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Top Digital Transformation Challenges in Financial Services

Collaboration and personalization can help legacy firms outpace fintech upstarts.

When it comes to digital engagement, some of the biggest names in financial services still can’t seem to move fast enough.

While upstart brands like Cash App, Alipay, Monzo and Robinhood rack up millions of new customers, many legacy financial services companies are plodding along. There is progress, but many digital transformation initiatives are underperforming.

“Many digital transformation initiatives are underperforming.”

There’s no question that companies like Capital One and USAA are breaking new ground. But despite increased spending, many others are lagging behind – both in how they think about digital transformation strategy and how they execute it.

At Prophet, we wanted a better sense of what’s holding these companies back and how financial services compared to other industries. Our digital transformation research dug into the details of transformation, surveying 476 digital executives worldwide, including 150 who work in financial services.

One major finding? If efforts are uneven, it’s not necessarily because they’re underfunded. Digital marketing budgets in financial services now comprise between 50 and 70 percent of marketing resources. That’s up from a range of 20 to 40 percent in 2018. And while COVID-19 is causing some firms to cut spending as part of overall cost reductions, most execs recognize the need for more digital marketing in an increasingly virtual world.

The 2020 State of Digital Transformation research uncovers three key digital transformation challenges found in the financial services industry:

1. Missing Objectives

Financial services firms still focus on traditional marketing objectives, like increasing brand awareness or developing brand reputation. Those goals matter. But it often means that they pay less attention to higher-impact digital targets, such as adding customers (which ranks as the first priority across all industries) and increasing revenues from key customers and accounts (ranks as the second priority). And they lag even further behind financial disruptors, which use marketing to generate leads.

2. Gaps in Personalization

While almost half of the financial services respondents rank personalization as a top priority, the industry is lagging in delivering those experiences, something that is considered table stakes in other industries. While dynamic personalization is a key characteristic of digitally mature enterprises, less than half of financial services believe they can personalize at optimal levels. And 16 percent of firms don’t personalize at all across channels. There’s also a worrisome level of false confidence. Almost half do not use marketing technology (martech) platforms to scale personalization efforts, despite the general consensus that martech is needed to deliver optimal levels of personalization.

3. Lagging in Collaboration

Certainly, marketing teams at financial services companies understand that it’s essential to work closely with other business functions, especially sales. They know they need to continue to prioritize this cross-functional collaboration. In the context of demand generation and B2B2C marketing, this increased collaboration is crucial to ensuring a lead doesn’t get dropped and is ultimately converted. About three-quarters of financial services respondents plan to invest in cross-functional efforts going forward, indicating that plans are taking this collaboration need into account. While the mindset and plans for the future are good news, it’s still worth noting these efforts lag in practice. About two-thirds of respondents increased collaboration with sales over the last two years, compared with 75 percent of respondents in all industries. Almost a third of respondents actually cut back on collaboration.

The Underlying Challenges: Integration Struggles and Skill Shortages

There are two underlying areas to address that are critical to solving the above problems. First, financial services still struggle to integrate the technology they already have. Almost half of all financial services firms say they lack the budget and integration mechanisms for their technology, specifically the martech stack.

And second, finding and hiring the right talent is still difficult. More technical skills are central to digital marketing talent needs, especially data analysis, marketing automation and software expertise.

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As financial services firms look to improve and accelerate their transformation efforts, here are five ways to increase the pace of change:

  1. Use digital marketing to drive growth through generating leads and acquiring more customers, rather than simply building brand awareness.
    Integrate a marketing technology stack that enables personalization.
    Prioritize cross-functional collaboration between marketing and other departments, especially sales, for the greatest business impact.
    Focus on integrating martech into the existing technology stack by ensuring adequate budget and resourcing is in place.
    Develop recruiting strategies and revamped employee value propositions to fill talent gaps, especially in the ability to make existing martech solutions work better.

Is your business equipped to compete? Our expert Financial Services practice can help to devise a clear strategy to move your business forward in 2021 and beyond, get in touch today.

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Busting the Myth That B2B Companies Are Digital Laggards

We examined 26 criteria, and find B2B companies are holding their own.

New research shows B2B companies are on par with their B2C counterparts and should look to B2B digital leaders for best practices.

The online world is full of warnings that B2B companies have fallen behind B2C companies when it comes to digital transformation. However, our new report, The 2020 State of Digital Transformation in B2B, clearly shows that B2B companies are on par with their B2C counterparts across five stages of digital maturity. This work is based on a comparison of 170 B2B companies with 238 B2C organizations and 160 B2B2C firms based on a survey conducted by the industry analysts at Altimeter, a Prophet company.

Five Stages of Digital Maturity

Digital maturity was determined by evaluating the relative adoption of digital practices across twenty-six criteria grouped into five areas: Leadership and culture, customer experience, marketing and sales, technology and innovation, and data and artificial intelligence. To understand the impact of digital transformation maturity, we grouped all of the respondents into one of five transformation stages based on their maturity scores (see Figure 1). Click here to see a deeper exploration of digital maturity in the full report.

Figure 1: The 5 Stages of Digital Maturity

Sixty-nine percent of all companies (B2B, B2C and B2B2C) have moved past the initial stages of digital transformation maturity and are investing in digital technology and data to accelerate growth and improve productivity. Two-thirds of these more mature companies are in stage three where they are focused on operationalizing the use of platforms and data at scale and putting them to work to drive growth. The most mature companies, 25 percent of total respondents in stages four and five, are characterized by efforts in integrating operations to deliver more personalized experiences and using emerging technologies such as AI to redesign customer experiences and offer digital services to accelerate growth. Time is running out for the laggards in steps one and two while those companies in stage three must turn their efforts into impact so they can justify their investment and continue to accelerate progress.

Digital Maturity is a Better Predictor of Capabilities and Plans Than Customer Type

Our study revealed that stages of digital maturity are better predictors of digital capability building, investment in technologies or utilization of advanced digital platforms and data. Differences between B2B and B2C companies on a broad range of digital transformation plans and practices become small once responses are controlled for the level of digital maturity.

“The most mature is taking a more opportunistic approach compared to those who are still struggling to put in place basic digital capabilities.”

B2B2C companies are more likely to be more digitally mature (41% in stages 4 and 5) than either B2B or B2C companies; probably because they must build capabilities to address both business and consumer audiences.

Figure 2: Digital Maturity Levels by Business Type

Digital Maturity Matters

Organizations that are furthest down the path of digital transformation are best able to turn uncertainty into a competitive advantage. Their response to the pandemic is illustrative. The most mature are taking a more opportunistic approach compared to those who are still struggling to put in place basic digital capabilities. While eighty-two percent of stage one through four organizations are continuing or pivoting their transformation efforts, seventy percent of the most digitally mature companies are accelerating their digital transformation efforts (see Figure 3). They recognize that disruption is a time to step forward not back and have the confidence in their digital capabilities to capitalize on the situation.

