30, 27 and 28, are the percentages of baby boomers, gen-X staffers, and millennials in our workforce today, respectively, according to a study by RainmakerThinking. KPCB rates this as even more in favour of millennials, at 35 percent, with gen-X and baby boomers sharing 31 percent each.
What does that imply? Plenty. The way employees and customers from these three generations make purchases, and approach work, have significant influence on the strategies your organisations must effect today and tomorrow. Catering to the different needs of multiple generations also has a sizable impact on your company’s digital strategy.
Here’s the first ramification: For the first time—primarily because their numbers are close to parity—organisations now have no choice but to implement a three-pronged digital strategy, one that’s aligned with the needs and expectations of customers, employees, and partners from each generation.
But first, why have a digital strategy? Because without one you ignore potential revenue, close your business off from higher levels of productivity and efficiency, and hurt the image of your brand.
Having a digital strategy, says a Cognizant report titled 'Asia Rising: Digital Driving', “could propel revenue growth by more than 13 percent by 2017.” And according to another study by McKinsey, 'Cracking the Digital Code: McKinsey Global Survey', 71 percent of C-suite executives believe that going digital can increase top-line revenues, while 64 percent say it could increase profit margins and 49 percent believe it could reduce operational costs.
McKinsey also estimates that digital technologies, including big data, the internet of things, cloud computing, and mobility, among others, could have $220 billion to $625 billion in annual economic impact for Southeast Asia by 2030.
And for digital companies like Uber, Grab, Airbnb, and mobile-wallet companies, digital has created business models and wealth that were once unimaginable. Key to accessing these benefits is leveraging digital correctly. That, in turn, requires strategy—from deciding operating models to affixing investment priorities, as well as lining digital up to generational differences.
According to a study by MITSloan, “strategy, not technology, drives digital transformation.” That’s the realm of boards and CEOs, and not the IT department.
What does creating a digital strategy mean? It means having discussions around vision, setting direction, aligning resources at the right time, and making commitments. It requires having the answer to questions like: What’s the driving force behind our digital metamorphosis? Customer experience, top-line growth, our product innovation? Other questions include: Should we build a digital governance model first, like Asian Paints, or develop digital silos and stitch together our efforts with management practices, like Nike?
Key to answering these questions is revisiting an old question: Who is our customer? Customers from different generations interact with businesses differently, even digitally. Take the way customers search for data before making a purchase. As marketing teams will attest, some generations prefer online FAQs, while other generations turn to peers for real-world experience using social media. And yet others prefer the immediacy of accessing experts using online chat apps and chat bots.
Meeting the purchase needs of each of these generations requires investments in different areas. The same applies to internal employees. Staffers from different generations learn, make decisions, and approach work in different ways—requiring multiple strategies for future-ready companies who want to be ready for digital disruption.
An important question for board members, and business leaders setting strategy: Where do we start? How do I get my company on the digital 'yellow brick road'?
Two of the primary aims in guiding any organisation are to optimize risk/reward ratios while ensuring investments and resources deliver expected returns. In the digital world, that translates into creating and maintaining quality of engagement at the core (internal systems/processes, “systems of record”) and at the edge (customer-facing touchpoints, “systems of engagement”).
Traditionally, digital transformation started at the edge of the enterprise, at the confluence of businesses and customers. Many digital journeys are initially driven by marketing and sales departments who are trying to align to new—digital—customer expectations.
But that’s only a start. To gain real, deep, long-term benefits from going digital, enterprises—led by a few stakeholders at first and then driven by a larger majority—must drive digital inside their organisations, forcing it to percolate into every function, process and idea. After all, the digital experience is key to engaging millennials and a growing share of generation-X employees and customers.
For all employees though, embracing digital will create increased efficiency and productivity. It will offer them more mobility, and greater flexibility. But getting them ready for digital will take work. Today, having the right education and support skill sets is among the largest challenges reported by companies that have gone digital.
Imparting these skills requires different strategies for different generations. Baby boomers, for example, expect hand-holding and classroom training. And all employees, immaterial of generation, will have to adapt to new ways of working and thinking, requiring organisations to work along multiple change-management vectors.
For customers, working with digitally disruptive companies will mean finally getting what they want, how they want it, and when they want it. They will expect all of the benefits of digital including speed, accuracy, personalization, and transparency.
To provide this, companies will need to be able to reframe their businesses, and their people, technology, and processes. They need to re-think what they are delivering, how they are delivering it, and the pace at which they can upgrade or refresh their offerings during its lifecycle.
It will also mean addressing other generational differences. Older generations, for example, are used to owning things (they buy software). Younger generations are used to accessing (they access or subscribe to software) and not owning things. At the same time, building loyalty among the younger generations is difficult; their loyalty is fickle and is based on being disappointed by slow-loading webpages or non-intuitive mobile application interfaces.
There’s another important area digital disruption will affect: Security. As businesses embrace digital more deeply, their security professionals will have to come to terms with being able to work, in the background, under almost any circumstances. Where once, security professionals blockaded projects because of security fears, they must now find new ways to securely enable both digital systems of record and digital customer channels—without holding back the business.
Going forward, boards need to tackle creating a digital strategy that is aligned to the needs of multiple generations head on—while keeping risks at an acceptable level and ensuring returns. It’s key to realise that the path ahead is not always clear and that they will have to encourage their businesses to take risks. Some of those risks may not pay off, but it’s important to fail fast and forge ahead.
If all this seems like a tall order, that’s because it is. And right now Singaporean companies, for example, are struggling. According to a 2016 digital transformation study by BT, 92 percent of organisations in Singapore, say “their current infrastructure is struggling to support the rapid adoption of digital technologies.”
We are, as they say, a product of our times. Your digital strategy should be, too.
James Walls is the product marketing director for IT as a service at Dimension Data Asia Pacific.