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Friday, October 20, 2017

INNOVATION SPECIAL.... Creating an innovation culture

Creating an innovation culture

Corning’s Silicon Valley technology chief shares how to stay creative over the long haul, drawing on 40 years of experience.
It’s an extraordinary time for innovation. Technological change and industry disruption seem to be accelerating. And digital information networks are linking individuals, organizations, and nations as never before.
Even as opportunities grow to exchange ideas and cross-fertilize innovative impulses across organizational boundaries, we’re also seeing a renaissance of something decidedly traditional: the corporate R&D department. Concentrations of scientific talent at institutions such as Bell Labs and PARC (a Xerox company) once ruled the innovation roost, but many company R&D units lost their luster as cost pressures made them less tenable and the digital revolution enabled smaller organizations to make outsized innovation contributions. Recently, though, a new generation of corporate R&D powerhouses has been emerging at technology leaders such as Amazon, Google, and Microsoft. The advance of artificial intelligence, for example, is creating a new set of innovation opportunities for these leaders.
All this has gotten me thinking about the lessons I’ve learned during a 40-year career in science and technology at HP Labs, Agilent Technologies, Avago Technologies (now Broadcom), and, currently, Corning Research & Development Corporation, where I serve as a division vice president and chief technologist. I believe that the forces behind the resurgence of corporate R&D departments have implications for most every company’s innovation efforts. We all need mechanisms and a culture that encourage the embrace of new technologies, kindle the passion for knowledge, and ease barriers to creativity and serendipitous advances. In this article, I’ll offer a number of ideas from my career for creating such a culture. I’ve focused on lessons that seem less intuitive, since some of the obvious ones—invest; attract talent; focus on linkages between idea development, product creation, and consumer adoption—have been covered extensively elsewhere.
Practice ‘innovation parenting’
In my experience, innovative cultures start with a philosophy and a tone—one analogous to the classic parenting advice that children need both “roots and wings.” As an innovation leader, you must ground creative people in accountability for the organization’s objectives, key focus areas, core capabilities, and commitments to stakeholders. Then you give them broad discretion to conduct their work in service of those parameters. Obsessing too much about budget and deadlines will kill ideas before they get off the ground. Once your scientists understand that they areultimately accountable for delivering practical products and processes that can be manufactured affordably, you can trust them to not embarrass you by wasting a lot of money and effort. This trust helps forge an innovation culture.
Innovation parenting also pays attention to innovators’ social development. Millennials, in particular, will expect and seek out opportunities to interact with people who interest and excite them—exchanges that should, in turn, build innovation energy. To help individuals see where their work fits in the knowledge ecosystem, encourage relationships with colleagues in the internal innovation chain, from manufacturing to marketing and distribution. I ask my new hires to generate a list of who’s who at Corning within the first few months on the job. This helps them overcome the assumption that many hold that they must do everything themselves. That’s nonsense; others within the organization often have already sorted through similar problems. Understanding that early in one’s tenure reduces wasted effort and can inspire new bursts of collaborative creativity.
Bust hierarchy
You can reinforce the cultural benefits of innovation parenting by opening up organizational space to allow innovators to bypass barriers and hierarchies that often sap creativity. I recall a scientist who had just returned from a conference in Japan and who barged into my office with a fierce determination to immediately begin work on a new (at the time) kind of laser that promised very low-cost computer interconnection. He had just met the inventor of the laser and had gone through a back-of-the-envelope analysis showing its feasibility. Realizing that his own expertise wasn’t a direct fit for developing the new laser, he assembled a small team of engineers and technicians and reached out to a couple of University of California professors who had already started work in the same area. The lesson? If he had not insisted on going to the conference; if I hadn’t broken the rules and let him travel; if we hadn’t given him the resources to start the work; and if he had not asserted that the best time, however painful, to rethink the company’s direction was during a down cycle, we would not have been the first company to develop this widely adopted technology.
Encourage the unreasonable
Most companies value unconventional thinking, assuring brainstorming participants that there are no bad ideas and urging them to think outside the box. But you should also encourage the truly impractical in some situations—for example, when conducting scenario-planning exercises to unearth potential competitive threats. In a recent session, one of our most respected scientists asked what would happen if a rival developed a way to deposit magnetic films on glass without high temperatures, challenging one of Corning’s industry-leading capabilities: creating glass that withstands high temperatures for industrial uses, such as information technology for data centers. People laughed and ribbed him as though he had referred to the fourth law of thermodynamics. But it ultimately triggered a discussion about temperature range, what new possibilities might arise, and what kinds of resources would be needed to address potential challengers.