Figure 3: Transformation Initiative Shifts Due to COVID-19

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B2B companies should shift their search for best practices from B2C companies to more digitally mature B2B companies.  It is easier and more effective to replicate best practices from one B2B company to another and maturity is a better predictor of outcomes than customer type. B2B companies who are digital laggards (stages 1 and 2) should look to the examples of companies that are operationalizing and scaling their digital efforts (stage 3). B2B companies can look to their more mature counterparts for insights into how to integrate, personalize and used advanced technologies to drive impact and become more digitally mature.

Want to know where your company stands on its digital transformation journey? Download the 2020 State of Digital Transformation in B2B to determine your next steps and contact us.

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DEI at Prophet: Making Progress on an Important Journey

We’re taking steps to learn more, do better and expand our definition of diversity.

For several years, Prophet has been working hard to strengthen our commitment to diversity and inclusion. Pride at Prophet, a group celebrating and building a community around our LGBTQ employees and allies, is flourishing. While we still have a lot to do, we’ve accomplished much with our Women in Leadership effort as our junior partner team became more gender-balanced. But as Black Lives Matter protests swept the globe in May last year, we knew we had to take a new–and harder– look at our own community, culture and practices.

As we absorbed what was happening around us, we closed firmwide for a Day of Reflection in mid-June and then listened to how each of us as team members at Prophet thought about how we can better reflect inclusive and diverse voices and embed them more deeply into our processes and our culture. Since June, we’ve continued these conversations as we’ve gone deeper into our DEI work at both the local and global firmwide levels.

“It’s about challenging ourselves to make sure every solution we create for ourselves and our clients–every brand strategy, every customer experience, every organizational analysis–moves toward a more just and open world.”

We also conducted a global firmwide DEI survey to better understand our current realities and perceptions and where we most needed to focus first. With broad engagement across offices, levels and functions, the survey gave us a detailed view of how we can further become truly diverse, equitable and inclusive. While we were moving in the right direction with the work done so far, we knew we had to do more.  We asked ourselves how we can better deliver on the promise of one of our values – to allow everyone to be “fearlessly human” creating the room, structures and space to bring their best selves to work every day.

So, we got to work. We made the effort more immersive and transparent. While a committed DEI Council continued to push on efforts, we aimed to make the dialogue and actions broader and more local – to fit the needs of each of our geographies. We started to push on existing processes where we can better embed the core principles of our DEI efforts.

We know that this is hard work and it is something that must be sustained. We want change to be meaningful and it is important to make this not just about hiring more people of color or donating money to a charity.  It’s about challenging ourselves to make sure every solution we create for ourselves and our clients–every brand strategy, every customer experience, every organizational analysis–moves toward a more just and open world.

In this context, we can share that we are focused on some key areas:

Increase Expertise

No one knows better than we do that the right consultants can change everything. Even though a super passionate internal team has headed our DEI efforts, we knew we could benefit from professionals with deep experience and fresh insights. We retained Collective, specialists in DEI consulting, to help.

Together, we’re looking at new and better ways to engage our people, support their development, and recognize their achievements. We expect to have a full report on its recommendations soon, and this audit will help further refine areas in which we can make progress.

We are also in the process of identifying and hiring a Head of DEI, who will be 100 percent dedicated to this vital work – a first of its kind at Prophet.

Enhancing Our Definition of Diversity

Including more diverse voices in our team has always been a goal, but we are stepping up those efforts. First, we’re working harder on campuses, adding historically black colleges and universities to our regular recruitment outreach. We are also partnering with the Consortium, a nonprofit that promotes inclusion among MBA students.

We launched senior-level searches to diversify the executive team and at the partner level. And we are actively interviewing candidates for our Board, with additional outreach underway.

Overall, as part of our recruiting process, we’ve made sure that at every level, across every role, we have a diverse slate of candidates.

Learn More, Do Better

Awareness is an essential part of this process, and during the fall, almost 90 percent of Prophet employees have completed microaggressions training to understand better the many ways bias can affect the Prophet community members. Importantly, this training also addresses what people can do about it–either when they make a mistake themselves or witness one.

From there, we are now beginning to deploy our next employee training focused on becoming better allies to our coworkers, with the aim to have everyone go through the training in Q1.

Support Racial Justice

In addition to our internal work, we are excited to be doing more to promote justice externally. In September, we also activated Prophet Impact (formerly P4NP – Prophet for Nonpofit) with a racial justice track that identified areas where we can do more pro-bono consulting with organizations dedicated to the fight for equality. Our intent is to make this ​a regular program rather than an opportunistic one, with clear budgets, goals and active management.

Measure Progress

All of this requires us to measure our progress and we all know metrics matter. The DEI survey we conducted has not only served to inform areas of focus but also to create a starting set of metrics for us to measure ourselves against. It probed four primary DEI dimensions–respect, belonging, evaluation/progression and commitment, and captured demographic information, now on our intranet, to track progress on representation. This data is feeding and informing our plan for the new year and beyond.

FINAL THOUGHTS

What to Expect Next

In the weeks and months ahead, we expect to do more and share more. Prophet has long been built on a commitment to “Many voices. One team.” We all have a strong desire to make this a holistic reality. We are excited to have a passionate team across the globe working together to make us a better firm – more inclusive and more diverse than ever.

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Brands Are Sitting Out the Super Bowl: Is This an Inflection Point for Marketers?

How companies are recalculating the complex math of advertising during the Big Game. It’s riskier than ever.

The Super Bowl LV is right around the corner. The Kansas City Chiefs will face the Tampa Bay Buccaneers and this year’s match-up is all about legacy vs. new. The duel of Tom Brady vs. Patrick Mahomes. Will Tom Brady be able to win another Super Bowl and retain his GOAT status? Or will the 25-year-old star outperform him on a national stage? It will be a fascinating game to watch.

Off the field, we also see the duel of legacy vs. new as we look at the much-ballyhooed ad spots surrounding the Super Bowl. Several legacy brands that traditionally bought ad spots are sitting out this year: Budweiser, Pepsi, Coke. While other brands like Chipotle, DoorDash and Indeed are willing to get in the game and spend $5M+ for 30 seconds of airtime. Even amidst the criticism against the NFL for their lackluster response to Black Lives Matter, the controversy of physical audiences during the pandemic and viewership ratings once again on the decline, the Super Bowl is still considered the quintessential placement for U.S. advertisers.

“The Super Bowl is still considered the quintessential placement for U.S. advertisers.”

In addition to navigating these ongoing challenges, this year’s Super Bowl also brings the duel of advertising on legacy television vs. digital video to a head. Brands are increasingly aware that coveted eyeballs are turning off the television while the reach and engagement on YouTube, Twitch and other digital platforms are becoming the new prestige play. CMOs today are seeing digital video advertising deliver results and brand awareness is also functioning as a direct response.

