The Future of Digital Enterprise in 2018
During our February installment of the FWD executive event series, we set out to explore a big question for the year ahead: How will nine digital macro trends affect the enterprise in 2018?
With the help of our panelists — David Gervase, head of retail emerging products and digital payments of Citi Retail Services, and Jessica Korpela, digital business transformation leader of Rockwell Automation — and an audience of cross-industry senior executives, we explored what’s on the digital horizon this year.
From rethinking the “linear” customer experience to upending legacy thinking, below are five key takeaways from our 2018 trends executive briefing at Soho House Chicago.
1) Businesses are wise to capitalize on the power of classical conditioning to boost engagement, but should pay close attention to just what they are conditioning their users to do and feel.
An unexpected finding surfaced early during our panel discussion: the inherent difficulty in creating experiences that not only drive engagement with customers, but also do so in ways that are desirable for both the business and consumer. The real challenge? Avoiding the unexpected consequences of classical conditioning.
In our 2018 trends report, we highlighted the work of Ivan Pavlov, whose salivating dogs helped us understand the association between stimulus and response and uncovered how it can be used to “train” a particular subconscious reaction.
Savvy brands do so by creating self-service digital environments that put the control back into their customers’ hands, which makes interaction virtually frictionless — what we call the “self-reliance revolution.”
But what happens when what we condition our users to do is unexpected, or worse, completely at odds with our goal?
When discussing an instance of unintended conditioning in her own enterprise, Korpela connected the sometimes unexpected consequences of this psychological phenomenon with poorly performing search functionality. She reflected on how a poor on-site search experience will force users to leverage nonoptimal means to find the information they need, thus conditioning them to do the exact opposite of what the digital team sets out to achieve.
Simply put, by creating an experience that caused unexpected friction and didn’t work the way it was intended, the customers did exactly what Korpela’s team didn’t want — they found a different, more laborious way of doing things.
The takeaway? To be successful, brands have to pay equal attention to what customers are asking for in their digital experiences, and what they ultimately want to condition their customers to do in a particular interaction. For good or bad, conditioning is inevitable, and decision makers must design for conditioned responses that align with their business objectives.
Gervase offered a perfect summation of this finding: “I think we’re challenged [to make sure] the engagement is appropriate as opposed to disengaged.”
2) Increasingly sophisticated customers are demanding more than shiny front-end experiences. Today’s ask: on-demand data and more anticipatory information fueled by backend capabilities.
Customers are only getting smarter about what they can and should expect in the digital space, and the next wave of truly meaningful advances in customer experience (CX) will be in large part driven by backend advancements.
One sentiment echoed by the entire panel was just how far the functionality of many backend systems and architectures is being stretched to meet ever-growing customer demands. Often, the quick fix is to utilize data sets in ways they were not intended to or to misuse systems for temporary solutions — a phenomenon we refer to as “data duct tape.”
And it’s not just a case of possessing or not possessing the correct data to solve for a particular customer need. For many legacy organizations, the data exists, but the methods and tools to make years’ and sometimes decades’ worth of data play nicely to meet customer needs is the real challenge.
Companies with a rich heritage and legacy also sometimes inherit dozens of years of legacy data and systems. This buildup of “muck and [mergers and acquisitions] drama” can often serve as the true bottleneck in deploying effective strategies and creating front-end experiences that serve customers in ways they expect.
So what is the solution? Don’t wait for customer demands to force your organization’s hand. Refocus energy on bolstering backend flexibility and continuity that not only serves a particular demand of customers but can also adapt to changing demands well into the future.
Gervase offered this advice to organizations going forward: “Make sure [you] have the right structure and resources to keep pace with the amount of change that is going to continue to come.”
3) When adapting to the ever-changing digital customer journey, the real answer might be going beyond digital entirely — and doing away with linear thinking.
While we’ve been talking about the blurring of the lines between the physical and digital worlds for some time, 2018 will be an inflection year in which these experiences start to take on a life of their own.
In our trends report, we highlight how the richer and more dynamic customer journey has finally outgrown the traditional brand standards locked in a static PDF and demands a more holistic approach — enter the design system.
Every brand is being forced to transition from static, one-way experiences to more fluid, natural, intelligent ones.