Corning’s CEO, Wendell Weeks, is always setting the bar beyond what is reasonable. Recently, an engineer proposed a brilliant solution for increasing the efficiency of a technology by 25 percent. Weeks asked, “Why not 50 percent?” The engineer was flabbergasted at the outrageousness of the question. But then he started considering what it would take to achieve that goal. Even though 50 percent was not realistic, the question prompted him to think of possibilities that he would not have considered otherwise.
Don’t die of indigestion
Conventional wisdom holds that organizations die of starvation from a shortage of good ideas and projects. In reality, they are much more likely to die of indigestion. A surfeit of projects with inadequate staffing makes delivering on anything less likely. When I see a scientist committed for 15 percent of his or her time on a project, and others for 5 percent, I become pessimistic about the effort, since there’s no real ownership, progress often is slow, and team members get frustrated. Scientists should stick to two projects—having only one can be boring; having three can overextend you. Concentrating on two projects allows immersion in a primary project, with the possibility to shift gears to the other project if the first one hits a temporary roadblock.
Cultivate external relationships
Relationships that extend beyond the boundaries of the organization are invaluable to acquiring and distributing knowledge. I’m fortunate that the contacts I’ve built through a career on the front lines of research have made it possible for me to stay in touch with a diverse array of large companies, start-ups, venture capitalists, national labs, and universities. I gain a lot from exposure to these innovators, and I also try to give back to them—for example, by explaining Corning advances such as bend-resistant optical fibers, Gorilla Glass, and technologies for drug discovery, to name a few.
These discussions sometimes lead us to bring teams from outside Corning together with innovators inside, which may yield coinnovation or joint-development agreements. When others truly understand your innovations, doors to collaboration swing open, giving partners insights into how to further develop and commercialize your technologies. For instance, after a trio of Corning scientists solved the tricky problem of bending optical fibers in a very tight radius without appreciable performance losses, sharing this breakthrough enhanced Corning’s reputation and ultimately made “fiber to the home” a reality worldwide.
These relationships have also produced leads in emerging Silicon Valley technologies—such as virtual and augmented reality, interconnections in data centers, and advanced displays—where there is potential for Corning involvement. And they have helped us import helpful, new management practices, including better ways to evaluate innovators’ performance, faster resource reallocation, and the design of physical work environments that encourage idea sharing and creativity.
Hire the best—and fast
No culture can be innovative without great people, and the demands on innovators have never been greater. It used to be the case that R&D organizations could hire a top scientist to work on a specific project. In today’s febrile competition for those with the most diverse skill sets, this limited approach doesn’t cut it. Instead, R&D leaders need to hire people who are willing to join multiple projects and to move from one to another as needed. Call them ambidextrous; call them system thinkers. These are people who want to solve problems that matter and that take them from invention to final product. They constantly push for improvements and create their own luck by sensing what is happening in their field and then applying their observations and experience to problems. At Corning, we ask scientists not only to invent new materials but also to help develop the processes needed to mass-produce them.
Identifying, recruiting, and retaining deep scientists, interdisciplinarians, and visionaries requires new thinking and good connections. Maintaining close relationships with influential professors at leading universities who can connect you with promising graduates is key. A few years ago, a professor friend from Stanford University called to let me know that one of his best students was graduating—one with expertise in optical technology. Though she had several offers in hand, he sensed that she would be a good fit for Corning. After an introduction, I immediately made her an offer, even though I didn’t have an opening. I called my boss (Corning’s chief technology officer, David Morse) to break the news, and rather than the expected rebuff, he asked, “Do you have any more people like her?” The boldness paid off, as she designed and built the industry’s first optical cable for consumer applications and has spearheaded many other critical efforts.
By Dr. Waguih Ishak
McKinsey QuarterlySeptember 2017

https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/creating-an-innovation-culture?cid=other-eml-alt-mkq-mck-oth-1709&hlkid=2541110bac7a43088660ee56414fb57c&hctky=1627601&hdpid=9067f6d3-4d2b-4632-94e5-8f57ae7b6700

