In the final part of an eight-part series on leadership in the digital age, Malcolm Alder turn the spotlight on a diverse range of Australasian and American digital success stories. These seven organisations have deliberately been chosen to showcase a cross-section by size, industry, ownership, starting position and duration to date, for their digital journeys.
In Australia, Domino’s share price has risen more than 500 per cent in less than three years — such that it now has a market capitalisation exceeding $5 billion. For a narrow product range in a highly competitive sector, this is incredible. Domino’s is explicit in stating, “at Domino’s, we are committed to being at the forefront of technology innovation.” So whilst the ultimate objective will always be about increasing customer satisfaction and hence sales and shareholder returns, Domino’s doesn’t talk about technology as solely an enabler or a means to an end (as most businesses do). It sees technology as a legitimate goal in its own right — particularly given its customer demographics (mainly young people).
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Consequently, Domino’s transacts through any device and allows you to track your pizza being made and delivered, including via the Domino’s Robotic Unit — an autonomous pizza delivery robot. More than half of all orders are now placed online. The company facilitates and encourages customers to contribute and/or crowdsource the creation of new pizza recipes and has over a million Facebook likes. Domino’s is unashamedly a technology leader and pioneer — a genuine poster child, if you like. Yet more importantly, the positive outcome from that strategic stance is self-evident in its results.
Air New Zealand
In a little over a decade, Air New Zealand has gone from posting the largest corporate loss in its country’s history to being one of the world’s most consistently profitable airlines and has won airline of the year for three years running on airlineratings.com.
The key to its transformation was twofold: First, a cultural shift to become genuinely customer-centric encapsulated by the slogan “we fly people”; Second, the company’s greatly enhanced use of digital technology — particularly analytics — has contributed to its success. Indeed, to fully underscore its change in orientation, early in 2016, the company appointed a Chief Digital Officer (CDO) and dispensed with the traditional role of CIO.
In appointing former Google executive Avi Golan as CDO, the airline’s CEO Christopher Luxon said, “Avi is going to play a critical role within our business to enhance the new revenue opportunities that digital brings, to minimise our online security risks and to drive customer innovation.”
Air New Zealand uses digital technology to enhance customer experience in many ways including:
- Biometric baggage check-in;
- An electronic “air band” for unaccompanied minors;
- Excellent use of digital media in various forms including its now famous onboard safety videos, including one Middle Earth-themed video that has had more than 15 million YouTube views.
Remember, that’s a global audience voluntarily watching the regulatory compliance safety video of an airline with which the great majority of them will never fly.
GE is a 124-year-old company with a $US270+ billion market capitalisation and nearly $US500 billion in assets (which is 50 per cent lower than five years ago, by design). By any measure, GE is an icon of the US corporate landscape and yet it has totally transformed itself.
Throughout its history, GE has been an owner, user and trader of both industrial and financial assets at incredible scale. At the core of its transformation is the recognition that in the future, the key to ROA is the intelligent use of data through all stages of asset life — from anticipating a need, to design, to manufacture and test, to install, use and maintain, to retire.
In particular, according to GE’s Chief Digital Officer Bill Ruh, predictive maintenance is the key. To do this it has built an immensely powerful analytical platform called Predix. IT analyst Louis Nauges describes GE’s approach as “To connect machines to the cloud and each other, build apps to optimise their use and anticipate incidents and breakdowns”.
Others may regard it as the quintessential approach to the Internet of Things or the fourth industrial revolution.
However you choose to categorise it, GE’s is a pretty phenomenal and ongoing story of corporate transformation and renewal.
UBank is an online-only Australian retail bank. It’s included here not primarily for UBank itself but as an example of an incumbent’s response to the digital era — in this case, National Australia Bank (NAB).
As a 100 per cent subsidiary of NAB, UBank is a bold example of a large, well-established company setting up an entirely new, independently operated business with its own distinct goals, identity, culture and processes that have very little reference to the parent. Key reasons why incumbents tend to resist setting up “challenger brands” is that they fear cannibalising their existing customers and doing so at a lower profit margin than they currently earn.
UBank is a great example of NAB recognising that:
- younger, digital-savvy customers have different financial needs and service requirements;
- as one of four similar-sized major banks, executing successfully as a first mover will win more customers in the target segment away from competitors than it will churn from its existing customers; and
- the combination of a narrower, simpler product suite and far lower cost to serve — no branches or large sales/marketing machines constantly seeking “cross-sell” — offers a totally different customer value proposition (CVP) that will only suit particular market segments.
