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Business Transformation for Growth: Three Rules you Can’t Ignore

How customer-first thinking, sharpened digital strategy and renewed purpose drive high-impact change.

Companies are aggressively pursuing business transformation to drive top and bottom-line growth and establish a more effective business model for the future. The pressure for reinvention feels increasingly urgent as organizations look to find their way past the turbulence of the pandemic. Markets are fluid, technology is shifting and people are demanding more digital solutions than ever before.

Companies that settle for incremental progress simply won’t be able to keep up with fast-moving customers.  Companies that embrace this new landscape, however, can achieve uncommon growth – purposeful, profitable, transformative and sustainable. With agile and adaptive approaches to transformation, they can uncover new sources of revenue and relevance in record time.

“When a company’s purpose is clear, that North Star illuminates everything they do. It informs an approach that bridges corporate purpose with its promise to customers.”

Business transformation for growth isn’t easy and companies, especially ones burdened by unsuccessful transformation efforts, are justifiably reluctant to try again. Another common barrier is knowing where to focus and how to start. Too often, leadership gets derailed by decisions about technology. However, all transformation efforts – even ones undertaken as digital transformation – aren’t about tech. They’re based on people.

Taking a human-centered approach to transformation, and working with a variety of organizations in multiple industries, has shown us that no matter what the goals are, companies must follow these three rules of transformation to achieve sustainable growth.

Three Ways To Approach Business Transformation

1. The Customer Is Everything

Companies have been giving customer-centricity lip service for years, but they often fail to appreciate its transformative potential. When organizations put this objective arbiter – the customer – at the center of all decisions, it provides clarity and focus.

This requires an organizational obsession with customers and potential customers. What makes these people happy? What ruins their day? What can your organization do to help their lives run more smoothly? What makes them trust you? What inspires them?

As this customer focus permeates an organization, it gets easier to stop thinking about just selling products and shifts the focus to serving holistic customer needs.

Using this lens, companies can analyze demand opportunities and create a customer value matrix, complete with specific, measurable, time-bound goals. This allows them to identify, prioritize and activate initiatives that deliver on this strategy.

Customer-centric companies don’t spend much time fixing potholes in a customer journey. They don’t have to. Instead, they’re looking for ways to leapfrog expectations. And they also become more adept at changing course, quickly abandoning areas that no longer serve customers.

2. Be a Digital-First Company. But This Time, Do It Right.

All transformation is digital, and companies have known that for decades. But even as businesses invest trillions in digital transformation, they still fail more than they succeed. In our view, that’s because they fall into the trap of thinking technology is the answer. It’s become clear, that tech alone isn’t the answer. The goal is to become a digitally built business, which requires people who use digital-first thinking.

Digital transformation can only succeed when it focuses on people. To be effective, they must transform value drivers that impact others, including both external experiences and internal ways of working.

Companies can begin by setting an overall digital vision that resonates with both customers and employees. That vision requires a clear understanding of which areas will drive the most business and value, complete with specific, measurable objectives validated by key results.

Of course, the technology involved is a critical element, but the bigger issue is about the people in an organization. Do they have the right skills? Are they led and incentivized in a way that allows them to be digital-first? How are they recruited and retained? How does the culture flex and evolve to position the organization for growth in this digital-first world?

With clarified digital goals, companies can begin to iteratively deliver new products, services and experiences. They can regularly re-evaluate strategy and tactics based on key results and customer input.

3. Build an Agile, Purpose-Driven Organization

Companies that know what they stand for are inherently better at customer obsession and building businesses digitally. When a company’s purpose is clear, that North Star illuminates everything they do. It informs an approach that bridges corporate purpose with its promise to customers. This commitment to the customer, with investments aligned to support it, is the growth lever. It creates greater relevance and impact in the market.

This past year has demonstrated just how critical it is to have a clear and authentic purpose. It must resonate with every stakeholder group – not just investors and employees but also customers and members of all its communities.

Today’s consumers, especially millennials and Gen Z, want to do business with companies that make the world a better place. They want to see companies commit to sustainability, diversity and fairness. And they’re demanding increasing transparency. Consumers can forgive brands that make and admit their mistakes. but as soon as they catch a company putting profits ahead of purpose, they’ll move on.

Achieving this agility and commitment to purpose often requires sweeping changes in a company’s culture, capabilities and organization.

Prophet believes human-centered transformations– purpose-driven, customer-focused and digital-first – are the best path to uncommon growth. We talk about the “mind, body and soul” of an organization; and that to transform, a business needs to address all these elements.

For instance, a large financial services company came to us with declining revenue as customers turned to newer fintech entrants. Our business transformation agenda helped guide the CEO, chief growth officer and leadership team to a new company purpose, making life easier for key customer segments. This digital-first strategy vastly improved its agility, so it could quickly pivot to meet people’s needs. Within a year, it increased new business revenue by 8% and drove a 20-fold increase in new leads.

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FINAL THOUGHTS

To help companies make this leap, our model approaches organizations as a macrocosm of the individual: having a collective DNA, Body, Mind and Soul. This model overcomes cultural roadblocks, making it easier for companies to manage the complex changes required.

As each aspect of the business is swept into the transformation strategy, companies don’t just improve. They evolve. They increase relevance and reputation. And they achieve uncommon growth.

Contact us to learn how Prophet’s global, multi-disciplinary teams bring bold ideas and rigor that deliver growth through our breakthrough human-centered transformation model.

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3 Ways We’re Creating a Supportive Workplace for Women

To foster leadership and prevent burnout, Prophet keeps exploring new ways to lift women up.

It’s been a tough year for many women. The pandemic exposed how much support working women can use–and how shockingly little most receive. COVID-19 has sparked a “she-cession,” driving nearly three million women out of the labor force. And roughly one in four are considering quitting or downshifting. Even those dedicated to staying at work are paying the price. A new Stanford University study found that endless Zoom calls amplify longstanding gender dynamics and drive fatigue and exhaustion for women.

This situation has led to Prophet renewing its commitment to elevating women’s voices and finding new ways to build allyship with our colleagues, clients and communities. And we have reexamined what it means to support women at the firm.