BOOK SUMMARY 401 Flying Solo

BOOK SUMMARY 401
Flying Solo

·         Summary written by: Fern Chang
"The happiest soloists succeed because they have the knack for putting work in its proper place alongside the rest of their lives."
- Flying Solo, page 13
Working from a beach chair and earning enough to support that lifestyle may be the dream of many corporate office workers, but what does it take to venture out on your own? How does one manage the multiple moving parts of a business, align them in exactly the right directions, harness sufficient momentum to take off, and stay airborne at a comfortable cruising altitude?
The book Flying Solo is written specifically for people who, either by circumstance or by choice, wish to transform their work lives from the typical 9 to 5 routine to a work anywhere, anytime arrangement.
In the context of this book, a soloist is either an independent professional who sells his expertise for a fee (a consultant, freelancer) or one who owns a small business of less than five employees (a franchise holder, café owner, tradesperson). Of all businesses in operation in Australia, the US and UK today, an incredible two-thirds are micro business ventures.
We live in an unprecedented era of flexible work opportunities made possible by internet technologies. However, without the right mindset and skills, the soloist will not thrive.
The authors, Robert Gerrish, Sam Leader, and Peter Crocker, put together an actionable guide filled with insightful tips and thought-provoking worksheets that, when honestly and diligently employed, will greatly enhance the success of anyone flying solo.

The Big Idea
Profile of a successful soloist
"Cultivating a mindset which mirrors that of the successful soloist is a crucial step toward growing the wings you need to fly solo."- Flying Solo, page 37
Here are some major traits of happy soloists:
Mental and emotional
·         A healthy level of self-confidence and courage to embrace uncertainties and take necessary actions.
·         Reject traditional benchmarks of success, like material wealth and social status, in favor of the freedom to work their own hours and express themselves through their work.
·         Constantly learning and discovering what works for themselves and others.
Operational
·         Able to work in the absence of a formal structure.
·         Savvy with marketing principles.
·         Responsive to customers’ needs.
·         Open to collaboration with ‘competitors’.
·         Offers value for clients while remaining profitable.
Vision
These traits are often aligned with an inspiring vision which soloists depend on to focus their energies.
A vision is a mental projection of your future which can be used to guide your actions and determine your decisions.
Even if there are gaps in your vision, you can still make progress. Where clarity is missing, concentrate instead on substituting details with feelings, sensations and thoughts.
For example, a vision could be “to make use of your creative talents,” although the specific activities are not yet clear. Continue to explore in this direction so that you can recognize the right opportunities when they arise.
Prompts like “Twelve months from now, I see the following appointment and commitments in my diary” help to craft a mental picture of a clear vision.

Insight #1
Spread the word
"Your company can't thrive just by fulfilling basic needs. You must somehow connect with passionate early adopters and get those adopters to spread the word."- Seth Godin, quoted in Flying Solo, page 95
For businesses to grow, soloists need to proactively present themselves to their target audiences. This means attending events in person and getting involved in conversations. Networking online is not enough.
The ideal outcome of every introductory conversation is to be heard and understood. Craft an introduction that is free of jargon, straight-forward and which elicits a genuine reaction of “That sounds interesting, tell me more.” For example, instead of saying “I am an accountant,” say “I help businesses pay less tax and retain more profit.”
Do not assume that what you want to say is the same as what others want to hear. To learn what your perfect clients want to hear, imagine listening in on their conversation. What are their pains and needs? Then design your pitch for their benefit.
Here’s an example of a pitch stating a feature in demand and the outcome: “I create software that troubleshoots accurately. As a result, call center managers are better equipped to solve their customers’ problems.”
When the message is well understood, it is easier for others to spread the word.
Referrals
Word-of-mouth referral is the best source of new business for 85% of businesses.
To make a referral, people need to be able to testify what you are like both personally and professionally. It takes time and effort to nurture this relationship, which typically progresses in this order:
·         Strangers – people you have yet to meet.
·         Nodders – nodding acquaintance.
·         Smilers – you know each other a fair bit and smile when you meet.
·         Huggers – really get what you are about.
·         Raving fans – actively refer for us.
Huggers may need a little prompting to become raving fans. Every time you nudge someone into the raving fan spot, you open the door to a potential stream of referrals.
To get referrals, be a referrer.

