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Digital experimentation can turbocharge Kiwi success in the new world
Covid-19 has meant businesses need to adapt to survive, and Ross Parker from Vodafone writes we should embrace digital tools to experiment, foster innovation and meet changing consumer expectations. He argues the organisations that embrace new tech principles and digital adoption will ultimately offer a better customer experience and therefore succeed.
One of the coolest elements of the new digital world is the ability to adapt quickly, or “pivot” in often-popular tech jargon. While the old Silicon Valley adage of ‘move fast and break things’ may bring all sorts of negative connotations, the underlying philosophy of experimenting and learning at pace remains true – and it’s become increasingly clear that flexible, innovative businesses are more likely to win in a world adapting to operating alongside Covid-19.
There are a number of great Kiwi businesses that are adapting to the new world - such as My Food Bag offering long-life food items, Les Mills scaling up its online exercise platform and Sal’s Pizza adopting a SMS service to complement online ‘click & collect’.
Easy to say, but how does it happen? Fostering a culture of experimentation is about responding to changing customer needs, and learning from both the positive and the negative. It means drawing lessons and adapting once data-driven insights become clear. Because humans are very complex animals who often behave in surprising ways.
Here are some provocations for New Zealand businesses as we all adapt to new ways of working, and the principles we’re trying to embrace at Vodafone NZ.
Online experiments enable winning businesses to test, iterate and adapt
While there should always be a place for strategic consumer research, it is fascinating how Expedia Group is rethinking innovation. A recent Harvard Business Review article quotes CEO Mark Okerstrom as explaining “At any one time we’re running hundreds, if not thousands, of concurrent experiments, involving millions of visitors. Because of this, we don’t have to guess what customers want; we have the ability to run the most massive ‘customer surveys’ that exist, again and again, to have them tell us what they want.”
Thinking about digital tests, or experiments, as high potential market research, instead of distinct projects, is something many New Zealand businesses could benefit from. These can also be a lot quicker and more cost-effective to implement, and you learn as you do.
Testing propositions through traditional research can often bring about research bias - but by actually implementing new products and services, and seeing how real customers react to those products and services ‘in the wild’, we gain rich insights that we can innovate on.
View failed tests as providing valuable lessons, not wasting time
A common business challenge is overcoming the view that a failed experiment was a wasted one - because instead you often learn more from tests with unexpected results. Some of the world’s most important inventions – such as penicillin – were discovered by accident. So while sometimes a 'game-changing innovation' can fail, often they lay the foundations for much better and even unexpected ideas to emerge and flourish.
There are examples the world over - with some of the higher profile products failures being Apple Newton, Google Glass and the Amazon Fire Phone - but all of these offered valuable lessons about technology and how people actually use things in real life. Great products and services aren’t designed in a lab or office – they are designed by observing customers.
On a much smaller scale, encouraging your people to take risks is important, even when failure is a significant possibility, but it’s even more important how you build upon any setbacks to come out stronger. This means examining in close detail why a certain test failed - and using data-driven insights to draw conclusions on what to do better next time.
Foster curiosity and adaptability within teams to encourage innovation
Being inherently curious - or actively reminding yourself to ask why - is critical to organisations being able to succeed in digital experimentation. Often this comes from the surprising results and the outcomes you weren’t expecting.
The Harvard Business Review highlights Booking.com, which reports just 10 percent of its experiments generate positive results - but estimates it runs more than 25,000 tests a year. So if 2,500 of the experiments are successful, that’s a whole lot of innovation and enhancements going on in any given year. Lukas Vermeer, Booking.com's aptly-named Director of Experimentation, says: “The people who thrive here are curious, open-minded, eager to learn and figure things out, and okay with being proven wrong.”
This is a principle I try to instil in my team - being adaptable, resilient and able to deal with high levels of ambiguity, while shaping ideas and solutions at pace.
So we're hiring people who can work fluidly between different roles and who are inherently curious. We don't need silos because having a breadth of capability will enable us to adapt quickly to changing customer behaviour. We're hopeful this will also create a better workplace, offering our people the chance to iterate and grow their skills.
Enhance everyday operations via new digital tools
To create a culture of experimentation, and testing to learn, businesses often need to think digital first. By that we mean start with how a customer might be able to solve a problem or perform a task using a digital or online tool. And one of the key ways is examining how new digital tools can be applied to more traditional ways of working.
If necessity is the mother of invention, surely 2020 and all its curveballs will be good for our collective innovation skills. This was evident at Vodafone when lockdown meant offices closed, and stores in alert Levels Three and Four were shut, so with just a few days’ notice all staff needed to work remotely.
So we adapted. In late-March, this involved reassigning almost 370 retail staff into digital customer service roles, utilising their deep product knowledge to solve customer problems via online channels such as live website chat, virtual stores and social media support. And offering training via video calls, in a matter of days.
As phone calls to our helpline increased and wait times rose, we asked customers to try digital self-service options first. We quickly enhanced these online tools, ultimately seeing interactions with our chatbot, TOBi, increase 550 percent while satisfaction remained at similar levels.
We’re now applying these lessons into how we can digitise other parts of our operations. From including more AI in our network operations, to applying robotics to quickly issue credit notes to customers. Enhancing our digital-first capabilities will help us transform and will provide customers with better, safer service options.
Always base decisions on data, but use instinct to innovate
To be really successful, businesses need to commit to making decisions based on data - not on what the most senior person 'thinks' might be the case.
While instinct traditionally ruled the boardroom, in today's world most board directors want to see the facts and the data behind the decisions. By experimenting, and taking the results to inform the next test or decision, companies will be much better placed to succeed in the new, digital world.
However this doesn’t mean ruling out instinct - because often the best innovations come from lightbulb moments or a side conversation. It just means drawing on ‘gut feel’ to innovate, test and gain data to then inform the next step.
Importantly, the key element is fostering excitement and a desire to constantly iterate and improve - or at the very least survive the challenging times such as we find ourselves in now, so that you can build a better future state and grow into the future.
Digital experimentation will enable business processes to improve, and offer better customer experience outcomes, ultimately enabling companies to thrive in a rapidly-changing world. Digital experimentation can turbocharge Kiwi success in the new world.
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