Prophet Initiatives to Better Support Women

Over the past year, we’ve made several moves to provide better support to the women of Prophet. From fueling open discussions about the pandemic and social unrest to welcoming honesty and vulnerability – we’re creating a workplace where women can feel supported while reckoning with the emotional intensity of these events. Ways we’ve advanced our cause in the past year include:

Finding Flexible Forums

For decades, women have struggled to elevate their voices in large meetings. Video calls can make being heard even more difficult as it is hard to read body language and easy for users to get lost in the sea of squares. We’ve acknowledged this reality and have encouraged teams to take “pauses,” moments for women to speak, weigh-in, and have their voices heard.

We’ve established new virtual forums. Our weekly firm-wide “Pulse calls” bring our global community together, while smaller breakouts allow the space for everyone to share and contribute their thoughts. We’ve introduced one-on-one meetings through our Women in Leadership Mentorship network and small-group sessions to discuss and share around specific events, such as the recent targeted murders of Asian women in Atlanta.

Building Better Boundaries

Workplace disruption related to COVID-19 has created a burnout problem. A CNBC survey found that 65% of women believe work stress has worsened and more than half feel burned out. Lean In’s research shows women feel this exhaustion at up to twice the level as men.

As remote work blurs the lines between our professional and personal worlds, Prophet’s leadership team has tried to help build boundaries between the two. These are some of the ways we’ve offered support:

  • For the last several months, Prophet’s offices have closed on the last Friday of the month to provide employees with a dedicated time to rest, recharge and take a break – without having to return to a full inbox of items to respond to.
  • We’ve offered benefits that provide meaningful relief to parents, including a dependent care assistance program for households with children ages 0-13.
  • We’re improving parenting-specific policies, including offering more paid leave for parents.
  • And we’ve invited health and wellness experts to speak to our people on topics from setting boundaries to managing the challenges of remote education.

Unleashing Shared Passions

Despite spending the year physically apart, we’ve seen a surge in community building. Propheteers have demonstrated their care for listening, learning, and taking action through their participation as a member or ally to the firm’s employee resource groups like Women in Leadership, Pride at Prophet, Black@Prophet and Latinos at Prophet.

These groups have allowed our people to speak up and share what’s on their minds (both personally and professionally), educate peers on topics of passion, and reflect on recent events in the news. And these communities have created opportunities for associates at all levels to take on leadership roles and elevate their voices.

“We’re creating a workplace that women can feel supported while reckoning with the emotional intensity of these events.”

Some of these topics and discussions can be heavy, so we’ve looked for ways to brighten our days too. We started our first-ever Music League, which connects Propheteers through a shared passion for music, specifically the tracks that celebrate the different identities that make up our firm. For example, over Black History Month in February and Women’s History Month in March, Propheteers around the world submitted their favorite songs to playlists like “All the Singing Ladies,” “Motown Classics,” “Songs from Women (Or About Women) Who Shaped Our World,” which highlighted female artists who’ve made a substantial impact on the music industry.

FINAL THOUGHTS

Every woman is different, and no singular initiative will fit the needs of all female team members. We’ve learned this year that nuance is important. Each facet of our identities–race, class, education, religion, sexuality and parenthood–impacts how we show up for one another. More than ever, we need to acknowledge that.

While we know we have more work to do, we are proud of these steps we’ve taken toward a more equitable Prophet. We will continue to find more ways to elevate women’s voices and serve as true allies. We’re elevating women’s voices. We’re listening to what they have to say. We’re pushing back against broad-stroke assumptions. And we’re finding new ways to support one another in challenging times.

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Why Leaders Should Turn to Historically Feminine-Coded Traits

Trust, compassion and the ability to collaborate used to be dismissed as weakness. We need them more than ever.

In the last year, between a renewed focus on racial injustice and the reality of a global pandemic, we have been challenged on our perspectives of ‘business as usual’ – including what we consider great leadership. We believe this is an opportunity to embrace – and prove – that a different way of leading is here to stay and we’re better off for it.

It is well-documented that we perceive leadership traits to be either more masculine-coded or more feminine-coded. For example, we associate being collaborative, cooperative or nurturing as feminine-coded, while being analytic, authoritative or ambitious is more masculine-coded. This “coding” has led to bias that has not historically supported women advancing in leadership. Amongst other things, this is because traits that are more traditionally feminine-coded, while seen as advantageous, are viewed to be “bonus” or “plus-ups” for leaders, versus being the core attributes required for success.

“In times of crisis, we look to our leaders for trust, compassion and collaboration— leadership dimensions that are all feminine coded.”

Enter the era of COVID, where we suddenly saw traditional models of leadership upended. The pandemic environment is highlighting the tremendous, and even mission-critical, benefit that more feminine-coded traits bring to the table. In times of crisis, we look to our leaders for trust, compassion and collaboration— leadership dimensions that are all feminine coded. (For more on this, there are many research studies to be found, but here and here are a couple of notable ones).

This might be why we have seen so many articles with titles like “Why Do Women Make Such Good Leaders During COVID-19?” But closer inspection shows us that it’s not just female leaders, it’s all leaders—regardless of gender—that are finding success in the current pandemic by exhibiting these historically feminine-coded traits.

No matter our gender identification, we can, and should, all lean into these more historically feminine-coded traits to have a critical impact. We see examples of this all around us right now, and they offer blueprints for better, more effective leadership:

Trust

Driving trust through transparency and focusing on facts have already been critical to strong leadership. However, a demonstrated comfort with uncertainty is one dimension of trust that has revealed itself at this moment. Gone are the days of defining leaders by their total certainty in what’s to come—vulnerability might, in fact, be the new marker of confidence.  From German Chancellor Angela Merkel’s science-led explanations (that still acknowledge what’s unknown) to New Zealand Prime Minister Jacinda Ardern’s plainspoken Facebook briefings to San Francisco Mayor London Breed’s calm, early response, we find enormous comfort in a focus on known facts with a transparent acknowledgment of what we don’t know.