We believe this interesting match-up of legacy vs. new highlights 3 shifts in how CMOs decide where and how they invest their marketing dollars:

1. From Static to Dynamic

CMOs are increasingly under pressure to move the needle and do it fast. Their mandate has expanded from the top of the funnel down to acquiring customers. As a result, they are continuously experimenting with ways and channels to optimize the return of their marketing investment – often challenging practices that have been considered “tried and true.” For the first time in decades, Anheuser-Busch announced that the iconic Budweiser brand is sitting this Super Bowl out. We can still expect to see ads from BudLight and the first-ever corporate spot. Regardless, this still came as a big surprise to many.

2. From Reach to Relevance

The pandemic has shifted consumer behavior. Consumers have become more open to trying new brands – even new players – forcing brands to defend their positions. As a result, CMOs are changing their approach from maximizing reach to proactively finding ways to embed their brands in consumers’ lives. This year, for some consumers, the Super Bowl will not be as important as in prior years, given social distancing. Budweiser understands this and is reportedly reallocating its Super Bowl budget to a topic that is more relevant to its audience: COVID relief in the form of coronavirus vaccination awareness efforts.

3. From Opportunistic to Authentic

Shifting marketing strategy and execution depending on context or market conditions is not new. The best marketers have done it to raise the bar and set the standard on how to engage consumers (remember the “dunk in the dark” tweet from Oreo in 2013?). Today this is increasingly difficult as consumers expect and demand brands to be authentic. Consumers are quick to call out anything that looks and feels different or “off-brand.” With the ease and speed of social media, brands have to answer to their customers. It will be interesting to track how Budweiser executes on the COVID-19 efforts now and into the future from an authenticity perspective, at the risk of exposing the brand and hindering the return of their investments.

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Investing in a Super Bowl ad is a big decision for any marketer. Sometimes the decision is clear and compelling: by showing up to where consumers are, on the right platforms, in the right context and with authentic engagement, marketers have a better shot at maximizing the return of their investments.

But the case is not always clear and yet organizations continue to invest.  Why? The culture within organizations is slow to change. Successful marketers go beyond the data to focus on aligning the mindsets and behaviors of their organizations to ensure they make the right decisions, not the decisions that have “worked” in the past.  It’s a tall order.

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The Experience Revolution: Three Essential Innovation Trends

How equity-centered design, digital project management and profitable waste can spark brand-new concepts.

While 2020 may go down in history as among the most challenging years, it’s been a surprisingly encouraging time for those working in experience and innovation. As the pandemic pushed stuck-at-home people into an almost entirely digital world, they had time to think about bigger questions–like social justice and community impact.

Without their usual in-person channels, companies scrambled into new realms of inventiveness, often accomplishing difficult tasks in days and weeks. Braced by this crash course in risk-taking, many are emerging with clear eyes and new energy.

Amid so many changes, we believe three trends will shape the months ahead. Smart companies are already using them as a springboard to a stronger purpose and uncommon growth.

Equity-Centered Design Goes Mainstream

The intersection of social responsibility and design isn’t new. But between Black Lives Matter protests and stark inequities, CX and innovation strategists spent much of 2020 asking each other hard questions. As a result, organizations are taking a closer at how their work perpetuates (and possibly amplifies) the deepening of privilege in a world full of unequal access, opportunities and outcomes.

That means enlarging definitions of human-centered design by expanding to community-focused thinking. And it requires stepping beyond the usual approach of designing for an individual, persona or archetype, making decisions based on empathy and inclusion.

“By thinking beyond the “average” person, companies often find innovations that benefit everyone.”

We expect more companies to strive to design for fairness, especially as it becomes clear that doing so can lead to growth. Tapping into previously ignored markets, such as the disabled, non-English speakers and older consumers, are important avenues for new customers. Microsoft’s Seeing AI app, for instance, was developed by a designer who is blind, recognizes facial expressions, reads documents and more for people with visual limitations. But by thinking beyond the “average” person, companies often find innovations that benefit everyone. Those include easier-to-navigate digital experiences, better audio services and more accessible product design.

Certainly, these innovations can prevent legal troubles down the line. But the best design thinking includes equity from the very beginning, not as a late-in-the-game modification from the compliance department.

Led by organizations like the Creative Reaction Lab and the Stanford DSchool, more practitioners recognize that good experiences must reflect diversity, equity and inclusion at every level. Often, that means including inspirational stories of people who have been shut out in the past. Fairness serves the triple bottom line—profits, people and the planet.

Digital Project Management Grows Up

By now, businesses are well aware that digital projects need continuous management, led by a professional community of digital natives. But increasingly, companies are switching from a project management perspective to one of product management. The former are things a company makes. The latter are businesses that must be managed.

That means viewing them through the lens of finance, governed by profit and loss. Companies like Google have always done this. But increasingly, legacy brands, including CapitalOne, are waking up to the reality that these digital efforts are core to an organization’s value chain. This isn’t a fad. It’s a fundamental way of organizing. Rather than evaluating their work as engineering projects delivered on time and on budget, these professionals are becoming mini-CEOs.

Mature Enterprises Learn to be Young Again, Warming Up to the Reality of Profitable Waste

Google, with its well-publicized history of rewarding failure and encouraging moonshots, has gotten more than its share of attention, especially for Google X. But older companies know they have to become young again if they want to keep pace with digital natives. And more of these legacy brands–including Philips, Verizon 5G, Citi and Nestle–are owning up to the reality that meaningful innovation can’t be predicted in advance. When businesses take only small chances, they can only achieve small wins.

Businesses are aware of this, of course. A study from Partners In Leadership found that 84 percent of executives agree that their company’s future depends on innovation. But only 37 partners in their organization are willing to take the necessary risks.

These forward-looking companies are, in effect, learning to plan for breakage. This new realism means recognizing that every success may have required ten flops. They’re developing more practical ways to encourage risks. And most importantly, they are looking for new ways to measure success and reward innovation.

Those that don’t do this will have to be content with small incremental wins while bolder competitors make meaningful gains.

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Consistent with the notion that times of great struggle can bring great changes, we are seeing long-standing constructs in design and innovation evolve in new directions. Diversity, equity and inclusion are increasingly becoming requisite elements of product and service experience design methodologies and outcomes. The way in which successful digital product creation is positioned and prioritized within an enterprise is not only connected to project delivery but to strategic accountability and tangible business results.

And while ambiguity has long been something that designers and innovator leaders have needed to be comfortable with, they also need to be open to productive waste that leads to bigger and bolder outcomes in the end. The most successful companies will be those that embrace and apply these shifts in thoughtful and scalable ways.

To learn more about innovation-led transformation for your organization, contact us today.

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Head of Digital at MB Bank Discusses Fueling Growth Through Digital Transformation

Becoming a truly digital-first organization requires a fundamental change in how companies do business.

In today’s corporate world, is there a more highly sought-after term than “digital transformation”? Probably not. COVID-19 is acting as a catalyst in accelerating many organizations’ digital transformation agendas. New technologies and business models are putting many existing players at risk with disruptive forces. Becoming a truly digital-first organization requires a fundamental change in how business is done. Corporate leaders understand the criticality of digital transformation, however, many are struggling with how to advance it.

