It used to be that digital innovation didn’t need to be a cornerstone of every brand’s business strategy. When the COVID-19 pandemic hit, that changed almost overnight. Many businesses were forced to try and implement a digital-first strategy, which left them struggling to understand how to effectively use the digital tools they adopted.
The digital arena, it turns out, is a whole new world, requiring knowledge and skill sets that not every company possesses. In addition to embracing the need for digital innovation, leaders have to understand how the introduction of new technologies and data impacts their company culture. Digital innovation can’t simply be plugged in and expected to run. Businesses need to be aware of how their strategies for capturing, analyzing, and sharing data creates potential barriers or team silos. Organizations should consider taking an audit of their data practices to uncover how one of the following challenges could be inhibiting their ability to be a digital-first organization.
Change takes energy, and it can be a tough sell to teams that are—or feel like they are—already giving 100% of their time and energy. As a result, high-functioning teams often push back when tasked with executing a new process or shifting how they measure or build their goals. You could call this “Newton’s first law of the workplace”—teams in motion will stay in motion unless acted on by an outside force.
Strong leadership is required to be that “outside force,” directing the ebb and tide of change within teams to support a culture of innovation. Capable leaders need to be informed of and effectively communicate new methodologies and their impact on outcomes. Change doesn’t happen because of technology, but rather how you empower your people to use it. Focusing on building alignment within teams and across the organization will help to earn buy-in and empower their teams to embrace change in sustainable ways.
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Goal Misalignment with Organization
As teams scale, they adopt new tools and platforms to help them. By virtue of that fact, engineering, product, IT, finance, and other teams risk becoming sequestered in data silos by mistake. Each uses data sets that speak to their own goals while lacking a complete view of the organization and limiting their ability to collaborate across the organization. This creates multiple versions of what is considered “the truth” and can pit teams against one another as each vies for resources and support.
Teams within an organization need to align around a common goal—namely, meeting the customer’s needs. The only data that links the entire company is data generated around the customer, and companies need to leverage tools that put that data at the forefront. This counteracts the siloed perspective that arises naturally and prevents resources from being wasted on investments that don’t maximally impact the bottom line.
Inability to Tie Efforts to Business Value
Not every shiny new product will create real business value, something that teams can forget when they get caught up in the development process. Many companies make the mistake of assuming they know what their customers want or need without having the data to back it up. This creates inconsistencies in how projects are prioritized and their impact on customer retention and loyalty.
Instead, they should look at customer data and real-time signals to anticipate customer needs and segment insights across different demographics to tailor digital products accordingly. The solution starts with continuously quantifying the impact of your customer’s digital journey and comes into full effect when that data is shared across the entire organization. In this way, all teams understand how their own processes and operations directly affect the customer and contribute to the end goal of continuous product design.
Data & Technology Constraints
Not all data is created equal. The availability of data today can help businesses outpace competitors in innovation and customer success, but only if they have a holistic view of their insights. Many analytics tools can tell you how many people are visiting your website and how long they are staying, but they can’t explain lack of conversion or plummeting revenue. Many of the biggest conversion blockers on websites and native apps are related to design problems, not just technical errors, and uncovering them requires tools like session replay, heatmaps, and more.
Digital innovation requires using the right specialized tools in a proactive way. It’s not enough to look back at past data. Companies need to be anticipating problems before they happen. Anomaly detection technology, for instance, can help teams identify things like potential fraud, like when nonhuman traffic, such as bots, is continuously copying and pasting login info. In addition, real-time alerts can ensure that teams are kept up to speed with any changes, such as a sudden drop in conversion rates.
It’s common to default to established methods and processes, especially when they’ve led to success in the past. When it comes to digital innovation, however, being even one iteration behind the competition can break a company. This might be obvious to the average tech executive, but the digital sphere is now packed with businesses and brands that made the digital leap out of necessity when COVID-19 hit. For them, the culture that digital innovation necessitates is often unfamiliar and awkward.
As with organizational pushback, this is a barrier that is best overcome through top-down leadership. Executives and senior employees need to give their teams enough autonomy—and the right data—to tackle customer problems, not just the tasks associated with their arm of the business. Instead of going back and forth over the “right” solution and missing the window of opportunity, companies that are struggling with digital innovation need to practice “failing forward.” In other words, practice testing many solutions and learn to pivot quickly based on the results.
Moving Forward with Data Innovation
Digital innovation is a necessity for businesses today, especially with the accelerated disruption caused by the pandemic. Whether it’s building the next big app or just converting physical revenue streams to e-commerce, businesses today need to have the right data strategies in place to effectively analyze customers’ insights to create meaningful change for their digital experiences. For established businesses and budding startups alike, knowing the challenges involved is key to creating a game plan that incorporates the right data, the right tools, and the right mindset.
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