Compassion

During an election season filled with pain and uncertainty, President Joe Biden and First Lady Jill Biden showed compassion and empathy at each turning point. They found ways to connect with voters over a shared sense of loss rather than just focusing on what the Biden administration would do if elected. And by speaking so candidly about their tragedies, Biden was able to impact compassion, empathy and resilience as a human first,  and as a leader second.  Regardless of what political affiliation, he created a level of connection through this in a way perhaps historically “strong” leaders may not have and gave a sense of hope from the top-down.

Collaboration

Our historical views of a strong leader probably more often emphasized being a lone warrior, but it’s a willingness to listen to many different voices and to bring teams into decision-making that is providing comfort and calm in this environment of unknowns. Synchrony CEO Margaret Keene (long known for her inclusiveness) has explicitly noted how leaders must solicit and listen to many voices to successfully navigate the crisis. You can see her doing this, looking to external expertise to inspire and support her bold decision making, bringing in outside mental health support for employees and holding weekly company-wide calls with an infectious disease expert. She’s both leading the way and working with others to do so.

Airbnb CEO Brian Chesky has been commended on the company’s handling of their recent layoffs. And in it, we can see elements of all of the above. He provides the facts about what went into the decision-making, and also, the unknowns remaining. He demonstrates empathy for his team and the pain this situation brings. And he builds and strengthens his community, calling on everyone to work together to support the exiting employees. He is leaning into all of these more feminine-coded traits to be a strong leader.

FINAL THOUGHTS

With all of the terrible things COVID has wrought, we also see many good things happening— clearer skies, an increase in kindness and the rapid digital transformation of businesses. We can only hope this revelation will be one such advancement: that our template for leadership becomes a more balanced aspiration, one that women and men alike can see themselves achieving.

As leaders at Prophet, we’ve been actively working to embed all of these traits into the way in which we work with our team. Have we done everything right? Probably not. But we’d like to believe that we, too, are making progress in learning the type of leadership skills and styles that will not only help us wade through the current crisis but make Prophet come out stronger on the other side. We hope all of you are doing the same, challenging traditional views of how we work together and finding ways to embrace a new, more inclusive normal.

At Prophet, we work with leaders across industries who are transforming businesses and growing their leadership skills to meet a new world. We believe that many voices and perspectives strengthen our work and the work of our clients, and we work internally and externally to advance inclusivity in leadership. If you have thoughts, comments, or questions related to these topics, please get in touch.

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M&A: Maximizing Value in a Post-Pandemic Economy

The right deals don’t just boost revenue. By clarifying purpose, they increase value.

The global M&A market is blazing hot across every major sector. Just look at the headlines announcing a pending deal between Amazon and MGM. And before that, the big news was AT&T’s deal with Discovery Inc. With deal volume rapidly approaching $2 trillion in just the first half of 2021, that’s more deal activity than any corresponding period on record, according to Bloomberg. And there are signs the party is just getting started. With vaccinations trending upward, stimulus flowing in, borrowing costs at record low rates, corporate coffers awash in cash and global economies shifting into a new gear, companies are feeling more bullish about taking big bets on the future.

Many of these recent deals are substantial. The AT&T announcement to merge Warner Media business with Discovery Inc for $43 BN, joins a roster of other major deals such as S&P Global’s $44.5 BN purchase of IHS Markit and Canadian Pacific Railway’s $25 BN purchase of Kansas City Southern. These corporations are rightly looking to acquire new capabilities and access new business models that can help them adapt and grow effectively in a post-Covid world. With M&A deals likely to hit an all-time high in 2021, here are three things business leaders can do to maximize the value of post-pandemic deals:

1. Sharpen the Value Proposition

The pandemic reset customer behaviors and expectations, both globally and across categories. Companies that invested in digital customer engagement and agile operating models were able to pivot in order to address rapidly shifting customer needs and new, often virtual use cases. As the world emerges from lockdown, the needs and behaviors during the pandemic will combine with pre-pandemic use cases to shift market requirements, once again, into post-pandemic need states.

Shifting customer needs demand refreshed value propositions, which accelerating M&A activity seeks to address. Smart players will use M&A to not only acquire capabilities required to compete in post-pandemic markets but will push their organizations to refresh their comprehensive value proposition including – product, service promise, customer experience and branding.

Example: When Danaher acquired the life sciences assets of GE Health, it retooled the value proposition of that business. In creating a new operating company called Cytiva, Danaher brought a sharpened, stronger value proposition to its biopharma and research customers through a comprehensive product portfolio that dramatically and demonstrably accelerates the discovery-to-development-to production lifecycle of biopharmaceuticals.

2. Expand the Revenue Platform

Platform businesses have attractive revenue dynamics — cross-selling and customer penetration, low customer acquisition costs, the ability to extract first-party customer data and switching barriers that get higher as customers go deeper into the platform. Smart M&A uses acquisitions to not only acquire new capabilities, solutions or customers, it also actively adds and recombines to strengthen platform dynamics.

Example: When Cigna purchased Express Scripts (the largest single deal in 2018), it acquired ESI’s significant PBM and pharmacy assets. Last year, Cigna combined the ESI business with several legacy Cigna capabilities to create Evernorth, a robust health services platform with significant data assets. In combining and reconfiguring assets into Evernorth, Cigna is driving platform revenue dynamics through data-enabled solutions that draw from capabilities across the platform, and drive higher clinical outcomes while lowering costs, what the company calls “the value of integration.”

3. Clarify Purpose for Employees and Customers

Big deals can ratchet up expectations externally and raise anxiety internally. Post-Covid deals are likely to have an even more unsettling effect on the employees needed to power deal success. Office workers have endured a roller coaster year of change. After adapting to work from home, they face another round of seismic changes as re-entry begins and companies call them back into the office. Priorities for these workers have shifted during the pandemic and so has their status quo. Time with family is more precious, commuting is optional and office culture has gone online.

So, when asking employees to undertake a post-merger integration, there better be something meaningful to come back for. Companies undergoing a mega-merger should use this moment to clarify their purpose to the market and to employees. A 2019 Cone/Porter Novelli study found that purpose can drive real business impact, with 86% of respondents claiming that they were more likely to purchase purpose-driven brands and 79% claiming to be more loyal over time. Purpose also drives higher rates of retention, productivity and happiness at work among employees according to a 2017 Great Places to Work study.

