on paper, and in a lot of organizations, it's actually pretty shocking. Either stuff that happens on paper or that happens through informal communications where it didn't really matter because people were in the same office or on the same floor or in close proximity. So one aspect definitely is having those digital capabilities, it's a longer conversation about how digital, how advanced they might be, because I think there's a lot that starts getting into the types of technology architectures that you use, but also the ability to apply things like machine learning, and in some cases, artificial intelligence as well. So that's the internal operational side.
Nicole France: The other side of the coin, which is closely related to how you as a business conceive of the way that you interact with and engage your customers. And again, I think there are a lot of businesses that had multiple different routes, which obviously is great, I mean, that's what you want. We talk about omni-channel, it's not really about how many channels you have, it's about all the different ways where your customers are and really meet them and engage with them effectively. So yes, in a lot of cases that has been face to face in various forms, whether a business to business or a business to consumer type of operation. But when we talk about being digital first with regard to customer engagement and customer relationships, what we're really talking about is using those channels to communicate effectively, to get the attention of your would be customers, to form those kinds of attachments that ultimately lead to doing business and to building longterm customer relationships, and it's really, I think, a particularly significant shift in mindset when we talk about being digital first in customer engagement.
Nicole France: Because that really is a question of using all of the innate capabilities and characteristics of digital channels, including social media, for example, to their best effect. And what we might try to do is reinterpret what we used to do in a face to face business environment, that's critical, I mean, we're social beings as humans. We do that very naturally and very innately because that's what we're programmed biologically to do. When we talk about being digital first, we have to really reinterpret what those kinds of connections look like through digital channels, because ultimately this isn't about data, this isn't about behavior patterns, this is still about connecting people, that's what results in really successful customer relationships and ultimately successful businesses. And that means we have to use these channels to form personal connections. And I think sometimes that gets lost because there's a lot of focus on the technology tools, there's a tremendous amount of conversation about data, and the role of data, and the volumes of data, but it's easy to lose the actual customers in that discussion.
Loretta Faluade: Yeah. I mean, it's so interesting because you talked about a lot there and I'm going to pick your brain on a lot of things that you said, but part of what you mentioned is that it's less about the technology and part of what I'm thinking is that when you think about technology, technology enables you to do something, but sometimes you focus on the technology, it's like, no, what is the technology enabling you to be able to accomplish as an organization? And how you mention even the interaction with social, the digital channels, you've got your e-commerce channels and people are still trying to marry and accelerate their sales channels, one of the key things that I think is now starting to show is the fact that things have got to be more integrated than ever. What is your perception around how well organizations are doing with regards to integration strategies and where do they need to think about going even in the future?
Nicole France: You're absolutely right. I think integration is a critical foundation element here of how this stuff works. And part of the reason for that is because we need to address the issue of speed. When you're doing stuff digitally, you don't have time to wait for someone in the back office to make a decision about whether we could actually negotiate that price on the car, for example. You have to be able to operate at a faster pace. And the only way to do that is with technologies that have a relatively close, if not tight integration, across different parts of your technology operations, the business processing that underpins what you're trying to accomplish.
Nicole France: Data integration is another really important part of this as well, and that is a big, messy, thorny challenge for a whole lot of businesses. And it's one that I think is going to take us a lot of time to really get right. And part of the reason is that you have to balance addressing that data challenge from a very high level enterprise wide perspective, from a strategic standpoint, but you also have to be practical and pragmatic about making sure that you have processes that work and that work effectively.
Nicole France: So I think there's a balance between having a broad ranging and wide scale strategy, and also having an implementation approach that recognizes that you can do things iteratively and that starting with the minimum viable requirements is actually going to give you something that works, that you can build from. So the data part is certainly absolutely critical. Part of the reason too, is in this quest for speed, automation becomes really important. And you're not automating customer relationships, you're not applying AI to magically generate great customer experiences, that doesn't happen, but you're using these tools to help your employees, and to help your customers, get access to the things that they need at the timely moment. And that's what helps to improve the kinds of interactions that ultimately lead to really good customer relationships.
Loretta Faluade: It's so interesting that you mentioned the role of AI and what AI can eventually bring, and how you're able to help your customer and really deliver great customer experiences. One of the things that I was going to ask you is that when you think about some of the roadblocks that maybe some leaders have to being digital first, what do you think sometimes stands in their way?
Nicole France: I think there's a whole lot of organizational inertia, and I think there's also a lot of inbuilt structural resistance to making the kinds of changes that actually better allow an organization to take advantage of digital capabilities and ultimately to implement them effectively. So what do I mean by that? Well, we've got established power dynamics within any company, who are the leaders of different parts of the organization? How are the budgets allocated? What is the level of staffing within those departments? All of these things are some very classical indicators of influence and power within an organization. And when we talk about really becoming digital first and undergoing digital transformation, this requires a fundamental rethink, not just of the systems and what you need and how you use them, but also how you structur your organization, how you define the roles.
Nicole France: We talk a lot as an industry in technology about the future of work. We talk about it very, very generically, but what we're ultimately talking about is what are the jobs that the people in your organization are doing and to what purpose? And I think there's a whole set of really, in some cases, very fundamental changes that need to be made in some organizations in order for them to operate in a different way, to operate in this digital era, if you will. And that is a very big threat to those established power dynamics within companies. So I think it takes some visionary leadership certainly, it takes a lot of willingness on the part of all of the leaders and executives within a business to actually be part of that change and be part of that rethink.