We had the pleasure to interview Mr. Vu Thanh Trung, Head of Digital Banking at MB Bank. MB Bank (Military Commercial Joint Stock Bank) is one of the largest financial services groups in Vietnam. Over the past few years, MB Bank initiated a multi-year transformation program to become a digital-first bank. As part of the transformation, Prophet worked with MB Bank on customer expansion strategies and helped to pave the way to a more modern, digital and customer-centric bank. In this interview, Mr. Trung provides valuable insights on how to transform and what it takes to be a digital organization today.

What drove MB Bank to embark on a digital transformation agenda?

The banking industry in Vietnam is a nascent market with considerable room for growth. With a wide penetration of the Internet and smartphones and a growing digital-savvy population, Vietnamese consumers are rapidly shifting towards digital and mobile banking. They desire more seamless digital banking services with a more personalized customer experience. To meet the increasingly demanding expectations of customers in the region, MB Bank needed to fully embrace digital transformation to capitalize on the boom of digital adoption.

What has MB Bank done so far to digitally transform?

We started the digital transformation from scratch almost four years ago. A new digital bank was set up as an independent business unit at the end of 2017 with our own balance sheet, separate from the legacy bank. Our digital transformation efforts focus on two fronts: externally, we want to better understand the marketplace and the customer needs; internally, we want to introduce collaborative and nimble ways of working across divisions.

Prophet has been our indispensable partner on this multi-year strategic growth and digital transformation journey to become more customer-centric and more innovative. We started with an in-depth segmentation of our customer needs, behaviors and attitudes. Then we mapped out a roadmap with clear growth moves focused on innovating and transforming our digital offers. An important part of our digital transformation is to instill more agility and cross-organization collaboration. Prophet showed us how to innovate faster, pilot and launch quicker. We were able to revamp the digital banking app within three months, which normally would take 12-18 months.

Lastly, I want to talk about the achievement we have made on the people front so far. We started with a team 100 percent from the legacy bank and then recruited external technical expertise to fill the functional gaps. We now have a well-balanced commercial and technical team (some 400 in-house engineers) and work more cohesively in a start-up-like environment to drive towards our digital transformation ambitions.

What are the priorities for your digital transformation?

Among all things, we focus on our PEOPLE first. Digital transformation is not about technologies, but rather about changing the mindset of our people – our organizational culture and processes. Hence, we think people should be the ones to drive the technology and not the other way around.

As I mentioned, we started off with a team 100 percent from the legacy bank. We want to create a more entrepreneurial environment where people are empowered to make a difference to MB Bank in a more cohesive and dynamic way. This is rather different from the culture of our legacy bank. So, we need to train our people with new skills and more importantly, shift their mindset towards a digital culture while building up our technological capabilities.

“Digital transformation is not about technologies, but rather about changing the mindset of our people – our organizational culture and processes”

Prophet helped us to implement a nimbler way of working to get closer to the customers and shorten the time to market. We set a shared purpose and vision to help our people to be more personally and emotionally invested. We broke down the silo way of working and replaced it with a collaborative approach. With this new way of working, we managed to revamp the digital banking app at least four times faster.

The results so far have exceeded our expectations. In the midst of the pandemic last year, we launched our new digital banking app, which became the No. 1 app in Vietnam surpassing even Facebook and TikTok. Within nine months of the launch of the new app, we had 1.8 million new customers. A feat we are very proud of given the harsh pandemic landscape and lockdowns.

What advice would you give to leaders looking to drive transformation and ensure the organization has what it needs to succeed?

Leadership is an absolute requirement for any successful digital transformation. It’s not only about setting the vision, defining the strategies and building C-suite commitment. Leaders must “walk the talk” to establish a digital culture so that everyone is on board.

The success of digital transformation must be paired with a comprehensive talent strategy that sets your people up for success.  In order to do so, we aligned incentives with staff performance to drive target reaching, providing tools and opportunities for upskilling and collaboration to help employees reach their goals.

Why do you think cultivating an innovative culture is important in a digital transformation program?

To me, digital transformation marks a reimagination of how an organization uses its technology, people and process to fundamentally change how we run the business. Digital transformation doesn’t come in a box. It provides the guidelines to steer people’s behaviors that advance our company’s goals.

A lot of organizations fail in digital transformation by ignoring the importance of culture. For MB Bank, we instilled an innovative culture through new ways of working. The agile way of working spurs our innovation process through cross-functional collaboration—allowing our people to take risks, fail fast and learn.

What are the challenges you have faced in your digital transformation journey?

We are still at the early stage of our journey. We need to continuously work on integrating technology seamlessly into every aspect of our organization to unlock the full potential of digital transformation. We need to reboot the parts of our operating model that pose hurdles for more cross-functional collaboration and operational efficiency. Then there is the holy grail of data — we are reorganizing our customer data as it is currently scattered across different legacy systems. We are in the process of integrating and synthesizing this data more effectively so that they can provide more meaningful, actionable insights for business units.

So, what are your next steps?

We are rebooting our operating model into a more unified structure and working to enhance collaboration across all business units. We need to further instill the innovative culture to fully tap into every individual’s potential and reap the benefits of agile methodology. And finally cracking the data issue across different systems so we can design more products and services to better serve our customers. We are really glad to have Prophet be our partner on this journey, helping us transform and steering us to become the leading digital bank of the future.

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Read our case study to learn how we helped MB Bank refresh their brand platform to embark on a digital transformation journey.

If you’d like to discuss your organization’s digital transformation agenda and journey, reach out to our team. We’d be excited to partner with you.

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Marketing Transformation: Scaling Personalized Technology, Workflows & Content

Our research finds that the most effective teams are also using smarter segmentation and omni-channel campaigns.

While Scaling Personalized Content, CMOs are Transforming their Companies

I joined Prophet just about nine months ago after leading the marketing services practice at one of the largest interactive agencies in the world. I thought I knew a lot about marketing transformation. I now work with CMOs who are responsible for leading their own transformation agendas. Altimeter’s State of Digital Marketing 2020 only reinforces how much of a marketing transformation is now focused on driving more personalized customer interactions and achieving the scale of operations required to support it.

The CMO Transformation Agenda is Focused on Personalized Experiences

Digital transformation, a term du jour, is often used to articulate the need to modernize an organization. Transition to the cloud, which my prior firm often spoke to, isn’t transformation; rather, it’s a means to modernize capabilities, streamline costs, and improve outcomes. In recent work, it has become clear that true transformation is anchored on becoming either a truly data-centric or customer-centric company. These are not mutually exclusive targeted outcomes but can be a different lens for defining and prioritizing company priorities. For the CMO, this marketing transformation agenda often translates into the ability to deliver a more personalized series of interactions to their most important customers who will have the most impact on their business performance. In fact, 52 percent of respondents chose personalization as their top capability to improve, while 37 percent prioritized improving segmentation—a direct input into personalization (Altimeter’s State of Digital Marketing 2020). The effort to generate more personalization requires both data-centric and customer-centric marketing transformation capabilities and measured outcomes.