Example: When CVS merged with Aetna, the newly combined entity promised to create a new data-driven healthcare model that’s more personal, more convenient and more tailored to individual patients than ever before. They’ve since continued to make good on their purpose to help people on their path to better health by creating a rolling thunder of moves aligned to their purpose and setting clear ESG targets for 2030 and holding themselves to account. Since the deal was announced in 2017 and closed in 2018, CVS Health has shown steady year-over-year revenue growth.

“These corporations are rightly looking to acquire new capabilities and access new business models that can help them adapt and grow effectively in a post-Covid world.”

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FINAL THOUGHTS

It’s clear that as the pandemic recedes and companies look to build new capabilities to meet changing customer demands, the M&A market is just heating up. In order to capture the full value of these deals, it’s critical to understand the lasting implications of a post-Covid world and be ready to take the necessary steps of defining a clear value proposition that stakeholders can easily understand and relate to, strengthening existing platforms to deliver more value – not just building new ones – and finally establishing and living up to a purpose in an authentic way.

Going through a M&A? Contact us today to learn more about how we help our clients power growth after a merger.

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Converting Anti-Vaxxers: The Power of Fear & Stories

Evidence is mounting that even entrenched positions can be changed with the right appeal.

The country’s economic and social well-being, as well as the mental health and lifestyle of its people, is dependent on cooperation from those who are skeptical of or refuse vaccination. And that cooperation is being withheld by many people. In a recent Kaiser Family Foundation survey, 17% have a wait-and-see approach and another 20% say they will never have the vaccine unless required. An NPR/Marist poll found 25% would refuse the coronavirus vaccine and another 5% are “undecided.” According to these statistics, around 20% of the population is made up of committed anti-vaxxers. Current projections indicate that herd immunity may not happen, and that would be a disaster—unless some of these people get motivated to change their minds. So, what should be done? 

Those that are reluctant or undecided may be influenced by the right medical authorities, such as the family doctor or the hospital consortium led by Mayo Clinic and Cleveland Hospital who can reassure them the vaccine is safe. Other reluctant individuals may be open to incentives. A $100 reward for vaccination has been shown to work on some. Still, others admit that their opposition will only be affected by needing a vaccine to gain admission to activities, such as going to work, traveling or attending a sporting event. The Ad Council’s “It’s Up To You” campaign highlights the “treasured moments” that will be missed and has tested well. But these efforts will still leave many of the people on the sidelines and will not impact those fixated on not vaccinating. 

Some leaders have made the judgment that the committed anti-vaxxers, those who have hardened views based in part on political, religious or ethnic views, are a “lost cause.” In my view, that position is misguided for two reasons. First, however difficult, it is crucial to convert at least a part of this group (and more of the skeptical whose reluctance persists), because achieving herd immunity may depend on it. Second, there is evidence that entrenched positions can be changed with the right appeal. We do know that framing the discussion around safety, incentives or lost special moments will not be effective enough. Research on similar contexts has shown that it will only elicit coping strategies. They will ignore, distort, forget, counterargue and actually be reminded of why they oppose vaccination in the first place. But what can work is framing messaging around tragic coronavirus outcomes using powerful first-hand stories.    

Vivid Stories of Death and Long COVID-19 Suffering Can Work

The role model is the “Stop Cigarette Smoking” experience campaigns. The government and other institutions challenged long-term smoking habits with campaigns that featured highly emotional personal stories about people struggling with smoking-related health issues, including cancer, gum disease, premature birth and stroke. The stories, often graphic, showed suffering people who told of or implied how regretful they were about cigarette use—some when the end was clearly near. Studies showed they were effective. For example, the CDC ran two short bursts of anti-cigarette advertising in 2012 and 2014. By 2016, over 400,000 people had quit smoking for good and millions more attempted to stop. In contrast, arguing whether smoking caused lung cancer or other diseases was not effective. The fear appeal worked then, and it can work again.   

“The effort needs to involve vivid, emotional, personal stories that dramatically show the unbearable grief over a virus-caused death or the destructive effects of lingering symptoms.”

The urgent task at hand is to create a communication effort that reframes the discussion around the “long COVID-19” outcomes that degrade or destroy life, outcomes that can be prevented by vaccination. And communicate the messages relentlessly. Watching from a distance as a beloved family member takes their last breath. Seeing a real person living with debilitating long-haul COVID-19 effects, such as the lack of energy to even function, brain fog, dizziness, memory issues, breathing problems, the loss of taste and smell, or the need for a lung transplant. That is the frame in which those opposing vaccination will become uncomfortable and a change in beliefs or behavior will become possible.   

The effort needs to involve vivid, emotional, personal stories that dramatically show the unbearable grief over a virus-caused death or the destructive effects of lingering symptoms. Stories are powerful. An enormous body of research shows that involving stories attract attention, distract from counterarguing, are more memorable, and are much more likely to persuade than facts and logic.  

Facts can still be presented, but they need to be motivated by or embedded in a story to penetrate and make a difference. For example, a vivid story featuring a person living with long-term COVID-19 effects compounded by the fact that 500,000 people in the U.K. are sharing that fate will be processed, whereas, without the story, it would fall on deaf ears. Such facts or logic by themselves just will not breakthrough. 

These stories need to be part of a professionally produced communication effort that is strategically targeted and given enough time, enough stories and adequate resources to complete the job. Repetition and story variety will be needed for the campaign to maintain energy and create a change in mindsets. Powerful videos that are graphic, emotional, personal and memorable with visible and credible spokespeople telling their personal stories will be effective in part by gaining exposure through news, commentaries and interviews on various media platforms.  

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FINAL THOUGHTS

The best way to convince the inconvincible is to leverage storytelling as a mechanism to connect emotionally, attract attention, distract from counterarguing, and ultimately change the hearts and minds of enough of the anti-vaxxers to make a difference. If the media, government and consumer brands lean into the storytelling to push the pro-vaccination message, we will see greater majorities scheduling vaccine appointments. It can work, but we must act now.  

If you are interested in further discussing this topic or know someone who can help make this change at the national level, please email me at daaker@prophet.com, or please pass this message along to anyone who can help influence anti-vaxxers. 

