Is disruption still disruptive? Or is it just the new normal?
Nearly every industry on the planet is being disrupted by startups and upstarts that are providing unique experiences for their consumers, often leveraging technology to enable the consumer to personalize and control that experience in unprecedented ways.
These companies also are waging a war on talent – reaching into a workforce comprising an astounding six generations to reignite the passions of experienced professionals eager to try a different way of doing things, while simultaneously attracting emerging talent excited about creating these experiences.
Companies that succeed in delivering the experiences that customers want are not only creating disruption – they are also delivering transformational change. And this type of change can arise only when leaders balance a compelling strategy with measured execution, simultaneously motivating their team, documenting and communicating progress, and responsively adapting to what they learn.
To meet evolving customer expectations, established firms must first transform themselves – a process that can be fraught with challenge. Not surprisingly, a primary predictor of success in this effort rests with the leadership team. Successful leaders use continuous feedback loops and meaningful data to guide them. They also have vision – not unlike the iconic and iconoclastic founders and CEOs of great companies – but, most importantly, they also have the ability to unite a broad-based team behind that vision so that they can strategically execute it.
Microsoft’s Satya Nadella is a great example of a transformational leader. When he took over as CEO, he knew he couldn’t execute his vision without first adjusting the culture of his organization. He shifted his focus from products to people. To improve employee experience, he adjusted the internal review process and renovated office spaces to encourage the team to adopt a more open culture, one where it is okay to make mistakes and learn from them. In doing this, Microsoft’s culture evolved into one of trust, creating a positive employee experience that reverberated in a better customer experience, which led to increased growth and profitability. With Satya at the helm, Microsoft’s stock price increased by three times, and the company briefly eclipsed Apple as the most valuable one in the world.
Satya was able to transform Microsoft at a foundational level and create momentum for the company at a critical juncture: the nascency of hyperscale cloud computing. As a result, the astronomic growth of Azure reflects a product that, like the company and its culture, has become synonymous with openness and trust.
In order to drive transformation like this, transformation that “sticks,” exceptional leaders need a healthy balance of strategy and execution. However, according to a recent study conducted by Gartner, in today’s uncertain geopolitical environment, companies face ever more complex problems, and many organizations have more matrixed organizational structures and more distributed decision-making processes than we’ve seen before. This creates a significant gap between articulating a clear strategic vision and operationalizing that vision in pragmatic ways.
Turning vision into action means avoiding the trap of “planning” then “doing” – moving from a linear approach to an iterative one. When change is constant, we must be consistently executing our strategy while – in parallel – optimizing and adapting it to our assessment of the market.
The ability to continuously execute and optimize a strategy is also contingent on feedback. Great leaders create a strong system of internal and external feedback loops that provide a 360-degree view of how the team is feeling and how the market is reacting, at every level. It can include everything from in-person touch points with a variety of people of varying points of view to pulse checks within the organization as a whole to a systemic platform that incorporates consumer sentiment, product reviews, purchase intent, and customer feedback. This feedback structure builds trust and provides a way to measure the experience we’re creating, and enable course correction as needed. Turning qualitative feedback into quantifiable data empowers leaders to deliver transformational experiences.
Organizational transformation is only the first step toward providing transformational experiences for your customers. At SAP, understanding the experience our customers want to have and providing it to them is our goal. We call this Experience Management, and what it really means is that we’re trying to understand the nexus between the experience we create and the result it produces by leveraging organizational culture and technology to continuously learn, propagate insights, and regularly adapt. We want to engage with our customers on their own terms – by anticipating what they’ll want next and galvanizing our business operation to meet those needs. This approach allows companies to separate the signal from the noise and understand which metrics –customer satisfaction, net promotor score, leadership trust, employee engagement – are sensitive to which experiences: the “moments that matter” that impact balance sheet key performance indicators (KPIs) related to growth and profitability.
Companies that understand the experience created by key business processes have powerful tools to efficiently improve customer loyalty and brand equity. In fact, a recent study by Qualtrics, an SAP company, showed that companies considered customer experience leaders grow two times faster and maintain operations that are 15% leaner than the average company.
As anyone who’s started a new fitness routine or even taken a torturous cycling class can attest, physical transformation is hard. But any athlete will tell us that the secret to change is discipline – the endless cycle of doing, doing, and doing again, each time seeking to be just a little bit faster, stronger, better, more accurate, and more precise – and with every goal achieved, setting new and more aggressive ones.
Similarly, transforming an organization takes disciplined, iterative execution – staying focused on our goals and evolving them as we execute and improve. Leaders who earn the trust of their employees and customers by delivering the experiences they value will succeed at transforming their companies; the future belongs to them.
Where do we go from here?
I invite you to explore how SAP is helping deliver the Intelligent Enterprise, a strategy that allows you to transform data into action across all lines of business – driving process automation and innovation, unlocking new areas of growth, and delivering exceptional experiences.
Eric Stine is a father, husband, recovering lawyer, political (and peanut M&M) junkie, and passionate architect of great customer experiences. He is a strong advocate of developing inclusive, creative working environments for all of his team members.