PRESENTED BY WIRED with Deloitte Digital
Condé Nast and Deloitte Digital have teamed up with leading specialists on Digital Transformation to present Connecting in the Digital Age, a series that will provide an insider’s look at a framework for Digital Transformation, and how it’s been applied across industries and around the world. See how no two transformations are alike, but each shares a common denominator: the power of connection. Here, how tailoring a transformation to both improve the customer’s life and align with a brand’s values means more than just a win-win.
DELIVERING SNAIL MAIL by rocket might sound ridiculous. Yet in 1959, at the height of a national rocket-mania that would ultimately lead to a moon shot, that’s just what happened. A rocket carrying two postal containers traveled from Virginia to Florida in 22 minutes. Mission accomplished. The U.S. Postmaster General at the time said the country “stood on the threshold of rocket mail.”
There was just one problem: By 1959, airplanes were fully capable of delivering letters from America to Europe, sometimes in as little as a day. The people developing rocket-borne mail delivery had overengineered a solution, creating an admittedly spectacular new tool that ultimately didn’t serve the needs of U.S. mail customers.
This story illustrates a common pitfall that often dooms digital transformation efforts today. It’s not lack of ambition — in fact ambition is paramount to successful transformations — it’s lack of clear direction to serve a human need.
“Just because you can use new technology to do things doesn’t mean you should,” says Steven Hallam, Australia lead at Deloitte Digital.
Still, many companies approach digital transformation because they think they should, with outcomes that vary at best. In 2019, one of the top business priorities of many C-level executives in organizations across a variety of industries has been enabling digital transformation. But despite this sense of urgency, many of these efforts come up short: Up to 84% of digital transformation efforts fail.
One reason for the failure? There’s no one-size-fits-all answer to digital transformation, though many business leaders assume there is. Instead, leaders might consider customizing their digital transformation efforts to augment their underlying business in a way that both improves their customer’s life and aligns with their brand’s values.
The Tailored Approach
A tailored digital transformation plan that prioritizes an individual company’s values is as important to a business as the transformation itself. That’s because any digital transformation effort will have an effect on the entire organization.
“How we help organizations decipher the code on how they can transform while still running a business is incredibly complex,” Hallam says.
Deloitte Digital tackles this complexity by analyzing different tactics a company can employ to support an overall transformation strategy on the company’s own terms. The first step: identify a clear ambition. Taking the time to identify that ambition—or desired outcome—is a worthy endeavor, because it’s the critical seed of any successful digital transformation. Maybe the ambition is to disrupt the way people approach saving for retirement. The next step is to align that ambition with a need, which might be connected to how customers are using (or not using) the brand’s existing financial tools. Getting real about the macroeconomic landscape a company works in, uncovering the needs embedded in that landscape, and closely defining how a company’s ambition will meet those needs is an effective start to a successful digital transformation.
The ambition for The Prudential, a life insurance and pensions provider in the U.K., was to guide customers through a regulatory change that allowed people on the brink of retirement to cash out some (or all) of their pension account. Exchanging a pension paid out over time for a lump-sum is a huge decision, usually undertaken with the help of a fund or money manager who can parse the thickets of complicated financial language. Problem is, such guidance comes at a cost.
The Prudential could have passed along the cost to its customers, but instead worked with Deloitte Digital to find a way to make the service free to customers who followed the digital journey. With this ambition in mind, the company envisioned a natural language tool to educate people on what cashing out a pension fund might mean for them.
“We’re trying to design a solution that of course takes cost out for The Prudential, but really what it does is open up a set of services to a set of customers that wouldn’t otherwise be served because they would be priced out of it,” says Sam Roddick, UK lead at Deloitte Digital.
The artificial intelligence powering the tool is the bright and shiny innovation—the rocket powering missile-mail delivery, so to speak. But the technical innovation is applied to a human need distinct to The Prudential’s sector. This kind of tailored approach is crucial to ensure a successful transformation. It also underscores the benefits of approaching a digital transformation on your own terms. After all, both Prudential and its customers gained value through this process.
By building out – then winnowing – several proofs of concept, The Prudential and Deloitte Digital ultimately created a tool that helps customers not only understand the implications of cashing out a pension fund, but also play around with different scenarios. What happens if you cash out all your money? What happens if you cash out only some? Or none at all? The tool empowers customers, helping them feel in control of important financial decisions because facts are presented in an easy-to-understand way — something they might not have been able to afford if they’d engaged a traditional money manager.
The team leading the transformation effort didn’t start by saying AI is the hot new tech, how can we implement it? Instead, they identified an ambition to solve a customer problem, and set about doing so through human-centered design — that is to say with a deep and empathetic understanding of the human needs and behaviors at play.
“We start with the customer experience and work through what matters to the person. Then we try to take advantage of the utility that the technology provides to do things differently and better,” Roddick says. “It’s all about understanding people and how they view the brand and how they want to interact with it.”
Culture is important
But understanding customers and the problems they have—and, therefore, the problems a business needs to solve—can’t happen without the right mindset, something Ohio-based insurance company State Auto discovered in its digital transformation efforts.
The company has been in business for almost 100 years, with sales in 33 states and nearly $4 billion in assets. Yet when Deloitte Digital was asked to assist with a company-wide digital transformation, State Auto was losing both customers and agents to other insurance companies with faster, more accessible technology. On the surface, it might have seemed like a simple solution to just upgrade State Auto’s tech capabilities, but Deloitte Digital considered a more holistic approach.
For a digital transformation effort to truly stick, there needs to be full buy-in from corporate leadership, which sets the tone for the rest of the employees—a tall order for a century-old company with a traditional workplace culture. Internally, this culture manifested itself in formal dress codes and old-fashioned performance reviews. On the customer side, it showed up through arduous sign-up processes due to slow, unintuitive technology.
“The number one reason digital transformations fail has to do with how well organizations orient their structure and culture to do the work. Setting yourself up as an adaptive and agile digital business is the way to go.” says Andy Main, global lead of Deloitte Digital.
Failing to root transformation efforts in company culture is a common mistake; one that can lead to employees feeling left in the dark — or worse, a failed transformation. To get employees to buy into the effort, it’s important to educate them, then scale ambitions while bringing them along as the results take effect.
For State Auto, that meant a measured digital transformation that maintained some of the more traditional aspects of the company– like its commitment to great customer service – while at the same time modernizing the culture, implementing an agile development process and encouraging a growth mindset.
The results? In one year, the insurance company reduced the amount of manually collected information from 70 individual data points to just 14. At the same time, a newfound startup culture, enabled by a new tech platform and agent portal, afforded agents the time to focus on their customers’ needs, bind policies quickly, then deliver them electronically.
“It’s about realizing what your big customer problems are, what’s the purpose of the business in the first place,” says Peter Sayburn, partner at Deloitte Digital UK. “And then using that to aim your digital transformation.”
No rockets required.
Connecting in the Digital Age continues with stories that expand on the power of connection. From elevating the human experience, to forming strategic alliances and creating ecosystems for innovation, to determining value on your own terms, this series will continue to explore the elements of executing a successful Digital Transformation.
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