Source: Altimeter’s State of Digital Marketing 2020

Measuring Performance

CMOs have been modernizing their capabilities with digital for years, with added sophistication in finding and reaching audiences through additional digital marketing channels. Another priority is improving performance on existing digital channels (42%), while investing in new ones (34%) (Altimeter’s State of Digital Marketing 2020). What is reinforced here is how the growing demands on new channels go together with the need for more personalization. Finding new or existing customers in new channels requires cross-channel understanding and insights to drive personalized interactions. The relevance and timeliness of these interactions will ultimately directly impact marketing performance going forward. Experiences are increasingly instrumented and performance understanding requires data to be captured, measured, organized and given back at the speed marketing works to be effective.

Scaling Technology

These large amounts of marketing performance data must now deliver insights that are integrated with the marketing technology platforms to enrich more real-time interactions in acquisition and conversions.

The top challenge, however, remains purchasing and integrating the right Martech platforms with 52 percent of those interviewed stating that purchasing or integrating the right marketing technology platform was their biggest obstacle (Altimeter’s State of Digital Marketing 2020). For most organizations, these investments in content management, customer relationship management, and marketing automation have been underway for years. There is still an ever-increasing need to connect more core marketing capabilities into these platforms. These integrations enable core capabilities that marketing now deploys to drive personalization, as well as the ability to measure and optimize based on desired business outcomes. The race is in reaching scale in efficiency and effectiveness of these new capabilities.

Source: Altimeter’s State of Digital Marketing 2020

Scaling Processes and Workflows

What is also apparent in working with leading CMOs on their marketing transformations is that most of the challenges they face are underpinned by the need to embed new ways of working. Forty-nine percent of digital marketers said scaling best practices across business units and geographies were their biggest challenge (Altimeter’s State of Digital Marketing 2020). Marketing budgets are not increasing to meet the needs of providing more unique and personal content to more people. Despite what many friends in technology will say, in practice, no platform alone will close this gap without fundamentally rethinking what new skills are needed, how teams are structured and how to best integrate their workflows to streamline and gain efficiency.

Source: Altimeter’s State of Digital Marketing 2020

Scaling Content

How a company presents itself in advertising, messages, on its website, in its mobile applications, etc. will matter greatly in terms of how CMOs build relevance and depth of relationship with customers. Content matters. Content matters a lot. While marketing budgets aren’t wildly increasing and growing segmentation increases demand further, the delivery of needed templates, images, copy and offers will not scale to support that demand. In order to deliver this marketing transformation, CMOs will need to turn to AI and machine learning to deliver Intelligent Content systems that tie together their marketing performance data, segmentation intelligence, content management and marketing automation tools to dynamically create personalized advertising, email, web, and mobile messages in real-time. Creating this system of “intelligent content” is a major success factor for advanced personalization, and it makes it much easier to introduce AI-assisted enhancements once a robust system has been built. Ninety-five percent of companies are able to personalize messaging and experiences in some form based on customer data, with almost a fifth utilizing AI-driven predictive analytics to do so (Altimeter’s State of Digital Marketing 2020).  This growth in the need to leverage automation to deliver the scale necessary will only increase over time.

“The new CMO agenda is about personalizing customer interactions and achieving the scale of operations required to support it.”

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As you work through your 2021 marketing plans, the above initiatives will likely loom large. I’ve learned that these types of transformations require much more than traditional modernization or just an IT-led view of technology. The work spans measuring performance, scaling technology, re-engineering workflows, creating content design systems and optimizing activities against business outcomes. The new CMO agenda is about personalizing customer interactions and achieving the scale of operations required to support it.

To learn more about how our work delivers data-centric and customer-centric marketing transformation for some of the leading companies in the world please reach out and we can connect directly.

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Four Areas of Focus for Marketing Teams in 2021

Empathy, data, relationships and direct-to-consumer convenience lead to the best results.

Prophet releases marketing and sales trends to watch every year, with advice on acting on them. Given the chaotic and unpredictable events of last year, we’re focusing on what trends from 2020 we believe are here to stay and our hopes for carrying over some good aspects from the Zoom-based year we enjoyed with clients and colleagues.

Instead, we want to talk about four established trends that we’re thrilled to see are still gathering steam. Even before the pandemic, these four marketing tactics were gaining new importance for sales and marketing organizations, but the need for digital transformation tipped them over the edge. We believe accelerating these efforts can lead organizations to be more customer-centric and deliver uncommon growth in the months ahead.

Marketing Learnings to Carry into 2021

Empathetic Marketing and Sales Strategies

Everyone knows that companies aren’t human, but this is the year we became intensely aware that the decision-makers who run them are. This heightened human-centricity will continue to shape the best marketing and sales strategies in the year ahead.

“Even before the pandemic, these four marketing tactics were gaining new importance for sales and marketing organizations, but the need for digital transformation tipped them over the edge.”

Whether it’s in terms of messaging, content, digital experiences or sales materials, it’s time to keep the empathy flowing. That means appreciating what customers are going through–and acknowledging their struggles–is more crucial than ever. It’s not just the right thing to do. It’s the best business policy and ensures companies are delivering on their brand purpose. Responding quickly and connecting through empathetic content that shares your values and says we get you are proven ways for brands to stay relevant and build deeper relationships.

Some favorite examples? As soon as the U.S. declared a National Emergency due to the pandemic, Hyundai and Ford introduced new job-loss protection programs for new owners. And IKEA and LEGO understood how worried parents are about stuck-at-home kids, quickly creating blueprints for blanket forts and reassuring videos.

Data-Driven Decisioning

Businesses that make data-driven decisions can move more effectively, leading to better customer and business outcomes. And while plenty of marketers have that level of data, too few also have the processes in place to act on it. Those that do, and those with teams assigned to accountability areas, are those that will thrive in the year ahead.

Early in the pandemic, Marcus, Goldman Sachs’ consumer banking platform, used data to gain knowledge on which of their customers needed help, resulting in targeted measures such as the introduction of a temporary hardship program, allowing its customers to postpone making a loan payment for one month at no additional interest. It also used its data to determine how to share the continually changing interest rates. By using data effectively, the platform is now better equipped than most to deal with the banking industry’s new, post-COVID-19 normal.

Fiercer Focus on Relationship-Building

More companies, including Disney and Target, are fueling growth by leaning into loyalty efforts. And they are making sure these efforts have an impact across the entire customer journey into the acquisition phase. They are using loyalty data to improve offers for all existing customers, which often proves to be a smart use of resources. Loyalty programs strengthen relationships and say to customers, “We’ve got your back.” They also help with customer acquisition to increase sales.

