Nearly two-thirds of redefiners embrace the most comprehensive and advanced definitions of digital. But there’s a disconnect between words and actions when it comes to how redefiners value employee and customer experience and how digitally savvy leaders are (that is, not very).
Only 53% of redefiners -- the lowest of any group -- see customer experience as critical to business performance. Financially successful redefiners are far more likely to see customer and employee experiences as critical and nearly all (95%) of top financial performers in the group have an executive in charge of employee experience. Experience is everything.
Invest in experience leadership where it counts to spark change, then take it a step further. Consider moving money out of more ineffective advertising spend to bolster employee – and in turn, customer – experience, and you could realize up to a 16% price premium (consider this formula to get there).
Redefiners have the hallmarks of the early stages of disruption: new entrants are beginning to elbow their way into their industries. Even so, only 29% see disruption as a serious threat to their business. Consider the energy industry. New entrants are lining up, trying their hand in new ways. For instance, the shale business has seen new entrants taking advantage of cheaper financing and new opportunities to “frack” for shale oil that were long ignored by legacy players. Businesses that might never have imagined getting into more regulated, investment-heavy types of energy can get into shale relatively inexpensively, less concerned about legacy players. These new players will help reshape the industry.
It’s crucial for laggard redefiners to align their actions and mindset around digital and the possibility of disruption in order to not just survive disruption, but also come out on top. Those who are seeing stronger financial performance offer a roadmap for other redefiners to follow. Top performers are far more likely to use human-centered design and agile management as well as cross-functional teams. As the dynamics of business become more complex and digital, it’s crucial to change with it.
Only 36% of redefiners say their company leadership is digitally savvy and helps the workforce think in new ways. That’s a problem for a group that aims to change their core business model. Less than half say senior management encourages innovation among employees and 64% aren’t explicitly incorporating digital strategy into broader corporate strategy across the business.
Redefiners aspire to change their business model and redefine their company, but to do so, they’ll need to change the way they lead--and start to build the digital skills they lack. Bring in new, nontraditional leaders – including creative designers or executives from other, more digital environments – who may be able to boost digital acumen and help lead through change more productively.
One-third of redefiners say they’ve put the largest share of digital budget towards creating a more digital workforce. 62% of redefiners say they’ve changed the way they recruit and train to create a more digitally-savvy workforce, but just 28% say that investment is paying off. Why? In large part, this is because redefiners haven’t focused on what matters to employees in technology and ways of working. The essential skills for tomorrow incorporate creative strategy, data analytics, agile management and development to push ideas, products and business forward.
Embrace an approach that emphasizes collaborative, digital ways of working that are most likely to increase productivity, speed up problem solving and bring faster breakthroughs to help redefine the business. Take training seriously and make the time for it. Consider bringing in experts from outside the industry that can help deliver structured programs and new approaches to solving problems.
Redefiners tout the most advanced definitions of digital and over half say they’ve been successful at combating new industry entrants. But what they say isn’t matching up to reality. Profit margins for redefiners have lagged over recent years and as a group, redefiners show many of the hallmarks of early disruption.
In aspiring to change their core business model, redefiners must also change the way they lead and shift to more digital ways of working and thinking across the business. Consider bringing in new, nontraditional leaders to bolster creativity and bring a fresh way of thinking about people and process. It’s about fostering a mindset where ideas are encouraged across levels, more agile ways of work push progress and failing is a part of innovating.
Click on an aspiration to see how each group is managing digital experience, disruption, leadership and workforce--and the financial impact of those decisions.