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Webinar Replay: B2B Leaders Series feat. Randstad & Boston Medical Center

B2B leaders discuss the challenges of building the right culture and systems for digital transformation.

59 min

Watch the webinar replay in which you’ll learn about the challenges that B2B organizations face in undertaking transformation on a large scale and how they address them. The discussion features Rene Steenvoorden, Chief Digital Officer, Randstad, Heather Thiltgen, President, Boston Medical Center/WellSence Health Plan, and Fred Geyer, Senior Partner at Prophet, who were interviewed by Joerg Niessing, Senior Affiliate Marketing Professor at INSEAD.

Two of the participants, Fred Geyer and Joerg Niessing, co-authored ‘The Definitive Guide to B2B Digital Transformation’. Get your copy of the book here.

If you have any questions or would like to learn how our Marketing & Sales practice helps clients identify a clearer path to a digital transformation that powers growth with real and measurable results, contact us today.

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The Insurance Customer of the Future: Welcome to 2030

Take a closer look at the broad demographic, social, economic and tech trends that will define the next decade.

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Meet Jamie, the insurance customer of 2030. What will it take to win her business?

The Insurance Customer of the Future report is the latest research from Prophet’s Financial Services practice. It explains how insurers can drive growth by putting their customers at the center of their transformation strategies. The first step? Understanding their customers on a deeper level. Not only understanding who they are, what they value and what they need in the present, but also several years down the line.

Prophet’s experts centered their research around Jamie, an insurance customer living in 2030. By understanding and anticipating the generational trends and technological possibilities that will shape Jamie’s environment, insurers can make the right transformation moves now to win Jamie’s – and her peers – business in the future.

Read this report to gain deeper insights on:

  • The digital transformation trajectory of the insurance industry and its implications for business leaders
  • The broad demographic, social, economic and technology trends that will define the decade ahead for insurers and their customers
  • The evolving consumer demands that will shape the future of insurance
  • The ways insurers need to transform their businesses to win in the “new world”

Download the full report.

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Your Digital Maturity Is the Best Way to Evaluate Technology Vendors

Our research shows that it’s time for a maturity-based approach to technology development and selection.

One of the biggest challenges for organizations pursuing digital transformation is parsing through the myriad of digital solutions available. For example, I’ve been diving into the world of customer data platforms (CDPs) for the past few weeks and it’s a dizzying array of jargon and solutions. 

One approach is to reference the technology evaluations from analyst firms like Gartner’s Magic Quadrant and Forrester’s Wave — but those are already several years old. There are also several peer-based evaluation and review sites like Capterra, Gartner’s PeerInsights, Trust Radius, which can be filtered by reviews from by company size, industry, and region in some cases. 

But I think they all miss one major factor when it comes to selecting technology — digital maturity. Our research at Altimeter found that digital maturity drove substantial differences in not only the strategic objectives and initiatives of digital transformation but also in technology priorities. And yet, the element of digital maturity rarely factors into the selection process or shows up in the marketing of these solutions. 

“Digital maturity drove substantial differences in not only the strategic objectives and initiatives of digital transformation but also in technology priorities.”

What’s missing is a maturity-based approach to technology development and selection. Organizations can be better prepared to discuss their needs by understanding their digital maturity and knowing how they will evolve their technology stacks over time. And vendors could clear out much of the confusion in the marketplace by making clear not just how they help organizations but where and when they best do this throughout the transformation journey. 

In this post, I’ll review how digital maturity impacts digital transformation and provide specific recommendations for both organizations and technology vendors. 

Digital Maturity’s Impact on Digital Transformation Strategy

Let’s take a deeper dive into how digital maturity impacts technology selection. In our State of Digital Transformation 2020 report, we identified five stages of digital maturity relevant to digital transformation (see Figure 1). Most organizations are at Stage 3, focused on the digital transformation specific departments and hoping to move to Stage 4 where they start to knit and integrate across department silos.  

Figure 1: The Five Stages of Digital Transformation Maturity

We also found that the top initiatives differed substantially depending on maturity levels. For example, organizations in Stage 4 prioritize modernizing IT at substantially higher levels (55%) than other organizations because of their focus on updating legacy platforms for better integration across the enterprise (see Figure 2). 

In contrast, Stage 1 and Stage 2 organizations prioritize operational ability (41% and 32% respectively), especially around updating policies and processes. And organizations at Stage 5 of digital maturity indicate that accelerating innovation (39%) and integrating customer touchpoints (39%) are among their top initiatives because they’ve already done the heavy lifting of digitizing and integrating their operations. 

Figure 2: The Top Five Digital Transformation Initiatives by Digital Maturity Stage

Given that digital transformation initiatives differ by digital maturity, the technology priorities also vary significantly depending on maturity. More advanced in their usage of and reliance upon data, Stage 5 organizations are more likely to focus their investments on technologies that support cohesive, data-enabled initiatives — such as machine learning/artificial intelligence, cybersecurity, and 5G to (see Figure 3). But differentiation based on AI/ML or conversational technologies will matter less to organizations in earlier stages of maturity as they are still getting their data backends in order.

Figure 3: The Top Technology Investment Priorities for 2020 by Maturity Stage

What It Means

If you’re an organization going through digital transformation: 

  • Assess your digital maturity. Know where you are starting and very importantly, align across your department and organization on where you are. To get started, take Altimeter’s Digital Maturity Assessment and benchmark it against the other 628 companies we surveyed. 
  • Audit your strategy and roadmap. Once you know the stage of your digital maturity, examine your digital transformation strategy, especially the focus and sequencing of initiatives. How long will you need to wait for more departments to reach a critical level of digital maturity before moving forward with integration plans? Where are you missing critical capabilities? And timing is everything. Layout how major initiatives unfold over the next 18-36 months by quarters to ensure that everyone understands the roadmap. 
  • Begin conversations with vendors differently. Instead of asking what they do, explain your roadmap so that they understand where you are today and where you are heading. Favor vendors who understand how to support your initiatives as your maturity and needs change. If the vendor doesn’t acknowledge or address your digital maturity stage, then walk away and quickly. Statements like “We serve every stage!” or “We can evolve with you!” reveal that they haven’t done the heavy lifting of truly understanding how you will evolve. Instead,  
  • Resist the urge to buy technology ahead of when you are ready to use it. It’s tempting to invest in the “best” technology platforms, especially when they offer features like real-time personalization or AI-driven predictive analytics. But if your organization lacks the expertise and procedures to use these amazing features, you’ll be paying for wasted capabilities. Worst case, the platform is so complicated that few people end up using it. The alternative is to use a less sophisticated platform but one that is right-sized for your needs for the next 6-18 months. While platform vendors will raise the specter of switching and integration costs in the future, trade off the opportunity costs of slower and lower adoption rates.

