I am moderating a panel at the World Economic Forum in Davos in two weeks. The title is: "The New Digital Context -- What societal, economic and technological forces are shaping the digital landscape?"
As we all head off into the New Year, I wanted to look back at what I consider to be the "Best of..." for 2013. Note that the following is based entirely on my personal opinions -- it is not grounded in Forrester's research or formal positions. Here's what I liked from 2013, in no particular order...
One: My favorite book of the year is 4/5s bummer and 1/5th hopeful. Erik Brynjolfsson and Andrew McAfees' Race Against the Machine outlines how prodigiously improving digital technology is going to put millions out of work, from truck drivers to radiologists. But the authors end on an up note: human beings cannot win the race against the machines, but they can excel if they race with the machines -- that is, use digital to be better doctors, geologists, factory workers, or chefs. There is hope for mankind...
The age of the customer is a 20-year business cycle in which the most successful companies will reinvent themselves to systematically understand and serve increasingly powerful customers. Re-engineering your company to become customer-obsessed will be hard work, but savvy C-level executives I’ve been speaking with about this tectonic shift immediately grasp the opportunity.
I spoke about the age of the customer today at LeWeb Paris (you can see the video here, and my slides here) where I focused on one early element of customer empowerment - the mobile mind shift. Your customers expect any information or service they desire be available to them on any device, in context, at their moment of need. Forrester’s global Mobile Mind Shift Index measures how far along a group of consumers are in this change in attitude and behavior.
To serve these customers, you will have to move from systems of record to systems of engagement. Apps are just a small part of that equation. Instead, we’re talking about re-engineering your entire company to deliver great digital experiences. Your brands will compete against Google, Microsoft, Oracle, and Amazon for setting the bar for great customer experiences. What It Means: In the future, every company will be a software company. Software is the new business currency more important than financial capital.
We are now in the age of the customer, with buyers using technology to gain control over institutions. That power flows from customers’ newfound ability to seamlessly price, critique, and direct their purchases.
What does this mean? At the risk of being overly dramatic, the future belongs to customer-obsessed enterprises.
All of this holds many implications for your company — especially around marketing — and in future posts I will explore those dynamics. But one question intrigues me at the moment: What will the age of the customer mean for the techies in your company?
Every 10 years or so, a company in the technology industry that appears to be dead, dying, or stagnant makes an amazing turnaround. In 1980, it was Intel; buried by the Japanese in the dynamic memory business, it reinvented itself as a microprocessor company. In the 1990s, it was IBM — saved from breakup-hungry investment bankers by Lew Gerstner to be reborn as a services company. In the 2000s, it was Apple.
It’s the 2010s now, so who’s poised to play Luke Skywalker?
Here’s the case for Microsoft. One, it’s still a powerful brand, as were IBM and Apple. Two, a new generation of leadership is about to arrive, with fresh ideas and the courage to break with the past. Three, the DNA of the company lies in programming — perfectly positioning it for the next big industry wave.
Did I lose you on that last one? Here’s how the logic flows:
Over the next five years, the Web will become the AM radio of digital — always around, cheap, the lowest common denominator — but not the place where high-value commerce and content is centered. The Web is a file-based architecture; 95% of the processing happens on remote servers, with only 5% on the PC, tablet, phone, or whatever the endpoint device might be. The advantage of the Web is that the architecture is very simple, it runs on all devices, and it can be made to do lots of good work — think salesforce.com or Facebook. It’s actually quite amazing how companies like Google have pushed HTML (and antecedents) as far as they have — akin to saddling a cow and getting it to run competitive times in the software Kentucky Derby.
Forrester held its European Business Technology Forum in London this week -- a convocation of CIOs, Enterprise Architects, Infrastructure and Operations Professionals, Security and Risk Professionals, and Sourcing and Vendor Management Professionals. Lots of great connections were made in London, as per the pic on the left. On Monday night I hosted a working dinner for 20 executives -- a very lively group from BASF, Tetra Pak, Unilever, KLM, Bayer, the WTO, and other large European companies. What's very much on the minds of these BT execs is how to position their companies to be more digital. And when they use the term "digital" they mean, "Using technology to win customers."
