We are constantly told that millennials are breaking the workplace rules. They refuse to work 9 to 5. They demand iPhones. They can’t work unless there’s a fridge full of beer and a pool table in the office. And with a growing war for digital talent, many digital leaders are setting their sights firmly on attracting the digital generation to their firms.
But a recent IBM study suggests an even more interesting conclusion. While the study largely agrees with every other conclusion on the desires of the millennial workforce, it also strongly pointed out that it’s not just “youngsters” that want autonomy, flexibility, empowerment, an awesome work environment that ignites their creativity and the feeling that what they do makes a difference.
It’s the Tools and technology chapter, which has been an absolute beast of a research project. After all, where do you start outlining all of the tools and technologies you need to transform your business to become truly digital? To digitize your business strategy?
The short answer is you don’t.
In most of our research for the Digital Business Transformation Playbook we’ve concentrated on finding and outlining best practice examples of traditional firms that are transforming to embed digital into the heart of their business strategy. As one of our Research Directors so rightly pointed out early in this research, “horses don’t like stories about unicorns”. It’s not so helpful for us to tell you “hey, just copy Amazon” when you run a retail bank with a chain of a thousand branches around the world.
But in this instance we do need to hunt for unicorns.
Because the unicorns are nailing it.
Firms like Amazon, eBay or Spotify manage digital technology on the massive scale, yet retain a high level of innovation and agility. So what sets them and other digital masters, apart from digital dinosaurs in their relationship to technology? What can we learn from how they plan, manage and invest in technology? What we found was:
It’s no great shocker that digital skills are in short supply.
In our annual organizational and staffing survey of eBusiness and channel strategy professionals, we found that while eBusiness budgets have grown by more than 10%, finding the skills and capabilities to execute on a digital strategy is becoming harder and harder.
Digital transformation is undeniably complex and often misunderstood. To look at why things go wrong for some firms, lets take a quick look at three high-profile examples of transformation - two failures and one new initiative. These highlight some common mistakes that senior executives make:
By here, I mean here in Europe. And it’s here to stay.
Amazon launched Europe’s first Black Friday sale in 2010, with a small fanfare and some success. Most European retailers did the polite thing, and looked bashfully away while their brash American cousins celebrated a day with zero cultural significance this side of the Atlantic. “We’ll wait for Boxing Day” was the overwhelming sentiment.
But consumers bit, and the following year a small handful of global brands like Apple and Walmart (in the form of its UK subsidiary Asda) followed suit. Black Friday grew somewhat organically.
But 2014 was different.
Previous Black Friday successes unleashed a literal tidal wave of copy-cats in the run up to Christmas last year. This was most publically a UK phenomenon, with well-known brands like John Lewis taking part, but don’t fool yourself into thinking it was just a quaintly British emulation of the American trend. French and German retailers like Darty and Saturn also indulged. Akamai saw triple the normal web traffic to retail websites across Europe on Black Friday. But it was the UK that bore the brunt of the impact as:
High profile websites buckled and crashed under unprecedented load, with many retailers reporting upwards of a 300% uplift in traffic on Black Friday.
It’s no secret that digital skills are in short supply. In fact, while some three quarters of executives tell us their firm now has some form of digital strategy (however rudimentary), a paltry 16% say they have the skills and capabilities necessary to deliver it. Even though the average eBusiness team’s staffing budget is growing year on year, finding the skills and capabilities to execute on a digital strategy is becoming harder and harder.
eBusiness Teams Have An Average Of 95 Employees. The average eBusiness team has 95 team members. As would be expected, the larger the worldwide revenue, online revenue, or total employee count is, the larger the eBusiness team is.
Technology And Customer Experience Are Still The Hardest Roles To Fill. Technology, customer experience, and business analytics are the hardest jobs to hire for. Additionally, technology and customer experience are the most outsourced, and technology is the most understaffed.
The Digital Skills Gap Continues To Widen. Digital transformation brings an increased level of responsibility for eBusiness employees who are often leading the charge for company-wide transformation in addition to handling day-to-day operations. As all business becomes digital business, eBusiness teams will have an increasingly difficult time sourcing talent.
In 2014 digital business hit the boardroom and the C-suite offices: At the beginning of 2014, 93% of executives told us that they believed that their industries would experience digital disruption in 2014. But our surveys and interviews also tell us that many executives don’t believe that their firm has the ability to execute on that plan, and many don’t have confidence in the plan itself.
Centres of excellence and shared service teams are nothing new. Its a concept that Technology Management teams have been wrestling with for years, if not decades in an effort to streamline underlying technical architecture and simplify application landscapes. In the digital world, its a less well established approach, but one that is gaining momentum as an emerging set of best practices forms around how to organize and manage a global digital strategy.
Pete Blackshaw has led the charge over the last couple of years at Nestle, establishing a widely publicised Digital Acceleration Team. The team focuses on “listening, engaging, inspiring and transforming” across Nestle’s disparate and diverse markets and brands. Its not just an operational centre of excellence, it walks a fine line between dictating to local teams and being a paper tiger with no real influence. And it does so very effectively.
But why “acceleration team” and not “centre of excellence”.
I believe that the language is important. For a local team, the idea that a global “centre of excellence” is going to roll up and tell them what to do can be a very negative experience. Do the global team understand the nuances of my market? Will migrating our lean, agile eCommerce platform onto the behemoth enterprise platform slow us down?
“Acceleration” helps create a more positive and collaborative approach.
Depending on the viewpoint of your favorite economist, the recession may be over. But retail growth is far from buoyant in many markets. The UK retail sector shows healthy signs of recovery, while US consumers seem be less confident. There are numerable success stories; John Lewis passed the £1bn online revenue mark this year, while Macys is in its fifth year of double-digit online growth, in spite of a slightly shaky offline performance. But as an eBusiness leader, no matter what your local market conditions, I’m willing to bet one thing.
Your growth targets haven’t gone down.
For many years, growing online revenues has been a core strategy for most B2C firms, and many B2B firms are also riding the eCommerce wave. But as markets become crowded and competition becomes tighter, globalization is an increasingly attractive option for eBusiness professionals. With southern European markets seeing online growth rates in the high teens and even bigger opportunities like Russia and China on the global horizon, it’s no surprise that an international strategy is high on the agenda for many eBusiness leaders.