This article is based on an email I received from the Promising Outcomes team at the beginning of the year. It elicited a couple of thoughts and feelings and I enjoyed the under current of hope and opportunity for businesses who innovate their way through the pandemic.
The email also imparted some a really great advice on how to approach building customer value – which I’ll share below.
As Rowan and the team so rightly comment, ‘There is no going back to the past that existed before the pandemic. Instead COVID-19 has propelled the world into a very different future.’
Here are a few sections which I thought were worth sharing:
History of pandemics on transformation
History shows that pandemics have a singular effect. They usher in prolonged periods of innovation leading to cultural, technological, and social transformation. The Black Plague is thought to have led directly to the Italian Renaissance. Other pandemics and plagues have similarly led to the flowering of the arts and advances in social policy and technology. No doubt these episodes of change were amplified by the innate and universal impulse to survive.
Innovation – the silver lining of the pandemic
The adoption of new technological behaviours in response to the pandemic, means usage has already reached levels that were not expected for many more years. Some firms will get stronger. Bricks and mortar retailers will suffer. Many will fail altogether (Topshop).
But there is a silver lining, as these changes open new areas for innovation.
Companies are devising fresh tools to improve the experience of remote working, collaboration, and learning; to support new kinds of contactless and appointment-based retailing and to provide new types of online social experiences from virtual conferences to virtual tourism.
Adding value during a pandemic
What will it take to survive and thrive?
Enterprises exist to create value for their customers and thus create value for themselves. To answer this question, examining value creation is a logical first step.
Understanding the value model
The terms on the left are primary for the new customer who bases a judgment of value on the interplay between the product or service and its cost. The terms to the right pertain to an established customer and are the keys to customer retention.
We believe that in a pandemic the left-hand terms stay relatively stable as customers’ needs do not change greatly. True, the widespread need for face masks suddenly appeared in the spring but needs for the basic elements of life such as food and shelter remain as before.
Where and how can businesses build on customer value?
The right-hand side of the equation is rapidly changing, driven by changing customer expectations. As a result of COVID the product may be the same, but how it is sold and delivered may differ from past practice. Consider the plight of the retail industry.
To prepare for the Post-COVID world all organisations need to examine their version of the customer Value Equation carefully and to understand how the content of it may need to change to survive and thrive. The goal is always to improve the service component while making it ever easier for the customer to buy and do business with you
How to improve on the right hand components:
- Data is useful for improving the service and sales experience quality. Analysed data, converted into insight, is 100 times more powerful still.
- Automation is a tool to reduce hassle and cost.
- Digitalisation is necessary for automation and efficient use of data.
- Agility is the capability to quickly attend to the above
The business challenge is how to enhance value quickly with data, digital transformation, and automation. The Value Equation is constant and does not change but the terms and conditions within its right-hand boxes are variable.
Agility – a Covid example:
The MHRA (the UK equivalent of the USA’s FDA) realised that quick approval for COVID vaccines under development was essential. Consequently, they ran their existing approval process concurrently and not consecutively. Simultaneously, they re-engineered their entire process without cutting corners but by removing vast amounts of dead-time. By doing so, they have also reduced errors, re-work and waste, making the process more efficient and less costly. The result: vaccine approvals within two months instead of two years or more.
Data is the new oil. Many years ago, Milliken had a sign over the entrance to its factories: “In God we trust, everyone else brings data.” Today having the right data is important for every organisation.
The MHRA’s entire improved processes depended on data, captured instantly by fast links.
Central to digital transformation will be the automation of many processes, reducing costs, errors, re-work and waste, speeding up reliable service to customers while also putting many out of a job. AI, blockchain and quantum computing will underlie these transformations. It might sound horrific to some, if you work for any organisation that is not agile, delivers poor service and is slow to adapt, it will be.
But here are two silver linings:
- About 80% of digital transformations fail so there will be plenty of work for skilled people to help organisations sort out the mess they are in. The reasons for failure will be many, content for another article perhaps!
- Students who went to university in the autumn of 2020 will graduate and find jobs that do not yet exist in companies that do not yet exist. The change that Gartner predicted will involve huge new job creation. COVID has ensured this.
- Capture and use data, especially customer expectations data, to improve service quality and reduce the hassle factor.
- Use customer data to decide where, in what order and how to automate and to guide digital transformation.
- Adopt agility as an organisation virtue.
Whilst lots has been said individually about the importance of the above for businesses, seeing how they will together impact on the customer value model is really useful. A big thank you to Rowan, Cathy and Bill for sharing.
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