Direct-to-Consumer Convenience

Making products and services more convenient is an old idea. But as consumers swarm to e-commerce options, the brands with the most direct relationships with their customers–from DoorDash to Peloton to Glossier–have distinct advantages over much-bigger competitors. More companies, including B2B organizations, should find ways to emulate that closeness and convenience by helping to make convenient decision making for customers, following companies such as Levi Strauss, Lululemon and Nike that are expanding their DTC tactics.

Personal Aspirations for 2021

Just as the past year is reshaping corporate sales and marketing strategies, it’s changed people, too– us included. We’re getting to know colleagues and clients differently. For all its faults, Zoom is introducing us to co-workers in different ways, especially when their kids or pets drop in. We’re gaining a window into people’s lives and a better understanding of who they really are.

Despite occasional irritability, it’s also led to a sense of grace. After decades of expecting everything to go smoothly (remember when connecting to projectors was the most challenging part of the day), we are getting used to messy intrusions. Dogs bark. Delivery people ring doorbells. Babies need to get up and kids need help with school.

As our mental health frayed a little, we’re gaining a fuller understanding of self-care. Not only did we not mind when colleagues joined a meeting while walking outdoors, but it is also inspiring us to do the same. Also, we expressed what is important to us and set boundaries for important activities such as family meals.

Here’s hoping the new year brings us all more grace, empathy and some comfy clothes.

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We are carrying many lessons – both professionally and personally – into 2021 that have changed (and mostly, improved) the way we approach our work. With these lessons in our back pocket, we are growing alongside our clients – partnering with them to implement the most relevant, customer-centric marketing tactics to drive growth.

Do you need a growth partner in 2021? Reach out to us and we will connect you with someone from our marketing & sales practice.

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The Only Safe Assumption in 2021: We Need Compassionate Leadership

From work-life balance to developing capabilities, the best leaders are defining kindness differently.

Goodbye 2020. The year that tested humanity like no other this century. The year that took experiences away from us and gave us others we might never have imagined, some of which we undoubtedly would like to “return to sender.” At Prophet, like everyone, our working world was transformed in a matter of weeks. Then the weeks turned to months and, still incredibly busy with client work, we crawled to the end of the year wanting to put 2020 firmly behind us.

And so, it’s hello 2021 … when our true hope is that the discovery and roll-out of vaccines around the world will make this year a better one and that many of the things we crave – like social interaction with colleagues and working with our clients in person – will return.

While we can be optimistic, the watershed moment has not yet arrived. The new variant of COVID-19 is threatening the stability of many health systems around the world and countries are pressing the “lockdown” button once again.

“In an era where change is constant, there is one truth that is unchanging – this moment calls for “intentional caring” or what we might simply call compassion.”

Heading into the new year, you’re likely to have plans you’re ready to execute or develop. These are formed by a set of assumptions – goals you are trying to achieve and an understanding of your organization. But in an era where change is constant, there is one truth that is unchanging – this moment calls for “intentional caring” or what we might simply call compassion.

The response of leadership has been a key source – or otherwise – of resilience for any organization navigating through the last 12 months. Our global research in 2020, which was in the field as parts of the world started to battle the pandemic, revealed the key attributes for transformational leadership: inviting many voices, combining agility with curiosity, empathy for the employee, bringing others along the journey, staying the course with a growth mindset and prioritizing substance over “spin.” These attributes are foundational to developing into a compassionate leader and leading with empathy and compassion will not only help you strengthen your assumptions, but also ensure that whatever action you take supports your people who need it now more than ever.

Triggered by the global pandemic and social justice movements, we published our view on a set of change accelerations – “slingshot effects” – that organizations need to recognize and work with going forward to build resilience and that leaders should embrace to cultivate compassion.

As we reflect on the ongoing uncertainty at the start of 2021, we see a subset of these shifts as particularly compassionate – and they, in turn, elevate the need for a particular leadership response:

1. Work/Life Balance > Making Life Work

Companies need to move deliberately beyond questions of where people work to be more intentional about how people work to ensure their lives work. As lockdowns continue, learnings from 2020 have to be grasped, but also sustained into a recognition of the whole lives of every employee.

2. Command & Control > Empower the Edge

Achieving organizational resiliency requires changing the way we think about governance, roles and decision rights. We had to respond at speed when the pandemic struck in 2020 – and many organizations have hardwired the changes made then into their operating models. Many others have not, however, and will continue to be challenged in 2021 if this is not addressed.

3. Development by Default > Development by Design

The last year has revealed significant capability gaps in most organizations, such as capabilities required for rapid cross-functional and agile work; customer-centric product, service and experience management; and data-driven decision making. Companies will need to be deliberate in identifying their biggest gaps to be filled and building robust learning programs now to develop capabilities starting with critical functions.

4. Physical Serendipity > Virtual Serendipity

After months of distancing and restrictions to our day to day lives, employees are finding themselves bereft of personal interaction and a source of inspiration. They desperately need ways to create virtual “water cooler” moments both large and small — ways of forging chance connections amongst individuals as well as across teams and business lines.

5. Change as a Journey > Change as a Flow

Embracing change as a flow starts at the top — resetting the purpose to be that of an enduring journey and embracing change as a core competency of your organization and leadership.

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When leaders lead with compassion, they are alive to the needs of others – they recognize and feel individual context – and remain non-judgmental through their efforts to understand and take action to make a difference. Every one of the identified traits from our research drives to this outcome and focusing on these shifts can show your organization and employees that you are ready to tackle whatever is to come with them, not forcing change upon them. 2020 made it clear that compassionate leadership needs to be brought explicitly to the forefront of the leadership agenda in order to successfully navigate 2021 and shape a better future.

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Four Healthcare Trends to Watch in 2021

Why healthcare companies may never be the same.

Because 2020 torched so many assumptions in the healthcare and life sciences universe, making predictions about the year ahead feels a little like tempting fate. And while the odds are good (at least one would hope) that ’21 will be less tumultuous, four trends are likely to continue their rapid acceleration. 

Each of these changes was well underway before anyone had heard of COVID-19. But as the pandemic sparked massive shifts in regulations, priorities, technology and consumer expectations, they took off–and will continue to do so in the coming months. 

“We need to build out a digital continuum with the use of automation to seamlessly escalate someone from an asynchronous e-visit, to a video virtual visit, to an in-person visit.”

Diagnostics and Services Go Home 

After years of building vast multidiscipline medical campuses, systems are looking to decentralize, with more lab tests moving from provider offices to people’s homes. Brands like Cologuard pioneered home testing.

And such companies as Abbott Laboratories and Ellume Health are getting into the game with kits that detect the COVID-19 virus and antibodies. Others include Let’s Get Checked, which detects kidney disease, and Tyto, a device that makes it easy for parents to diagnose ear infections and sore throats while CVS is conducting clinical trials to offer dialysis to patients at home.  

This healthcare trend will continue to go mainstream, only as a matter of convenience. Once people are aware that they can get reliable test results without having to brave the doctor’s office, they’ll expect more. 