Insight #2
Create an operations manual
"The aim is to get the 'recipes' so precise and easy to follow that anyone can pick up your operations manual, follow its instructions and expect a predictable outcome."- Flying Solo, page 115
Business processes generally live in the head of the soloist, and no one else can take over the running of the business.
An operations manual is a written guide that explains how the business operates. Business owners need to recognize the benefits of the operations manual:
·         It makes businesses easier to run, and ultimately, sell.
·         The structured approach keeps the business on track. The discipline and consistency gives an impression of authority.
·         It helps to identify areas of inconsistencies or for improvement (e.g. the tag lines in email signatures should match that in brochures).
·         It helps with business growth (e.g. opening of new locations or franchises).
·         It helps to secure repeat business by ensuring consistent customer experiences (e.g. mints and magazines in reception areas, special gifts with purchases).
·         It helps with creativity, as repetitive tasks can be outsourced, leaving more time to strategize, consult or develop new ideas.
·         It provides a competitive edge as competitors often do not have one.
Sections of the operations manual include:
·         The basics
·         Operational information
·         Response time
·         Products and equipment
·         Scheduled actions
·         Trade secrets
·         Customer policy
·         Financial basics
·         Who is responsible
Financial basics deserve a special mention since cash flow is the lifeblood of a business. This section will include: Bank and accountant details, third party mark ups, quoting templates, pricing formulas, and invoicing policy.
Start with the more complex procedures as they are the ones that are most valuable, followed by the simpler, everyday tasks. Continue to adjust as the business evolves.
Flying solo does not mean working in isolation. Online communities like Flying Solo exist to provide soloists with a platform to support each other.
Is flying solo a feasible option for your profession?


STARTUP SPECIAL ....Battleground FMCG: David vs Goliath

STARTUP : Battleground FMCG David vs Goliath

The next chapter of India's consumer story is being written by challenger startup brands promising high profits and strong exits for investors. Supraja Srinivasan writes on how consumer product startups are battling roadblocks to stand out amid giants
The reasonable man adapts himself to the world: the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man.­ George Bernard Shaw in Man and Superman
Even in a land where the venerated curd is a dietary staple for nearly a billion people, Greek yogurt was able to stoke a David versus Goliath slugfest last year. A few months after Mumbai startup Drums Food International launched its Greek yogurt brand Epigamia, the world's biggest maker of packaged foods, Nestle, decided to introduce its version in India. Greek yogurt is a premium product for a niche market much too small to allow even elbow room when a giant such as Nestle enters. Epigamia, however, had a stroke of luck.

“When Nestle introduced GREKYO 4-5 months after Epigamia's entry in the market, they launched with full-page advertisements in leading newspapers.But when people searched for Greek yoghurt on BigBasket and other websites wanting to buy GREKYO, it wasn't there. What showed up instead was Epigamia,“ said Deepak Shahdadpuri, Managing Director at DSG Consumer Partners, an investor in Drums Food, which also sells Hokey Pokey ice cream. “So when Nestle launched and undertook their marketing campaigns, Epigamia's sales went through the roof.“

Over the past 4-5 years, consumer product startups have been making their mark in a domestic startup ecosystem dominated by consumer internet companies such as Flipkart and Ola. These young companies are beginning to chip away at the edges of giants such as Unilever and Marico with smart marketing and innovation that millennials are willing to spend on.With organic, healthy, and toxinfree as their flavours, startups such as RAW Pressery (premium fruit juices), Bira (craft beer) and Teabox (premium teas) have been the earliest adopters of this narrative, writing their own scripts and building India's next wave of challenger brands.