Nicole France: And again, we're human, we're all, to some degree, resistant to change. So a lot of this is really about having vision and being able to sell the whole organization on that vision and everybody's individual role within it, as well as making those technology investments. So it's certainly not just a technology problem.
Loretta Faluade: Yeah, I absolutely agree. And one of the things that we definitely look at is that a lot of organizations adopt your technology, they implement your technology, but many times a lot of leaders have got to figure out what is the change management process so that the technology is actually doing what you intended it to do. So this main shape shifting some of the KPIs that you typically track to make sure that they're delivering the benefits and the capabilities that you want it to do for your organization.
Nicole France: This is actually a really, really important point. And it's interesting because in a lot of the conversations I've had recently with leaders within enterprise companies that are making some of these changes, and that have been navigating the really rapid business environment changes as a result of pandemic and all the other things going on in our environment today. It's been very interesting because I think one thing is, I've very definitely gotten a clear feedback that the companies that were already significantly down this digital transformation path, have definitely been in a better position to handle this need to change really rapidly. So I was talking to one sales leader, for example, who was saying that if he and his team hadn't invested in this transformation already, he's not sure they actually would have been able to manage the whole pandemic crisis situation at all. And they've actually been able to manage it really well.
Nicole France: Now what's interesting to me is he's talking about exactly the same need to change thinking about how you manage people, what you're managing them toward, what those objectives are, I mean, ultimately running a sales team, here's what you want to do, you want to keep selling, you want to keep bringing in the revenue, but the way that you do that, the way that your salespeople engage with customers, the way that you manage your salespeople is changing, and it's really interesting. I think all of us who have very abruptly found ourselves working from home for the first time, full time, will acknowledge that what you used to do in the office doesn't really work anymore. We have to work differently, we have to communicate differently, management styles change. And so it was really heartening to hear the sales leader say, yeah, he really quickly realized that he needed to manage the salespeople better, in a different way.
Nicole France: So there is much less focus on the operational stuff, like the updating and this kind of thing, and much more focus on ensuring that that people had what they needed, that they were clear on what tools they had and how to use them, that they were still focused on the key things that were really the customer's issues and priorities, and that they were equipped to do that effectively. So it was a very subtle but significant shift in the management behavior there. What's interesting to me is he's already thinking about how this is going to change the way he thinks about, and ultimately manages his sales organization, even once we're out of the pandemic, because it's really opened his eyes to the fact that there are different ways of working and they can actually be, at least as if not even more effective than, the things that were traditionally used to, the things that have been sort of ingrained for years and years.
Loretta Faluade: Yeah. And I think what a lot of organizations are definitely figuring out right now is the fact that a lot of people are very, very effective in working from home. And sometimes it can be a little bit too effective because it's like, you never know where to actually draw the line between, "Okay, I'm done working now, let me go with my life." Because you're working in your home.
Nicole France: You literally have no boundaries. That's why I have a screen behind me, at the end of the day and the screen comes down.
Loretta Faluade: Exactly. Exactly. So to wrap it up, one of the things I want to ask you as we've talked about the state of business, really the organizations that are putting digital first, are further down the line. What are your top three predictions, let's say for 2021, once they finally let us all out of our homes and are telling us that we can go live life. How is business going to look? And what would be your advice for leaders to get ready for that time?
Nicole France: A few things here, one is I do think we're going to see a different mix of how and from where people work. And it's not just working for home, it's the idea of working remotely. I certainly don't buy these predictions that 90% of people will never go back to the office, I just don't think that's true. I think there are an awful lot of people who for various reasons are desperate to get back into an office routine, the office social environment, that kind of workspace. And I think that makes a lot of sense. It doesn't make sense for everybody, and I think we will see a different balance between working in an office or onsite and working remotely from elsewhere. So that's one. And I think what we will have when we get out of this pandemic situation is a lot more large scale experience with how to manage effectively in that context, so I think that's a big plus.
Nicole France: I think the flip side of that coin is what's going to happen when it comes to our customers and how we interact with our customers. I also think that predictions of the death of in store sales have been greatly exaggerated. So again, we're going to see, I think a shift, we've already seen a significant increase in the proportion of sales that are online versus in store for obvious reasons. I don't think we're going to see that backslide a lot. But I think what we're going to see is an acceleration of this, again, a reimagination, a reconsideration of what the in store experience is like, and what the relationship is between what you do in a store and what you might do through digital channels or online, and the fact that those things might well overlap. So I do think there's going to be a lot of creative thinking that is already, and frankly already had started well before the pandemic, but is being accelerated by the fact that, as we discussed earlier, suddenly digital channels are absolutely essential lifelines for any business, whether you had them well in place beforehand or not.
Nicole France: And I also think the third aspect that I certainly anticipate is, I suspect we're going to see a lot more focus on exactly this issue of what the company organization of the future starts to look like. And certainly there are going to be a lot of variations depending on the industry, or the type of business, or potentially the size of business as well, but what seems more and more clear is that a lot of the received wisdom on why you organize a business in a certain way is a little bit outdated in terms of, not only what we want to do, but how we want to be able to do it. So I think we are going to see some pretty significant changes to what, let's say, standard or best practice organization structures look like.
Loretta Faluade: Yeah. Thank you so much, Nicole. I enjoyed this conversation and I am so glad you came on to help us understand the question, and answer the question, has business changed forever? Well, thank you guys for joining or tuning into this episode of Coffee Chats With the Pros and we hope you enjoyed yourself. Again, thanks so much Nicole for being here, and until the next episode, I hope you guys have a fantastic rest of your day. Thanks.