Redefining the Care Continuum

Telemedicine exploded last year, and that will continue. But the best care comes not from thinking about whether care is delivered digitally or in-person but how it’s all sewn together into a single experience. “We need to build out a digital continuum with the use of automation to seamlessly escalate someone from an asynchronous e-visit, to a video virtual visit, to an in-person visit,” says Nick Patel, MD, Chief Digital Officer of Prisma Health.

Look for providers to back away from the approach of handing patients off from one care point to another. Instead, they will seek newer, better ways to link and unify the complete care experience. As the multichannel experience goes from drawing board to reality, there will be a growing realization that high-quality patient experiences are either made or broken in the cracks of this digital healthcare consumerism continuum. 

Digital Selling Becomes More Human—and More Effective

Over the years, sales teams have resigned themselves to ever-decreasing direct contact with healthcare systems. And they’ve been investing heavily in digital selling tools to compensate. So, when COVID-19 triggered a drastic decline in in-person sales, they wanted to believe they were ready. But too often–digital tools aside–they were relying on outdated processes, thinking and talent. Yes, they have the technology to deliver targeted emails instantly. But that doesn’t matter if it still takes months to get internal approvals for their messages. 

It’s clear that virtual sales calls are here to stay, with SERMO reporting that 84 percent of physicians are expecting more remote interactions. Smart companies are focusing on what they must do better. Remote calls, for example, are 20 percent shorter than in-person visits. And what providers want more than anything – at 55 percent–is information about new products. 

The most modern selling organizations are changing the way they microsegment audiences, creating targeted digital content for every audience’s customer journey. Of course, this stepped-up content approach is technology-driven (and often requires hiring a new type of sales professional.) But the real change enabling it is at the human level, with an appreciation of speed and an increase in empathy. 

Reinventing the Employee Relationship

The basic “deal” between employers and employees–what each expects to get out of the relationship–is undergoing a rapid shift. The ability to work remotely is part of the equation. While many providers have to be on-site, others–administrators, procurement specialists and even hands-off providers, like radiologists–can work from the comfort and safety of their homes. 

And that’s changing recruiting and retention because it means, at least potentially, that someone could take a job hundreds of miles away without having to leave their home. 

And all that is occurring at a time when awareness of the importance and perils of healthcare peaks. Even as doctors and nurses are leaving the field in record numbers,  medical schools are fielding more applications than ever in a trend they’re calling “The Fauci effect.” Many fields are regaining luster they haven’t seen since the days of Jonas Salk. 

Organizations are redefining the employee value propositions, looking for ways to build and improve their cultures, providing engagement opportunities that are as meaningful for remote employees as they are for those who work in person.  

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Even with cases rising and the cost implications of the pandemic building, expect the most agile healthcare companies to find new ways to enrich the patient and customer experience, meeting changing demands and expectations. While 2020 was chaotic in many ways, the months ahead offer many opportunities for innovation and growth. 

Contact our healthcare team today to learn more about driving consumer-led transformation for your organization. 

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Make Purpose Work Harder: Lessons from Business Leaders

Our research finds that companies struggle to carve out a purpose that’s both authentic and actionable.

Businesses have been using purpose-driven strategies for years, but recent events are testing those missions like never before. Between the pandemic, political polarization and all-new virtual connections, organizations see that just having a purpose is not enough. They need one that is durable, flexible and completely human. And they realize that leading with purpose, an all-important North Star, is their best chance to stay relevant to customers and employees.

Prophet’s Purpose Diagnostic enables companies to assess the strength of their purpose in four critical dimensions, measuring whether it is…

  • Authentic (how does it tie to what you do?)
  • Inspiring (how does it connect with employees and customers emotionally?)
  • Shared (how does it create connection and build community?)
  • Actionable (how do you live your purpose every day?)

We analyzed the diagnostic results, which now include responses from over 150 leaders in more than 20 countries, and discovered common pain points where companies are falling behind. These insights also highlight the best ways to close gaps, so companies can focus on strengthening purpose in ways that engage stakeholders, build relevance and unlock uncommon growth.

The Biggest Challenge? Putting Purpose to Work

The toughest element to get right is making purpose actionable–bringing it to life in steady, meaningful ways. Overall, 28 percent of leaders reported this as the most problematic. But authenticity and the ability to share purpose are close behind.

Action is critical. If organizations can’t deliver on purpose, it doesn’t matter how inspiring, authentic or shared it is. It just becomes another empty promise. When companies fail to act, organizations lose the trust of customers and employees looking to brands to play a critical role in addressing social challenges. Purpose must be integrated into all aspects of how companies do business. It’s the way they show up in the world. This was especially true at the director, vice president and managerial level, and lower rungs in the organization. That makes sense: Those with the most accountability for how well their purpose is put into action, within a specific business area, are most likely to acknowledge weaknesses.

“If organizations can’t deliver on purpose, it doesn’t matter how inspiring, authentic or shared it is. It just becomes another empty promise.”

But developing an authentic purpose, one that feels uniquely it’s own rather than generic, is also daunting. That is particularly true in the C-suite. These executives are most likely to say their purpose lacks authenticity. They believe purpose feels less connected to their business and isn’t specific enough to their company.

And those in manager-level positions and below are most likely to say their purpose isn’t shared, likely because they have the closest understanding of how the broader organization experiences the purpose. To them, this inability to communicate purpose is as problematic as making it actionable.

C-Suite execs worry most about authenticity

Directors and VPs struggle to put purpose in action

For the rank-and-file, it’s hardest to share purpose, and put it into action

Overcoming Stumbling Blocks

There are no short cuts to strengthen and deepen an enterprise’s purpose. To function as a true North Star, a beacon that rallies all stakeholders and sparks exceptional growth, companies must continually nurture and manage their purpose. But our findings do point to specific steps to bolster each dimension.

If a company’s purpose needs to be more…

Actionable

Companies must act on purpose and measure the impact of those actions. The biggest failing among our respondents is the lack of metrics. They say they don’t have direct, or even indirect, ways to measure whether they deliver. Without such a measurement, it’s difficult to assess progress.

  • To improve:
    • Develop performance metrics aligned to the purpose to hold leaders accountable
    • Lead by example, using purpose to guide decision-making and taking action in the market
    • Tie purpose to employee behaviors and competencies, and make sure they are visible to all

Authentic

When purpose lacks authenticity, the biggest challenge leaders face is differentiating themselves from competitors. “Our purpose is unique to our company” received the lowest score of all authenticity measures. Leaders need to drive greater relevance with their customers and employees: What does this brand do that others don’t? How does it add value to peoples’ lives? The more specific the purpose, the more relevant and authentic it is to the company.

  • To improve:
    • Determine what sets the company apart and creates a unique value. Make sure those differences anchor the purpose
    • Make the company’s purpose reflect cultural strengths

Shared

When a purpose is genuinely shared, it’s easier to build bridges and start conversations. Whether it’s with shareholders, employees or customers, the right purpose forges a common bond. It fosters connection and demonstrates a clear understanding of what employees and customers need. Our research uncovered two fundamental weaknesses in this domain, with “Employees at all levels are familiar with the purpose” and “Our purpose cultivates a community and creates a dialogue” earning the lowest scores.

