5 Digital Transformation Imperatives

Start with focusing on customers before technology, and then measure what matters most.

Mainstream, established businesses have reached a digital tipping point. After decades of exploiting information technologies to improve the efficiency of their operations and amplify their communications, they must now shift their focus to digital to deliver greater customer value. Leaders face a stark choice: transform digitally on behalf of customers, or risk being abandoned by them for digitally enabled competitors, disruptive market entrants or new digital business innovations.

Digital transformation requires urgent and fundamental change. Success depends on elevating products and services into digitally enabled solutions and customer interactions into engaging, customer-centric experiences. The companies who have done so are reaping the rewards. A recent study by the Massachusetts Institute of Technology and Accenture reports that companies who reach a higher level of digital maturity are 26% more profitable, grow 9% faster and achieve 12% higher market valuations than their industry peers.

But leaders are struggling to chart a clear digital transformation path and execute it effectively. Most report that their digital investments have disappointed on the bottom line. Sure, they note some successes—a great app here that attracts new users or better data that helps to customize products. But the kind of digital transformation that unleashes new value for the customer? That’s not common.

There are plenty of reasons why companies find moving past the digital tipping point to unleash customer value is slow and difficult. For one, many companies start by delegating too many decisions to digital agencies that may be great at technology but lack customer insight. Or they work with management consultancies whose extensive industry expertise can blind them to breakthrough innovation opportunities on behalf of customers. Too often, the pursuit of digital transformation is not strategic as experts, pundits and agencies act like proverbial kids in a candy store, chasing the next digital fad without a view of what customers need most.

We’ve found that the companies that leverage digital to strengthen their bonds with customers and unlock new sources of growth share five imperatives:

Put Customers Before Technology

When customer insight guides technology, market adoption is faster, margins are greater and the impact on growth is more substantial. Companies must look past the shiny new technology toys to focus on what matters most – insights about customer needs. What are their perceptions? Motivations? Pain points and daily hassles? Harnessing their problems and desires to develop digital solutions and experiences is crucial to being more relevant to customers.

Scholastic, the world’s largest publisher and distributor of children’s books, knew it faced increasing competition as more parents shopped through Amazon and children engaged in new media. But it needed a solution that was bigger than just another e-reader. Scholastic partnered with Prophet to find an innovative solution that would be compelling to children, trusted by parents and teachers, and differentiated in the market. The result was an interactive tool called Storia that helps parents and children navigate the world of children’s literature, specifically focusing on a child’s reading level.

Shift the Organization

Leaders can tackle the greatest barrier to digital progress, organization inertia, by arming themselves with the understanding that digital transformation requires embedding new methods and mindsets. In a world where culture eats strategy for lunch, failure to build an organization’s ability to move faster, flexibly, collaboratively, and with more risk-taking is the chief pitfall to avoid in transformation efforts. A digital mindset requires thinking like an entrepreneur while leveraging the assets of an established firm. When companies build digital capabilities, digital becomes a core part of how work gets done. And of course, that positions them to better serve the customer.

Electrolux, a global leader in household and professional appliances, realized it needed a digital transformation if it was to leapfrog the competition and create engaging branded shopper experiences. And that required crafting a culture of experience innovation. Prophet partnered with the CMO and CEO to develop digital executive leadership across the organization, to create digital education summits across the globe and ultimately to create a governance model to drive digital transformation. Together, we developed a new way of working and empowered the entire organization to create differentiating and impactful digital experiences for customers.

Think Strategic, Act Bold

Building urgency is crucial to success but only if it leads toward a destination around more valuable customer relationships. Leaders must chart a path that defines the customer growth opportunities to pursue, the digital moves to make and the tools required to support these efforts. Sequencing the transformation and developing the right pace of digital innovation is a difficult challenge that can only succeed through clear strategic direction combined with a bias for action.

“Building urgency is crucial to success but only if it leads toward a destination around more valuable customer relationships.”

Monsanto knew it needed to transition from being product-focused to customer-centric and turned to Prophet to develop a new grower-focused approach. A robust customer segmentation revealed new opportunities to deliver differentiated value to growers, primarily through tools that would enable farm productivity. Monsanto started to deliver value beyond the product by pairing growers with Monsanto agronomists who provide customized advice for increasing yield. Today, customer-centricity as at the center of the company’s growth strategy, and can be seen through examples like the recent acquisition of a weather company – Climate Corporation – that will use weather data to help farmers optimize productivity.

Start Now, Improve

Transformation cannot wait. Digital moves too fast and is too complex to work on ten-year plans or monolithic, pie-in-the-sky customer engagement platforms. Rapid innovation based on frequent trial, measurement and refinement has proven time and again to work best. A customer-inspired digital strategy puts technology in its proper place, treating tech as a tool to better serve customers, not as an end in itself. When launching and then enhancing MVPs (Minimum Viable Products) becomes standard operating procedure, companies know they are on the right track. Seamlessness is crucial. Every innovation cannot come at the cost of replacing everything a customer already values. When new ways of providing value are integrated with what already works well, customers adopt more rapidly and are far more likely to be satisfied with the end results.

Schneider Electric, a B2B company is transforming to change the way it works throughout its complicated, multi-layered value chain. By providing tools and mechanisms for understanding new customer groups, Prophet is helping Schneider Electric drive demand with electrical contractors and facility managers, while also enabling traditional channel partners with better tools for delivery. Today, customized online portals and mobile tools are enabling contractors around the world to make smarter project decisions, while end customers are empowered to better monitor energy usage through a dashboard called Building Insights.

Measure What Matters

Measures matter when they drive improvements to digital transformation. The key is to link business impact to the work digital investments undertake. Without a clear connection, leaders scale up winners and eliminate losers far too late or never at all. When companies understand the relationships between customer behavior, the motivations that underlie behavior and the impact of behavior on the business, they can rapidly accelerate the pace of digitally enabled growth. In a digital world, it is possible to measure almost everything. So focusing on what really matters and taking action to address what the measures reveal becomes the job of everyone in the company.

For Charles Schwab, determining the most important metrics has been critical. With investors increasingly relying on digital and mobile for both financial transactions and information about investment decisions, it’s created a range of content and digital tools. And it tracks them for engagement and conversion across different channels and investor segments. Thanks to this commitment to its customers and its “Own your tomorrow” positioning, Schwab is earning record sales and profits and outpacing its competitors.


Taken together, these five imperatives are the keys to harnessing digital to fundamentally enhance a company’s core value proposition and create a competitive advantage. Focus on these imperatives yields digitally enabled solutions and experiences that boost buying behaviors, and accelerate financial results.

While digital has been rewriting the rules for growth for years, employees, boards and shareholders are now challenging leaders to chart next-level strategies. Established businesses have more at risk, but those that achieve this transformation combine current strengths with digital dexterity and can achieve uncommon growth.

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