The key message for other incumbents is that, if you clearly identify market segments of digital-savvy customers with whom you are currently under-represented, create a CVP that matches their distinct needs, use technology to match their preferred way of doing business and give you a lower cost of delivery, you can succeed without any material impact on your traditional, core business.
Service NSW is an ambitious change program that is using digital technology (as well as greatly improved physical store environments and service standards) to transform the speed, simplicity and quality of the interactions between the NSW Government and its citizens and businesses. Bringing Service NSW to fruition has been an enormous undertaking (and remains very much an ongoing journey).
The teams involved have mapped close to 1000 processes and/or customer experience journeys across all parts of NSW Government. To be truly effective, the design improvement process had to consider how each process could be improved not just in its own right but in how an end user would see it in combination with a range of other interactions that may span many government departments — eg. starting a new business, moving house or running a major public event.
Only then could technology infrastructure that not only supports inquiries and transactions, but also maximises the use of analytics and interacts with social platforms, be designed and implemented. While the program is still underway, results to date are remarkable. In the physical service centres, 20 we cent of customers provide feedback and the average score is 4.8/5. This is an outstanding level for any organisation and unprecedented in government — particularly when compared to the experiences that Service NSW has replaced.
GraysOnline is well known as one of Australia’s leading e-commerce sites, particularly for wine. It is part of ASX-listed Grays eCommerce Group, which is Australia’s largest specialist e-commerce company.
But it wasn’t always so. In 1989, Gray Eisdell Timms started out as a modest physical auction house based in Lakemba in western Sydney. It held its first online auction in 2000, disposing of assets from the failed OneTel, and then progressively built its systems and capability over the next decade.
Although it was an early mover in e-commerce (where it has always operated in both B2B and B2C spaces), GraysOnline didn’t have a grand plan from the outset. It grew organically and worked with some fairly rudimentary technology in the early days. Yet over time, it attributes keys to its success as staying very close to customers and their feedback, but also investing heavily in the warehousing, cataloguing and distribution elements of its supply chain — both in-house and with strategic partners.
GraysOnline is a great example of an Australian success story that didn’t spring from a driving vision of a digital future, nor a massive up-front investment. Rather, it navigated an evolutionary path by paying close attention to customers and having a cohesive Board and management team that has been well advised by its shareholders and other key advisers and partners down the years.
Throughout its long history, Disney has been an innovative company, yet has had many challenges along the way. In recent years, its wholehearted embrace of digital technology across its entire business has paid spectacular dividends. In short, it is using technology to put magic back into the Disney customer experience.
There are many ways this is occurring, but one of the most visible is through a personalised MagicBand for every guest at its theme parks and hotels. If the idea of going to a theme park fills you with dread at the thought of waiting an hour for each ride, it’s time to think again.
Disney’s billion-dollar investment has paid massive dividends for customers and the company alike. Through personal, interactive tracking and highly sophisticated real-time analytics, the quality of experience and efficiency of assets have both been greatly enhanced.
Furthermore, with transactions becoming automated and seamless, cast members (staff to you and me) have more time freed up to create more magic moments such as spontaneous birthday celebrations for children they can pre-identify and locate from their MagicBand.
Nor is it just in customer experience where digital’s ROI is evident at Disney. Labour scheduling accuracy has improved by 20 per cent which, spread over 240,000 shifts per week just in its theme parks, represents an incredible payoff. Elsewhere in its empire, store sales are up by 20 per cent following re-design and embedding of digital technology.
Disney’s approach to technology can be summarised as transforming the customer experience, driving operational efficiency, personalising connectivity and cross-channel interaction.
It’s fitting to conclude with Disney as an example. After all, it has probably brought more smiles to the faces of children than any other company that has ever existed — and certainly looks like continuing to do so in ever more clever ways. Magic indeed.
As we reach the end of this eight-part series on leadership in the digital era, it’s gratifying to conclude with some wonderful, yet diverse success stories. These examples are consciously drawn from both the private and public sectors, are of differing sizes and industry segments, capture B2B as well as B2C and, most importantly, differ in their digital origins and strategic alignments.
They have two common characteristics: they know their customers and have a close and dynamic relationship with them; and they are using data-driven intelligence in ever-greater quantities and sophisticated ways to improve both efficiency and customer experience.
This article is the final part of an eight-part series by Orchestrate founder and Which-50 contributor Malcolm Alder and sponsored by Expert360 which explains why business needs to begin on the digital journey.