Attempting to crack markets long shaped by legacy retail giants, however, is fraught with challenges.Lean distribution and mismatches alone can choke sales, proving costly for consumer startups trying to stitch together businesses with shreds of capital and jostling for recognition in markets dominated by Goliaths.

“The key is getting the right retail distribution and that is the biggest challenge that these startups have,“ said Ash Lilani, managing partner at Saama Capital, an investor in RAW Pressery and Veeba Food Services. “Shelf space is a premium in retail stores. Not only is getting a place in offline retail key but also (important is getting) the right display positioning within a store to be able to differentiate.“

No doubt, then, that distribution and marketing are the two biggest challenges that plague consumer startups in their battle with the legacy giants.But where capital doesn't work, innovation can.

“We created an entire last-mile delivery. I hired (Mumbai's) dabbawalas for our deliveries. Dabbawalas typically handle 200,000 deliveries a day. For RAW Pressery, they had to do 50,000 deliveries in three hours,“ said Anuj Rakyan, founder of RAW Pressery. He zeroed in on Mumbai's famed dabbawalas--a semi-formal network that delivers thousands of lunch boxes to office-go ers with high accu racy--after his attempts at working with newspaper and milk delivery boys failed. Four years later and with Rs 100 crore raised in funds, RAW Pressery owns its own fleet of 25 refrigerated vehicles that not only delivers its juices but also undertakes cold-storage deliveries for other brands such as Epigamia and Wingreens Farms as also some big guns including Future Group and Burger King.

Getting the first order, though, can be tough. “It is very difficult to convince big brands to take a bet on a young, non-established company when the same product can be bought from a bigger company at a cheaper price. I used to sit around at various brands' offices the whole day seeking business,“ said Viraj Bahl, CEO of Veeba Foods, a maker of condiments such as olive oil mayonnaise and barbeque sauce.

The company, which competes with Hindustan Unilever and Nestle for a slice of India's Rs 13,580-crore sauces and condiments market, signed Domino's Pizza as its first client after a 10-month wait. Veeba now supplies to clients including KFC, Burger King and Dunkin Donuts.

Investors and entrepreneurs insist guerilla marketing is the only way for startups to beat the might of the giants. RAW Pressery, Veeba Foods, Bombay Shaving Company have all tapped social media influencers to initiate conversations around their brands and businesses.

“The product led to the audience,“ said Rakyan. “We identified and reached out to fitness gurus and influencers. Yoga teachers and dieticians started calling me... I would also stand outside gyms to sell juice bottles.“

Investors believe there is no set rule to making a mark in this industry. “Product trials are the most powerful marketing a brand will ever have,“ said Shahdadpuri of DSG Consumer Partners. “To understand what drives someone to buy and consume a product, nothing but trial, trial, trial till you get it right.“

Veeba Foods tapped into a grow ing food-blogging network to get social influencers such as Hebbar's Kitchen, Archana's Kitchen and Your Food Lab to sample and build conversions for its products.

Bombay Shaving Company, which makes premium grooming products for men including razors and facial scrubs, sent samples to retail industry bigwigs including Future Group's Kishore Biyani and DMart's Radhakishan Damani as well as actors and cricketers when it launched. “Whether they used it or not we don't know, but a lot of them tweeted about it,“ said CEO Shantanu Deshpande. “You have to hack your way into (the system) somehow.“

Some startups use storytelling to create interesting content around their products. For Siliguri-based Teabox, which ships its teas to 112 countries, this worked wonders in creating a steady consumer base.“There is a lot of history when it comes to tea. So we created a lot of content around our products such as on the region, the plantation and the people surrounding it. We essentially created a form of storytelling that generated a lot of hook for us.We then used targeted searches on Google to get our first few customers,“ said founder Kaushal Dugar.