For technology vendors, there are three ways to better address the evolving digital transformation needs of organizations: 

  • Focus solutions on specific stages of their transformation journey. Resist the urge to say that your solution serves everyone and instead demonstrate you understand the priorities and needs at each stage of the journey. Instead of pitching AI and personalization features to Stage 1 and Stage 2 organizations, explain how dashboards deliver relevant KPIs to key executives. 
  • Highlight which stage you serve best. While it’s tempting to want to serve every company at every stage, you know where your sweet spot is. Put a big, bright spotlight on how you understand and address the needs of organizations at that maturity stage — and then explain why you can also support them going on to the next stage. 
  • Partner with vendors whose strengths complement yours. Knowing that you don’t serve all stages well will free you to find and partner with vendors who complement your offerings. Go beyond having APIs to craft deep integrations in marketing, sales, and service to develop go-to-market strategies. Make it easy to upgrade the technology stack and conversely, partner with someone who specializes in support organizations earlier in their transformation journey. 

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Taking digital maturity into account in your digital transformation strategy is crucial to your success. If you’d like to learn more about how Altimeter and Prophet can support you in assessing your digital maturity, updating your digital transformation strategy, or creating a technology roadmap, please connect with us.

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Art of the Brand

42 min

In the Art of the Possible podcast, Peter Dixon discusses how his journey from an engineer to Chief Creative Officer helped him discover the importance of branding through art. By using the art of the possible, companies can create meaningful customer experiences.

Listen here to learn how brands can use the art of the possible to create meaningful customer experiences.

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Branded Customer Experience: Three Steps to Higher Impact

The right positioning, experience principles and design parameters reinforce what is unique about your brand.

Companies have become hyper-focused on delivering frictionless customer experiences, often stripped down to the simplest elements, that brand identity has become an afterthought. With many brands using the same technology platforms and focused on the same goals of “ease” and “speed,” the experiences often begin to fade into a sea of sameness. Too often, the three clicks customers used to book a luxurious escape to a high-end resort, feels exactly the same as that of an overnight at a roadside motel.

Branded experiences remind consumers why they prefer some brands over others and reinforce unique company positioning while encouraging ongoing brand loyalty. Yes, they should be streamlined and seamless. But simple doesn’t have to mean bland. When everyone is offering speed and convenience, companies must find ways to be memorable. That’s because each customer experience, no matter what channel, is a valuable chance to gain relevance. When businesses offer experiences that feel generic, they miss opportunities to deepen connections with customers.

“Simple doesn’t have to mean bland.”

Some companies excel. No one thinks of Costco as just another supermarket – they remember all the times an enthusiastic employee has offered them a tasty free sample or satisfied their cranky toddler with a $1.50 hot dog. And who doesn’t love the way Disney’s magic band allows beloved park characters to know your child’s name without asking?

But when experiences are off-brand, they are destructive. Ask anyone who has recently flown an airline that promised safety but then crams passengers together or has shopped a fitness brand that focuses on self-care but shames larger body sizes.

Critical Connections for High-Impact Experiences

When companies produce unremarkable customer experiences, we typically find the same cause: marketing, product and experience don’t come together early enough. Instead, each group works in their individual silo and by the time they meet to “collaborate,” they’re already entrenched in less-than-ideal solutions. While all three teams are focused on customers, the internal dynamics need to align to provide more clarity on the role each plays.

To be effective, companies need to spell out:

Brand positioning: The brand strategy is the foundation of customer experience. It is what encircles every aspect of how customers meet your brand. Brand positioning delineates a brand’s purpose, promise and principles and should be internalized by employees and resonate with customers.

Experience principles: Overseen by the experience team, these carefully developed standards explain how a company delivers its brand through user experiences and categories of interactions. Experience principles are inspired by brand principles and act as a filter for what differentiates the branded customer experience from its competitors. They guide the team as they develop experience concepts and signature brand moments.

Design parameters: These are the nitty-gritty details that ensure experiences are both helpful to customers and offer genuine moments of brand connection. They guide audience-specific touchpoints, such as products, channels and service. They reflect the brand and experience at the most precise moments, like when a Chick-Fil-A employee says, “My pleasure” instead of “You’re welcome.”

These three components make up the tenets of success. When teams use them to develop projects they are no longer just functional moments —they become branded building blocks that drive emotional responses from consumers. Each parameter clicks into a growing universe of interactions, deliberately reinforcing the brand’s relevance in people’s lives.

3 Tenets of Branded Experience Design

The Three-Step Secret to Powerful Customer Experiences

There are three moves organizations can make to immediately enrich customer experiences.

Come to a High-Level Agreement on the Value of Branded Experiences: Once companies understand that these are a critical component of brand relevance, it’s easier to break down silos. Organizations can avoid tensions and increase productivity when their goal — to create memorable moments of engagement — is aligned from the beginning.

Infuse Brand Strategy in Each Step: It’s important to make the distinction that brand is not more valuable than customer experience. Though brand positioning should be considered at every level of decision-making, encouraging brand police is also not the answer. To do this, the brand team must work harder to distill and communicate a positioning strategy that is most helpful to the experience and product teams. They should also check in with one another early and often, to make sure brand identity isn’t compromised.

Prioritize the Branded Moments That Matter Most: In an ideal world, there would be enough time and money to make every touchpoint perfect. But for most companies, certain moments matter more. Using the experience principles and journey maps will illuminate areas where your brand can best delight customers and differentiate itself from that sea of sameness.