So over dinner we worked on a simple question: "What are the top 10 things a CEO should do to ensure that his or her company can successfully become digital?" Here's the best thinking that the group could muster after much good food, wine, humor, and fun. I have built in some links to relevant Forrester thinking...
Ever wonder what's going to happen next in smartphones? After the conservative iPhone 5 and the relentless and surprising onslaught of Samsung, it's clear that Apple's next move in the space will have to be revolutionary. Ennui has seeped into the minds of some Apple faithful as they have become bored with their phones, and envious with what's happening over the fence in Android's backyard. The iPhone 6 (not due for another 15 months) will be a signal moment for Tim Cook and team -- it must astound and amaze, all without you-know-who leading the charge. This will either be a first step toward Sonyland or a breathtaking victory for the new regime. There will be no room for the careful incrementalism of the 5.
In 2011 I asked 12 of the top tech CEOs if their salesforces were getting their companies to their strategic goals. The CEOs had scathing feedback -- their salesforces were behind the curve, low IQ, lacking the confidence to call at a high level, unsystematic, and stuck in low growth. It wasn't pretty. At Davos this year I surveyed 15 CEOs across 10 industries -- I wanted to know what they were personally doing to turn this mess around. Yesterday I spoke at Forrester's Forum for Sales Enablement Professionals (persona to the left) in Phoenix and I presented the results:
The CEOs are very engaged in sales. Their activities include:
Selling -- "1/3rd of my time." "I meet with 1,000 customers a year."
Measuring -- "I build metrics and hold the salesforce to them."
Visioning -- "I spend a lot of time broadcasting the strategy and vision to the salespeople." "I preach the vision through my blog and at company meetings."
People -- Hiring, training, awarding, compensating.
That's the good news. The bad news is that CEO activity is frenetic, unplanned, and unsynchronized. In short, the CEOs approached selling activities with the same disorganization they had observed in their salesforces. Enter the Sales Enablement Professionals. These executives are building programs to increase the productivity of sales at companies like Cisco and HP.
I have arrived home from the multi-layered onion that is Davos, aka The World Economic Forum. Here's what I learned from the sessions, hallway conversations, head of state speeches, late dinners, early-morning breakfasts, and serendipitous encounters.
Optimism about the economy was running hot -- especially when it came to the U.S. Budding energy independence and a recovering housing market are seen as big drivers for the American economy -- and its turnaround will pull the world economy out of its ditch. Or at least, that's how the story goes...
I was at a dinner with Steven Levitt, the author of Freakonomics and his follow-on book, Super Freakonomics. He works with large companies to help them gather data on their businesses and then make rational, economics-based decisions -- how to improve cars or create the perfect fast-food menus. There's only one problem -- the execs refuse to believe the data. Big Data may have arrived, but the age of Big Gut persists.
CEOs should be aware of an approaching tech war — because its outcome is going to change their customers.
As the Web becomes the AM radio of digital, the mobile App Internet will rise. This market will be dominated by two or three ecosystems — semi-closed worlds built on a closely fitting set of apps, phones, tablets, computers, operating systems, and partners. An ecosystem owner will possess extraordinary market power — able to dictate terms to content providers, customers, and application developers. It doesn't matter what you sell — insurance, pills, cars, energy, bonds — you'll be reaching many of your customers through these ecosystems in the future.
Who wins? Apple leads — many already happily live in the iOS ecosystem. While the company's footprint evolved haphazardly (whoever thought iTunes would become a trillion dollar commerce hub?), Apple's current level of integration makes it the gold standard.
Google is busily copying the Apple playbook with the Android ecosystem. That's why Google bought Motorola.