Consumer goods giants have begun taking notice of such startups despite their small scale and almost negligent market share. “Consumer goods majors want to find premium products in new growth categories,“ said Lilani of Saama Capital.“They don't always want to build something from scratch. They would rather see something that has reached some scale and then acquire that.“

Also, the large sizes of companies such as Dabur and Procter & Gamble do not allow them to take bets a startup can. It is easier for new entrants to tap small, niche markets that have typically urban consumers craving and willing to pay a premium for value-based products.

“If Kellogg's launches an initiative in India, it has to be at least worth Rs 50-100 crore. Otherwise, it makes no sense for them. If it doesn't move the needle, why would they bother?“ said Shahdadpuri. “For segments where the market size is not proven, it will be very difficult for large companies to get their boards to sign off on anything that is too small to be relevant.“

Instead, consumer goods giants would rather wait for the startups to start raking in enough demand to show scale. “When a startup breaks through the Rs 30-crore revenue base, it is for real; when it crosses Rs 100 crore, consumer goods companies start waking up; and when it crosses Rs 200 crore, they start thinking if they should look at buying it,“ said Lilani. But to reach that position and scale, consumer product startups need to look beyond creating a single product, he said.

With Unilever's $1-billion acquisition of US-based grooming startup Dollar Shaving Company last year, its $140-million purchase of New York-based condiments startup Sir Kensington's in April, and Marico's undisclosed investment in Ahmedabad-based men's grooming brand Beardo in March, the M&A script between consumer goods Goliaths and Davids has only begun.

The rising wave of consumer startups has triggered a surge in investments this year. Data from research platform Venture Intelligence show $230 million was infused into consumer product startups in just the first three quarters of this year, as compared with $78 million all through 2016.

While investors such as DSG Consumer Partners, Saama Capital, Sequoia Capital and Fireside Ventures are increasingly looking at this sector in specific, several others are looking to cash in on an opportunity that could provide strong investment exits. “All the branded plays typically work in a gross margin range of 40-45% and that leaves a lot of room to build profitable businesses,“ said Navin Honagudi, investment director at early stage investment firm Kae Capital. “(For investors) the thesis is that in the long-term at least 20 brands will be built across food, beverage, apparel, etc. That's what has changed for investors to focus on this space.“


Supraja Srinivasan Oct 13 2017 : The Economic Times (Mumbai)

DIGITAL SPECIAL.... What enterprise-technology companies must know to drive digital-sales growth