By identifying these areas, teams can focus on what we call signature moments. Signature moments are proof points for customers, embodying the brand’s promise. They aim to elicit specific, positive emotions that relate to the brand’s positioning. Signature moments deepen the relationship with customers, reminding them of what the brand stands for and why they’ve made the right choice. Whether it’s Spotify’s Year in Review, Nike’s self-driven in-store digital exploration or BMW’s driver experiences (including on-ice training in Austria), these connect with customers in ways that are much larger than a single transaction.

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Companies need to bring brand, product and experience teams together early on to create branded customer experiences that stand out in a sea of sameness. Not only does early collaboration result in powerful signature moments, but it also paves the way for a smoother experience evolution as market needs and consumer expectations remain ever-changing.

Looking for ways to help your organization create branded customer experiences that lead to growth? Contact our team today.

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To Transform Digital Selling, Must Sales & Marketing Converge?

Despite historical differences, sales and marketing teams now see that more collaboration equals more revenue.

In our 2020 State of Digital Selling global research report, we found a consistent theme: the more in sync sales and marketing was, the better the outcome for sales, in terms of revenue, customer satisfaction and other metrics. That, and the tremendous growth of executives managing both functions—LinkedIn has identified the Chief Revenue Officer as the fastest-growing C-Suite role—has led to an emphasis on studying this convergence as part of my research on the digital transformation of sales. In this post, I’ll look at the impact of this convergence, which was discussed in my recent webinar with our research director, Omar Akhtar.

Convergence or Collaboration?

Convergence of sales and marketing today is embodied by the rise of new C-suite leaders, often with the Chief Revenue Officer (CRO) title, who manage both sales and marketing—often with a new combined Revenue Operations team supporting both. What is the line between convergence and collaboration? It’s undoubtedly possible for these teams to align and collaborate so well that they could appear converged and achieve the same benefits. A question my research will answer this year is: what points of convergence or collaboration are required to digitally transform sales?

Clearly, the trend is in favor of convergence as shown by research indicating the CRO title is the fastest growing in the C-suite. What benefits are CEOs seeking with convergence?

An important benefit was a clear finding in my recent report which found the high performance of Account-Based Marketing (ABM) and Account-Based Selling (ABS). One factor we evaluated was the type of digital sales model employed, in terms of scale as measured by the size of the deal, lead time and level of collaboration employed. Our research found that high-touch, high-value, long lead-time sales that rely on a well-coordinated team and unique sales planning with marketing paid off well. Top performers (represented in the purple bars in the chart below) follow this model, and it was even the most frequent model among average performers as well (shown by the index in blue).

The benefits of collaboration are high. Consider the enormous investment marketing teams have made in technology, data, and skills development. Much of that investment can be leveraged by sales to digitize selling. By sharing the same data, enablement tools and customer experience platforms, costs can be reduced, and effectiveness increased, as near-real-time decisions can be used to nurture leads and provide the intelligence needed to up-sell, cross-sell and re-sell.

Barriers Are Deep-Rooted

Too many times, sellers and marketers don’t see eye-to-eye. In a recent conversation with a marketing leader, we discussed whether this is a left-brain/right-brain issue: marketers being more analytical and sales being more relationship and instinct-driven. Yes, these are broad generalizations, but they hold in my experience too. This impacts trust. Sales’ digital transformation will rely on new levels of trust among sales teams for the data and tools they use to navigate digital selling. This trust is lacking among the average digital seller, but high among top performers. For example, when we asked sellers if they trusted marketing’s data, 61% reported that they don’t—they want their own.

Perhaps the most fundamental challenge is misaligned priorities. In our recent 2020 State of Digital Marketing report, we found that marketing deprioritized sales-focused efforts, such as creating more sales qualified leads to buyers, supporting sales team productivity and growing e-commerce.

“An equal partnership in the form of an executive steering committee—or through CRO convergence—can address these barriers.”

Building trust is essential to sales’ transformation: if, as I believe, sales needs marketing’s help to digitally transform, we must tackle cultural mindsets and increase alignment focus. It may not be easy for sales leaders to accept marketing’s help given the risk of marketing dominating sales’ digital transformation, at the expense of what makes sales different from marketing. An equal partnership in the form of an executive steering committee—or through CRO convergence—can address these barriers.

What It Means & What You Can Do

The place to start is to look at the key touchpoints between sales and marketing that represent hand-offs, which tend to be problematic. The table below shows what I believe to be those key areas and the relative digital maturity of marketing and sales. As you can see, marketing and sales are complementary:

Planning. Much of planning integration is solved when sales and marketing collaborate through ABM/ABS. I’ve spoken with one large manufacturing business that plans GTM strategy holistically: team members from marketing, sales and service create a strategy through carefully structured workshops, spanning up to 5 days together working as a team. This not only ensures alignment, but time together can bridge cultural barriers.

Content. The content touchpoint includes selling assets, like playbooks, scripts and content that nurture leads to conversion. This area is most often led by marketing, but I continue to hear sales complain about the content they’re asked to share: it may not be easily personalized for the buyer, or the seller may not know how to position it for the prospect’s unique needs. Often training is the heart of the issue, but part of the root cause is a misalignment in strategy and insights. Sales need to be much more involved in content strategy and learn the tools necessary to use and measure content effectiveness.

Lead Management. Best next moves during lead nurturing are important in digital selling, because of the near real-time response that must be coordinated between sales and marketing. For example, after a lead downloads a white paper provided by marketing, what shared customer intelligence signals the best next step for sales? I’m also questioning whether lead management belongs in a digitally transformed sales organization that can do its own prospecting. As sales become increasingly comfortable with automation and data, the definition of a “marketing qualified lead” and “sales qualified lead” will surely evolve.

Data. My digital sales research has shown that top performers align performance metrics between sales and marketing, such as customer satisfaction, revenue goals, etc. In fact, there was a 34% spread in digital selling maturity between the index and top performers when KPIs, incentives and compensation were aligned between teams. But I also found that sales don’t necessarily trust marketing’s data—which brings us back to the cultural issues that must be addressed. The solution is also found in last year’s 2020 State of Digital Selling report: top performers collaborate with marketing on both a data architecture and technology stack roadmap to keep aligned—much more so than the index of average performers.

