Digital Transformation: Thinking to Level 2

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I attended my regular Friday morning BodyPump class today and the instructor didn’t show up. She called in sick but too late for the gym to organize a replacement and so since the class is filled with very serious regulars one of them simply walked over to the studio computer, tapped the BodyPump icon, and down came a massive projection screen. A 20 second countdown later and I was in my very first virtual class.

I know virtual exercise classes have been around for many years for both studio and home use so I’m not revealing anything revolutionary. What struck me as soon the class was 5 minutes old though was the realization that, in my mind anyway, our real-life instructor, the one I’ve been raving about for weeks as being the queen of the perfect cue and of the engaging and constant chatter, had been digitally transformed (replaced). Has anyone ever heard of Wally Pipp? He’s the New York Yankee who took a day off in 1925 and was replaced by some unknown bench warmer (to that point) named Lou Gehrig. The latter took over Wally’s spot and went on to play in the next 2,632 consecutive games over more than 16 years. I wonder if our real-life BodyPump instructor is going to become our very own Wally Pipp.

Afterwards, the situation got me thinking about the advantages and disadvantages of a gym utilizing a virtual class format over a real-life instructor. I wondered whether they’d tried it before on a more programmatic basis and whether they’d ever surveyed the members to learn whether there was an appetite for that kind of class delivery. What are the potential cost savings? What can virtual programming do to the cost structure of the gym when less people are required to administer, schedule, and deliver a set of classes?

I was Level 2 thinking.

Digital transformation is all over just about every form of media and yet for those of us buried deep in its strategy and roll-out we can easily forget that whatever it is, it’s not readily obvious to everyone. Sometimes we’re required to offer up an explanation to people who (mercifully for them… I honestly think this sometimes) lead lives that seem to operate at a wavelength that is at odds with society’s rush to embrace the digital realm. That’s why, for me, the story of our instructor being replaced by the pixels of five perfectly fit Australians, pixels that can be replayed a multitude of times all over the world at any time, is an apt analogy.

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When the business world talks about digital transformation, it isn’t just blowing smoke. It’s real. It’s significant. It’s going to separate the strong from the weak, the smart from the not-so-smart. And it’s going to trigger conceptualization on a scale that’s hard to comprehend. Why? Because while we can hazard guesses, we just don’t know the extent of change to come when we apply the power of computing (fast and cheap), robotics (eventually ubiquitous and infinitesimal), process automation (time compression), real-time customer and business process interactions (customers fuel the processes), and the limitless power of the human brain (it still confounds science). It means that for a company to get to the state of being truly digitally transformed it is going to have to systematically excel at exploiting those elements. It will have to have processes in place that automatically collect, compute, and perform actions against customer data. It means that a company will need to be a lot more intimate with the target of its affection. That’s you, the customer. Companies are going to want to get a whole lot closer to you. And you know what? You won’t mind at all. You will actually want them to because up to now through your actions and your choices for how you live you’ve demonstrated that you expect better products, better service, and better solutions, all at a cost you can afford. To satisfy you, to be that responsive and agile, companies are going to need data. Lots of automatically collected data about you, about what you want, what you expect, how you’re doing, why you did what you did with the product, how you managed to get the result you received, what you hope to do next. And this is where the human brain becomes a more significant factor. All that data can be taken at face value (Level 1 information) but what smart people do with Level 1 data is they start wondering about why the data is the way it is (Level 2 thinking). This eventually leads to Level 2 data.

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Mostly, today, the data that companies collect is Level 1 information. It’s important but it’s high level and is for now just the first step towards creating stronger insights into their customers’ behavior. The pyramid above graphically represents the magnitude of expansive thinking (the amount of questions that are triggered) at each level of the data.

Let’s use the Marketing department to help explain.

When we consider what it means to measure the digital readiness of a marketing organization we right off the bat look for binary information like this:

  • is the Chief Marketing Office (CMO) a member of the senior leadership team?
  • does the organization consider itself customer-centric?
  • is there a systematic process for data cleansing?
  • are the processes designed to allow for consistent cross-channel messaging?

Those are just a few questions we consider and the answers to them provide us with high level information (Level 1) that helps inform us to a small degree about the state of the organization’s maturity and digital readiness. I say small because even though they are binary questions we actually think of them as open-ended because depending on the answers provided many other questions can follow on. For example, the fact that a CMO is not a member of the SLT and is instead part of another organization (typically Sales) that reports into the SLT tells us something about Marketing’s strategic relevance from a corporate point of view. Meaning, how seriously is the CMO seen as a strategic leader by the members of the SLT? Is the CMO new and relatively lesser known? How much of a voice does the CMO have in the industry through published articles in trade magazines? Likewise, if the Marketing organization has yet to implement a consistent messaging experience across multiple user channels, we can ask why not. Do they know how their peers are doing? Have they bench-marked? It’s highly likely they are behind the curve and are probably bleeding customers to competition that provides a better experience.

Level 2 information is a follow-on activity from Level 1 and a follow-on question can look something like this:

  • if the CMO reports into Sales leadership, how does the Marketing organization gather experiential data about existing customers?

Level 2 information is tougher to do in a binary manner. It’s not impossible but because the line of questioning is more consultative in nature, Level 2 questions tend to be more open-ended. They also tend to surface more actionable insight.

Why does it matter where the CMO reports? Because knowing how a Marketing organization gathers knowledge about existing customers helps determine the state of their digital readiness and the state of their ability to optimize the experience of the customer through their entire life-cycle (not just when they were in the state of buying, which is the conventional focus area of Marketing). Why is that important? Because considering the customer as having an entire life-cycle with you, the company, is the first step in recognizing the need and opportunity for making improvements at each step in their journey. If Marketing reports into Sales they are less interested in pursuing the customer’s engagement post-sales. They have little incentive to do so.

For a company to be digitally ready they must view the customer as a living and breathing entity with a lifespan that can be influenced and enhanced with smart injections of specific and relevant attention and sincere interest at certain points in their journey. This approach ultimately drives up engagement and loyalty, which should translate into stronger revenue. If the Marketing organization is going to be responsible for managing that overall messaging then they defacto represent the customer inside the company. Having the Marketing organization on par with other SLT leaders therefore puts the customer in the same room.

Level 2. It’s richer information for our Transformation Services team at Oracle Marketing Cloud that allows us to plan a strategy for helping our customers evolve to become truly digitally ready.  Level 2 is also a way of thinking for any organization that wants to digitally transform. Level 2 thinking is not just for Marketers. Anyone who works with customers and is interested in evolving the relationship to a higher plane should exercise this deeper abstract way of thinking. It opens pathways to critical information that leads to full digital capability.

Think to Level 2. You don’t want to be Wally Pipp, nor do you want to be my Friday morning BodyPump instructor who was replaced today by a virtual version for a microscopic fraction of the price.

(Pssst…. I’m hoping the gym doesn’t find the cost-savings so compelling that they drop the real-life instructors. I’m still a little old school in some ways).

About Peter Armaly
I get jazzed by automation, big data, and blockchain tech. Business, technology, and fitness are things I understand. Scotch, wine, food, and fiction are things I appreciate.

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