What enterprise-technology companies must know to drive digital-sales growth

B2B companies often achieve subpar results from digital-sales initiatives—and tech companies are not immune to this problem. How can they reverse the trend?
Over the past few years, many B2B companies have taken a cue from their B2C counterparts by increasing their investment in digital sales. But most have achieved limited bottom-line impact, with expected gains failing to materialize or falling far below expectations. Often, the problems arise because companies have trouble achieving benefits at scale, with many promising initiatives losing momentum after the pilot stage.
·          
Enterprise-technology companies are not exempt from these problems. In fact, they grapple with more complications than most B2B or B2C players do when they undertake digital-sales efforts. That said, the enterprise-technology companies that persist in improving their digital-sales execution can achieve incredible value. In the recent McKinsey Digital Quotient Diagnostic, the companies with the best digital capabilities generated an 18 percent total return to shareholders, compared with 10 percent for the rest of the field. They also reduced their cost to serve by between 40 and 60 percent, and their five-year revenue growth was five times greater than that of their peers.
We have identified five steps that will help enterprise-technology companies to emulate the leaders in the diagnostic and tap the full value of digital-sales growth.
1. Creating a comprehensive and focused digital-sales strategy
According to McKinsey’s Digital Quotient Diagnostic, only 25 percent of enterprise-technology companies have developed a comprehensive digital strategy, encompassing sales and other initiatives, that relates to their overall business strategy. Instead, many players launch numerous small-scale initiatives in different business units. Few ask themselves what they are trying to achieve or how much impact they want to obtain. These scattered efforts may modestly improve costs and revenues, but they fail to deliver big returns.
Enterprise-technology companies may struggle with strategic questions because they are still adjusting to the new landscape. In the Digital Quotient Diagnostic, only 20 percent of respondents stated that they understood how digital is disrupting their industry. It is also clear that many enterprise-technology companies do not understand what value digital will deliver, making it difficult to prioritize initiatives, including those related to sales.
To address these issues, enterprise-technology companies need to treat digital as a strategic priority, giving it the full attention of top executives and a place on the C-suite’s top agenda. For instance, leaders must develop a clear view of their digital-sales gaps and determine what value they can attain by closing them. They must also establish long-term, company-wide goals, prioritizing initiatives by their impact.
Different business units can take the lead for individual initiatives, as long as they work in coordination. Every project they launch—from large ones that could potentially create significant new revenue streams to small-scale initiatives—must have clear goals relating to the larger vision. Digital-sales programs should also take advantage of a company’s established capabilities, such as those related to user-experience (UX) design tools.
In addition to coordinating initiatives, the best companies refine their existing processes, adopting best practices across the business and creating capability-building programs for employees. If one group develops a successful digital-sales solution or identifies a novel use case, it should share these insights across the organization and create solutions that other groups can use.
2. Concentrating on customer needs
Enterprise-technology players garner most of their profits by developing complex products with leading-edge features. When it comes to digital sales, however, the focus on technology can lead these companies to overcomplicate and overcustomize their efforts, making the sales process difficult for customers. Adding to the problem, most enterprise-technology companies have been slow to automate and simplify the customer decision journey—the path buyers travel as they make a purchase. Instead, they focus on automating internal processes. Not surprisingly, many B2B customers report a subpar sales experience.
Enterprise-technology companies may have difficulty developing a customer-focused strategy because they tend to have far less knowledge of their target segments than B2C companies do. In the Digital Quotient Diagnostic, for example, only 40 percent of respondents stated that they thoroughly understood their customers’ changing needs and expectations. This lack of insight may explain why traditional enterprise-technology companies often lose business to digital natives—recent entrants to the B2B space, such as Amazon—which provide simple, customer-friendly solutions at lower prices.
The best enterprise-technology companies will address their deficits by examining their target segments’ needs along the customer decision journey. As a first step, companies must identify the factors that influence the key decision makers at each of the journey’s stages, including the points where they assess their options, conduct research, and evaluate possible choices. Later in the journey, companies must gather information on the purchase experience, product usage and service, repeat-purchase rates, and customer loyalty. Ideally, they will obtain insights about the customer decision journey from multiple sources, including their own observations, internal and external data, and research about customer behavior and preferences. Some of the most useful real-time customer insights may be obtained by using advanced analytics to detect patterns in customer behavior or by consulting a standing customer panel that can suggest new solutions and provide feedback.
Enterprise-technology companies should provide digital options along the entire customer decision journey, since buyers increasingly expect them. For instance, over 90 percent of B2B customers conduct online research when making purchase decisions, and 84 percent prefer to make repeat purchases through digital channels. In one case, a telecom operator’s major customer threatened to switch to another vendor because it could reorder only through a representative. This is not to say that companies should completely abandon offline channels, however. In fact, customers prefer in-person interactions at many points, such as the first stage of a complex purchase.