Technology. Technology touchpoints are dual: internally, represented by sales and marketing enablement (e.g., CRM, SFA, etc.), and externally, customer-facing digital experiences, such as websites, apps and social media. Marketing is leading CX work today, but as sales become more digital, they need to be part of a highly collaborative process with marketing and service teams to create a seamless customer experience that crosses their functions.

Ongoing Teamwork. Customer experience worries for the sales team don’t stop after the sale. Some of the most integrated sales and marketing teams work within a growing part of the economy: Software as a Service or SaaS. For example, a salesperson who has sold a SaaS HR system needs to understand whether their customer is utilizing the system to its full potential. If the customer is underutilizing the system, they may have bought the wrong product; if they’re overutilizing the system, there’s an upsell opportunity. Even if your product isn’t SaaS-oriented, it helps a lot to think of it that way by demanding marketing and service customer insights that may guide your sales strategy for an account.

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Brand Relevance Index® Spotlight: Amy’s Kitchen

Why fans love Amy’s powerful and clear purpose, consistent quality and commitment to yummy innovation.

In a year full of disruptions, the latest Prophet Brand Relevance Index® (BRI) reflects the many ways U.S. consumers changed their relationship with brands. Amy’s Kitchen is a stand-out example of the power of brand relevance: Last year it became so beloved on a national scale, that many consumers consider it to be more indispensable than larger names including Nintendo, Trader Joe’s and Tesla.

“When people craved healthy choices, honesty and companies that stood for something more, Amy’s soared, acing many components of our Index, allowing it to not only make our list for the first time but also land the #21 spot,” says Scott Davis, Prophet’s chief growth officer.

Prophet’s research measures how well brands perform on four key drivers of brand relevance. First, the brand must be customer-obsessed, demonstrating empathy and offering compelling solutions. Next, it must be ruthlessly pragmatic, showing up for consumers when and where it’s needed. Third, it is required to demonstrate that it is pervasively innovative, finding creative solutions to adapt to this disrupted environment. And finally, it needs to be distinctively inspired, with a brand purpose that connects to consumers in ways that are both current and meaningful.

Amy’s Kitchen didn’t develop this relevance by accident. Here’s how it keeps growing its hungry customer base.

Making People Happy

A good meal makes most people smile, and amid pandemic fears, it makes sense that Amy’s wholesome meals would score well. But its high marks on our “Makes me happy” attribute reflects far beyond its fantastic General Tso’s Bowl.

Amy’s is a feel-good brand, and it emphasizes its wholesome roots in many ways. The Petaluma, California-based company understands that customers intensely value where their food comes from, both in terms of organic sourcing of ingredients and the companies that put it all together. “We are still family-owned and have always been committed to quality organic and vegetarian ingredients,” says Andy Berliner, Amy’s Founder and CEO. “Because we are independent, we can put the needs of our consumers first, and focus on making a positive impact, without cutting corners along the way.”

But there’s a core yumminess factor too. In a year where comfort food meant so much more, Amy’s entrees – soups, burritos and that ever-popular Chili Mac –soothed people. Treating yourself to a quick and healthy single-serve meal became an important form of self-care.

Quality Customers Count on

One of Amy’s best scores came in “Lives up to its promises,” where it ranks within the Top 10.

Amy’s team isn’t surprised by that. It carefully cultivates consumer trust in its chief promise – to use high-quality organic ingredients that are responsibly sourced, and carefully prepared and cooked for best taste. Its consumers, who are environmentally aware, health-conscious, savvy label-readers reward the brand with loyalty and repeat purchases. And last year, Amy’s won over many new fans, as well, many of whom got a taste, enjoyed it so much, they continued to return for more.

“Amy’s is a company not just focused on the bottom line but using its business as force for good.”

The “promises” attribute falls under our umbrella of ruthless pragmatism. However, Amy’s also outperforms on two other attributes here: “Makes my life easier” and “Delivers a consistent experience.” While these have been true of the brand since its 1987 launch, it took on new importance over the last year. Stressed-out parents desperately needed all the convenience they could find. And during a time when nothing seemed reliable, a frozen pizza that consistently satisfied the whole family meant even more.

Cooking up New Ideas

Pervasive innovation is another brand relevance driver, and Amy’s excels here too.

Amy’s relies on constant experimentation and its new offers impact the way customers see the brand. Gluten-free, vegan and dairy-free options all reflect changing dietary preferences. And while it’s long been vegetarian, Amy’s food offerings took on new resonance as consumers sought out more plant-based options.

The pandemic taught the company a lot about its innovative muscle. As with many brands, supply chain issues became a problem, making it difficult to get products into freezer cases. And since Amy’s assembles many meals by hand rather than automation, social-distancing practices required an overhaul of production processes to find safe ways to stretch pizza dough and roll burritos in its kitchens.

Stand for Something Bigger

Finally, where Amy’s shines brightest is in its purpose, an attribute we measure as a brand’s ability to distinctively inspire. When ranked by “Has a set of beliefs and values that align with my own,” it earned the #6 spot, outscoring companies like Patagonia and LEGO.

Amy’s purpose, “to make it easy and enjoyable for everyone to eat well,” rings true to its customers and functions as the company’s North Star. “It is the lens we use for all our business decisions,” says Berliner.

Amy’s demonstrates that commitment by improving the accessibility and equitability of organic agriculture, and by making meals that cater to a variety of dietary needs and restrictions, like gluten-free, dairy-free and vegan. The company is also committed to decreasing food waste and improving operations to ultimately “heal the planet” through its business.

Consumers will soon recognize those values expressed even more explicitly. Amy’s just achieved coveted B Corp status, awarded only to companies following the highest social and environmental performance standards. The B Corp seal signifies to consumers that Amy’s is a company not just focused on the bottom line but using its business as a force for good.

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“It’s apparent that consumers are gravitating towards authentic, purpose-led brands more than ever,” says Davis. “As an early adapter, Amy’s Kitchen is truly built around a purpose that has defined its success for decades. Standing for something it believes in and staying true to its roots undoubtedly helped land it in this year’s Brand Relevance Index®. As Amy’s grows its loyal customer base, expect to see new and exciting things from this increasingly relevant brand.”

Get in touch today to learn more about how to build brand relevance to drive growth.

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