Gervase says it’s already happening in finance — an industry heavily influenced by retail spaces and how they relate to both physical and digital experiences. By citing the importance of things such as store signage, user experience (UX), and the overall strategy behind the retail environment, Gervase highlighted just how important the continuity of an experience is when mixing it with a physical retail location. “When you don’t get that technology right, the UX right, [and] you don’t have the right store signage, . . . we see instantaneous disengagement.”
For legacy organizations, the answer might be employing a wider understanding of how digital experiences are quickly becoming, well, just experiences of the human kind. There’s even much debate on whether the word “digital” will become obsolete sooner rather than later. Instead of considering a digital and physical environment to be mutually exclusive, the answer lies in understanding how the two coexist.
For organizations, this means reassessing how to ensure continuity between digital and physical experiences with their brands — and how to manage such continuity.
By including experiential guidelines regarding light, sound, voice, and motion, design systems weave the experience of being in a physical retail location with that of an app or other digital portal — in ways that could ultimately serve a customer’s demand for a more holistic and seamless brand experience.
4) What’s really holding organizations back — legacy systems or legacy thinking?
Unsurprisingly, a debate among panelists and audience members centered on how culture can foster innovation and fuel digital transformation for legacy organizations. How much do issues such as customer empathy — as opposed to systems and processes embedded in a company’s operations — affect a culture of innovation?
The opinions among panelists were mixed, but all revolved around the same sentiment: Some amount of decentralization is necessary for organizations to move forward at the breakneck speed of the digital age.
That decentralization can occur to a very modest degree is what Korpela referred to as “pockets of innovation,” or digital transformation on a very limited scale within particular departments or processes (rather than as part of a greater, organization-wide initiative).
But can these “pockets” really affect an organization at a level that would put it at or ahead of the digital curve? Korpela shared her own uncertainty about how this could play out on a larger scale when she stated, “I’m not sure [we have put] the foundation in place to even start to get after some of those larger use cases.”
That said, Gervase was quick to highlight how turning some attention to entities outside of his organization has proven a worthy strategy for outpacing the rapid speed of digital advancement today.
By creating dedicated teams to scan its industry’s landscape for promising start-ups, an organization can tap into if not the technology, then at least a new way of thinking. Or, as he phrased it, “Even if we’re not going to invest, we learn something about how people are thinking differently.”
One thing is certain: Legacy organizations will be forced to put their “sacred cows” out to pasture if they want to keep up. And among our panelists, those sacred cows were overwhelmingly outdated ways of thinking.
But perhaps the real key to moving legacy organizations forward faster is to do so strategically. “Sometimes it’s to build a coalition of the willing,” explained Korpela. “Sometimes I make sure to play the long game. Sometimes it’s just being very direct about the way that we have to move forward. I would say you [have to] have a bag of tricks.”
5) And, finally, history does repeat itself . . . but something entirely new might be in store.
The digital age might feel like an entirely new landscape for businesses and consumers — but what drives the digital revolution continues to be the most central elements of the human condition.
Consider once more the “self-reliance revolution” in our trends report. Humans have always gravitated to what is easier, simpler, and more intuitive. Emerging technology simply makes it easier to provide for that innately human preference.
Gervase put it in perspective like this: “To a degree, yes there are things we see that are sort of repeating themselves [...] but we’re using new technology, a new way to speak. . . . I feel like there’s something else happening underneath. We are repeating a cycle, so to speak, but now it’s engaged by and powered by mobile, by machine learning, by artificial intelligence.”
But the question remains: Will the digital revolution set a new paradigm for humankind? In Gervase’s eyes, it’s possible: “The customer journey is different this time, and it may feel the same, it may look the same, but I think the outcomes are going to be different five and seven and 10 and 20 years from now.”
Interested in attending our next event? Send me an email at firstname.lastname@example.org. We have a full event schedule planned for 2018 in Chicago, New York, and London.
About the panelists
Jessica Korpela, digital business transformation leader, Rockwell Automation
Jessica Korpela has been with Rockwell Automation for nearly a decade, making her mark in the project management and mergers and acquisitions department before finally transitioning to her current role two years ago as the first official employee of the digital business transformation team. Jessica spearheads various initiatives to enhance and grow new business based on the digital customer experience.
David Gervase, head of Citi Retail emerging products and digital payments, Citi Retail Services
David Gervase has been with Citi for over two decades, making an impact in various roles including relationship management, portfolio management, and IT. In his current role he operates within Citi’s credit card division and centers on revolutionizing the banking customer experience with mobile and web UX as well as emerging technologies.