As companies create their digital strategy, they should focus on ensuring that customers can navigate seamlessly between channels. They should also emphasize the importance of strong omni-channel interactions, regardless of whether these occur digitally, in person, or over the phone. In other words, companies should concentrate on creating the best customer journeys and experiences rather than on making a sale.
3. Shifting from rigid to agile
Across industries, companies often emphasize the importance of agility and speed when implementing digital-sales solutions, especially those that involve multiple organizational units. By moving rapidly, companies can quickly adapt to market changes, including the emergence of new competitors, economic shifts, evolving customer preferences, and the introduction of innovative products.
Our Digital Quotient Diagnostic suggests that many established enterprise-technology companies are having difficulty applying agile processes, and this could interfere with their digital-sales efforts. For instance, only 20 percent of the respondents stated that they were comfortable with the rapid-testing and -revision cycles that agile requires, and upward of 70 percent said they needed more than six months to move from the idea-generation phase to implementation when developing products or services.
To apply agile principles at scale within the sales organization, established enterprise-technology companies must significantly alter their current work processes. Sales teams typically develop complex digital-sales solutions over many years, testing them only when they are complete. A more agile approach includes “growth hacks”—short, ring-fenced initiatives favoring a highly iterative process of testing and learning, with the high involvement of the sales front line. These hacks streamline progress and create value by helping companies reduce the time spent planning initiatives on spreadsheets.
Although growth hacks keep sales representatives motivated by delivering quick wins, they will not materially improve a company’s overall performance unless leaders compile and disseminate strategic knowledge gleaned from them. Companies can then improve existing processes by using these new insights. As leaders roll out the new processes, they should be flexible and make additional refinements based on lessons learned in the marketplace.
To move from growth hacks to large-scale initiatives, companies must assemble cross-functional teams that are empowered to make decisions and have access to state-of-the-art collaboration tools. As they launch initiatives at scale, they may also benefit from a build—operate—transfer approach, which involves implementing new technology solutions or software applications in a “sandbox”—a restricted testing environment where companies can experiment with code changes and other departures from standard IT practices. After creating a satisfactory test solution or a minimum viable product (along with the skills to support it), companies can expand usage into all business units.
Enterprise-technology companies must make some organizational changes to gain the full benefits of agile. These may include moving certain groups to one new location, so they can collaborate on-site with other functions. Companies could also switch from a functional structure to one that groups employees by solution or customer journey.
4. Recruiting and nurturing talent
Despite extensive skills in software development, engineering, and related areas, only 34 percent of enterprise-technology companies in our Digital Quotient Diagnostic stated that they had the capabilities needed to implement digital-sales solutions. Lacking the requisite skills, many players struggle to create digital content, apply advanced data analytics, or implement social-media campaigns.
Addressing capability gaps requires enterprise-technology companies to be more thoughtful when evaluating organizational issues. Before any project starts, they should identify the capabilities needed (both for sales technology and operations) and develop a plan to fill those roles. While executive leadership is important for any initiative, it is also crucial to find midlevel talent. Employees at that level can make or break digital initiatives, and they are ultimately responsible for bringing products, services, and offers to market. For instance, companies will need talented scrum masters to lead cross-functional agile teams.
As digital initiatives proceed, sales organizations must identify their top performers, as well as the traits and skills that lead to success. With these insights, they can effectively invest in continuous coaching and capability building.
5. Monitoring results with relevant metrics
While more than half of enterprise-technology companies consider digital-sales programs a top priority, only 25 percent can quantify the return on investment for every initiative implemented. This disconnect may occur because companies often rely on traditional key performance indicators to measure progress—ones that are often not appropriate for digital initiatives. In other cases, companies create digital KPIs but fail to hold staff accountable for performing strongly on them. Both of these errors can doom digital-sales programs.
While traditional metrics, such as those for conversion, are valuable, the best enterprise-technology companies will find new ways to measure the success of digital-sales programs. For instance, tracking release speed is always important to gauge whether agile methods are becoming institutionalized. Other metrics that might be valuable include digital adoption rates, content views, and an increase in online customer interactions. For every metric established, companies must diligently track their progress and share the results with all relevant groups.

While successful digital-sales efforts can take many forms, they all share one common feature: successful implementation requires a combination of top-down direction and bottom-up enthusiasm. Leaders should develop a comprehensive strategy and create the systems, processes, and structures needed to support digital-sales efforts—and that includes adapting products and pricing models when needed. Together, these efforts will transform the customer experience, putting enterprise-technology companies on par with B2C leaders.
By Dianne Esber, Wei Wei Liu, Åsa Tamsons, Lareina Yee October 2017

https://www.mckinsey.com/business-functions/digital-mckinsey/our-insights/what-enterprise-technology-companies-must-know-to-drive-digital-sales-growth?cid=other-eml-alt-mip-mck-oth-1710