As I reflect upon a month full of customer discussion, it becomes clearer that future and sustained competitive advantage hinge on excellence in two critical areas: collaboration and analytics. The need for a relationship-based enterprise becomes more apparent as we look at the critical need to:

1. Re-invent customer relationships
2. Leverage the collective knowledge and talent of our organization
3. Partner to facilitate operating dexterity

This relationship imperative makes collaboration excellence a critical success factor; and a key enabler is social computing. I don’t mean Facebook, Twitter, LinkedIn, or YouTube (although they play a role) but rather the use of social technologies to drive effective collaboration and communication. This evolution to social business moves the enterprise up the collaboration axis as described in the diagram below.

The other critical area of importance is actionable intelligence. This may be an over-used phrase these days, but its importance cannot be understated. I believe the enterprise approach to “Big Data” is the key to future success. Why? Because our complex world demands that we act with speed. We don’t have time for annual planning cycles or the luxury of certainty in our decision making. We are pressured to be adaptive, flexible, and collaborative due to rapidly changing business models and windows of opportunity that continue to shrink. These dynamics drive the need for analytic excellence, operating dexterity, and an awareness-to-action framework. Over time, companies will adopt this framework to sense market stimuli (e.g. a customer about to churn) glean insight from that stimulus and drive action with the speed the market demands. Additionally, decisions will not be the result of long study, but rather quick decisions with some degree of uncertainty. This model requires the ability to monitor the results of our decisions in real-time and make rapid course corrections.

This leads us to the other component of future sustained competitive advantage: The Prescriptive Enterprise. Those companies that leverage advanced analytics to prescribe outcomes – not just predict them – will move towards the desired state (the upper right hand quadrant in the diagram below). Movement up the collaboration access and across the actionable intelligence axis facilitates this movement to the desired state. Business strategies should embrace and facilitate this movement.

A key component of these business strategies will be digital expansion. We are seeing this play out in the rapid business adoption of social media and the rush to mobility. With this expansion comes the explosion of data from a growing number of channels. As described in previous posts, the absence of holistic digital strategies that address both channels and data will slow the enterprise movement towards the desired state. Whereas past efforts to create this holistic view have been hampered by organizational silos, current and future efforts will add environmental complexity to their list of obstacles. Oversight, governance, alignment and direction have never been more important. Digital strategies cannot succeed without the right structure and the full commitment and support of the executive team. These strategies, organizations and structures should address three key components described in the diagram below:

1. Voice of the customer (VOC) – customer intelligence is the key to customer intimacy, and getting closer to customer dominates the CEO agenda. The emergence of VOC Command Centers will drive a renewed and more successful focus on VOC initiatives. The insight required from each channel and business function should be clearly understood and defined.
2. Multi-channel integration – the role of each channel in the context of the broader strategy should be clearly defined. Channels should not work at cross purposes, but should be harmonized to meet the objectives of the business.
3. Performance management – how to measure the customer experience and the success of the broader digital strategy should be understood and harmonized across channels and business functions.

In the diagram above, each node represents a strategic element that must be managed as part of the broader digital strategy. Executive sponsorship and Steering Committee oversight are critical to the success of the program. This may seem obvious, but as I’ve described in the past, the perfect storm of innovation (Social, Mobile, Big Data, and Cloud) creates a complex environment unlike any we’ve seen before. Traditional approaches to Governance (many of which failed in the past) need to be revised to address this complexity.

As an example, the diagram below describes a multi-channel integration scenario. Let’s focus on the strategic elements across the social row in the diagram. What role does social computing play in supporting the objectives of each business function? How does that role support the other channels? For example, does the inclusion of Facebook or Twitter buttons on the company website actually drive traffic from your site or does it complement your broader strategy? The digital strategy should harmonize the role social plays across functions and across channels.

The current environment provides us with a wealth of customer data, and the related challenge of mining it for intelligence. Our understanding of customers through this intelligence is critical to the rapid introduction of new innovation and the creation of a consistent and optimal customer experience. This creates the second, and in my view the most critical component of digital strategy: The voice of the customer. Here again, past efforts around single view of the customer have failed for various reasons, and the complexity of the environment makes our next attempt much more challenging. The key components of a voice of the customer strategy are represented as rows in the diagram below. How the strategic elements in the rows are managed holistically will drive voice of the customer effectiveness.

Though our environment is more complex, we have enabling technology that if utilized effectively, simplifies our journey. VOC Command centers are an example of enabling technology. These command centers combine data, content, human expertise, and various analytic methods to effectively deliver the voice of the customer. Early examples like Dell’s Social Radio merely scratch the surface of the future command center. How the enterprise embraces these command centers and organizes to exploit them will have a direct impact on competitive advantage. Basic social listening will deliver more insight through the capture and automated application of human intelligence. The ability to expand this analysis to include voice and video content increases the base of insight available to the command center. All of this translates to customer intelligence that improves the customer experience and speeds innovation cycles.  

This framework for digital strategy can be tailored by industry and leveraged to jump-start strategic efforts. An example of a generic framework might look like this:

The journey to sustained competitive advantage is not an easy one, but the path is getting clearer: collaboration and analytic excellence enabled by a holistic digital strategy.