  • To improve:
    • Listen to what customers are saying and deliver value in ways that align
    • Weave purpose into rituals and communications with employees
    • Link it to employee’s day-to-day experiences
    • Make sure messages to shareholders and community partners reflect purpose-related efforts

Inspiring

Purpose-led businesses aim to make a difference in the world.  And they need to elevate the stories that demonstrate how they help society. Without consistent reinforcements of a company’s impact, employees and customers can forget what it stands for and why it matters. While just 20% of respondents said this was the most problematic area, all brands need to question whether their purpose is bold enough. Otherwise, it can’t inspire the storytelling required to spread the word. In our research, the ability to mobilize stories to demonstrate a lived purpose was identified as a key challenge.

  • To improve:
    • Tell signature stories that bring purpose to life, and share them regularly with employees and customers
    • Link environmental, social, and corporate efforts directly to purpose

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How strong is your purpose? Take the diagnostic today to understand where your organization may be faltering. The right purpose, used in the most effective ways, can increase loyalty and drive revenue gains. But most importantly, it leads to the future. Purpose doesn’t just help businesses decide what to do. It guides them in the best ways to do it.

Interested in strengthening your purpose and overall brand strategy? Let’s connect to see how you can unlock growth.

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Vanishing Hierarchy: The Unspoken Upside to Zoom

Remote work lets more voices be heard and more ideas to surface, increasing organizational health.

Flatter, less top-down and more innovative. How working virtually might increase your organizational health in important ways and the actions to take to preserve it.

The pandemic sent most workers into the world of working from home in mid-March of 2020. Within weeks, countless articles had already been written about the shift to working life “on camera” and about managing “Zoom fatigue”. We quickly learned that countless neuropsychological issues, including the inability to look at someone’s eyes and listen, to create physical synchrony and the mirror image presented of ourselves all contribute to this phenomenon. Seen through a different lens, however, it’s also possible that working through the medium of video conferencing might have an unexpected and positive outcome on some aspects of organizational culture.

An Unexpected Insight From Our Fall Executive Roundtable

In October, Helen Rosethorn, my Organization & Culture practice co-lead, and I convened an Executive Roundtable to review an early draft of The Slingshot Effect, our point of view on how leaders might use the concurrent crises of social justice and pandemic to accelerate necessary change in their organizations.

We brought together senior leaders from across industries, including entertainment, financial services, pharmaceuticals, retail, technology, transportation and manufacturing, and from roles spanning R&D, commercialization, product, operations, information technology and human resources. Our conversation was full of heartfelt sharing of insights where we found many commonalities across industries, geographies and organizational functions.

One executive observed something that we had not considered before. That in this moment where knowledge workers are uniformly working from home, they were observing a radical reduction in hierarchical behaviors and ways of working.

Flatter Structures Create Space For More Voices and New Ideas

In a physical office, we have many ways of signaling hierarchy, for instance, whether one is afforded an office. And, if one does have an office, its location and furniture typically provide further clues about organizational hierarchy. In our current situation, however, things are starkly different. Because even if someone is clearly working from a nicely furnished home office in a swanky suburb, the size of their box in a Zoom or Teams screen is the same as everyone else. There’s also no such thing as privileged seating in video conferencing. It’s a constant game of virtual musical chairs. When you arrive determines screen placement and each person’s view of participant sequence is individualized based on arrival time. Moreover, the host does not have the opportunity to display privilege by inviting you into an elite space like a private conference room or executive dining room. Your CEO’s Zoom meeting is the exact same Zoom experience as that of your summer intern.

“Your CEO’s Zoom meeting is the exact same Zoom experience as that of your summer intern.”

Furthermore, video conferencing tends to highlight, and possibly deter, certain behaviors of the organizationally privileged. For instance, it’s hard to take control of a conversation on Zoom without it being glaringly obvious. In person, people may be more likely to let behaviors such as talking over someone or cutting them off pass without comment. Speaking over or cutting someone off is highly magnified on Zoom and more people seem to feel obliged to stop and apologize. This can create more room for contribution from anyone who might have felt it too hard or dangerous to contribute, e.g., because of their rank, neurotype, gender or race.

Additionally, an oft-quoted study suggests that hierarchical structures are useful for decision making but quell idea generation. And indeed, a number of our roundtable attendees reported that they observed great creativity emerge from their organizations during the crises of 2020, not least because working virtually tends to thwart the efforts of those who might prefer to micromanage their direct reports.

Finally, for many senior clients, we interact with there is a fresh enthusiasm to use these technologies to be more available to their teams. The challenge of being “seen” as a senior executive, apart from once a year at a sales conference, for example, has quickly been surpassed by all being present to address questions on Zoom in a far more regular and, in the best cases, more authentic fashion.

Taking Action to Preserve the Gains

Of course, in the immediate face of the pandemic back at the start of the year, many organizations unleashed a sense of empowerment and pushed decision-making rights downward to manage how they adapted and survived. That too created a belief for many that hierarchy was being dismantled. But was it?

The natural question for firms that are now finding themselves less hierarchical thanks to the pandemic, is how might they preserve whatever advantages that they may be discovering right now? At Prophet, we use our Human-Centered Transformation Model as a tool for diagnosing and resolving organizational issues holistically. In this instance, what is being observed is a change primarily in the Soul – the ways of working within the company. In other words, remote work is changing the behaviors and mindsets of employees. And hopefully, at least this one aspect of our current situation is impacting employee engagement in a positive way.

In the transition out of 100 percent remote work, leaders should examine what might need to change to maintain any positive gains. Obviously, many will focus on being more digital-first in their workplace. But what else might you wish to consider? Here are four key questions to ask yourself, using our framework:

  1. Body: Are there elements of your operating model or the organizational design itself which bear reconsideration? Might an organizational flattening effort be overdue?
  2. Mind: Thinking about the skills and competencies of your staff – what might need to change to ensure success in a flatter organization? Do your managers need different skills, for instance, to enable them to push decision rights downwards and coach more effectively?
  3. Soul: What methods might you use to create belief in your organization that your ways of working are consciously changing as it relates to hierarchy and inclusion? What new rituals or symbols would best reinforce those signals?
  4. DNA: Finally, is it possible that there’s something in your organizational DNA, perhaps your organizational Values, that has unintentionally reinforced unnecessary elements of hierarchy? Is there something about your employee value proposition that might be improved by explicitly removing it

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Asking these simple questions will point towards immediate opportunities to lock in the cultural gains you have made over the course of 2020. And, if you’re looking for even more opportunities to increase organizational health based on your experiences this year, we’ve identified 12 specific shifts to make with immediate and specific actions in The Slingshot Effect report.

If you’d like to discuss your organizational structure and transformation planning, then our expert team can help. Contact us today. 

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