The Hunt for The Next Big Market Opportunity

The pace at which technologies are changing around us today is frightening. Traditional business models are being disrupted. Such models have historically been based upon scarcity, where value comes from selling a product or service which has a limited supply.  

Digitisation has fundamentally shifted the way in which we think, behave and ultimately how industries organisations compete. When products and services shift from a physical form to being available on digital means, they can be produced and distributed at scale with little or no marginal cost. They are no longer in limited supply and can be made available to consumers at fraction of the cost, in vast quantities. Importantly this may result in a significant uplift in the type and level of experience offered to customers.

In order to take advantage of the opportunities which are in front of us today, organisations need to think, act and be different. This requires a different type of organisation.

 

Organising for Success - Why?

So taking a step back, traditional firms and organisations have built their foundations based on team and departmental structures. With such structures comes friction and tension between seemingly complementary areas. This often manifests in teams, whose goals are on paper tied to the organisations objectives but their behaviours in practice are very different e.g. a "Silo" approach. Putting it simply, such organisations have not been organised for success.

This can often lead to:

  • Unclear or misaligned roles and responsibilities across the organisation.
  • Internal teams being unclear on how their role ultimately contributes to experiences being provided to end users or customers of the organisation.
  • Outcomes derived from such teams being sub-optimal or non existent.
  • Products and services not gaining market penetration and acceptance as expected.
  • Products and services launched which result in poor customer experiences, support and on going maintenance.
  • Increased issues relating to the quality and perception of the organisations products and services e.g. incidents relating to digital services being fully functional or available to customers at peak times of the day.

 

Organising for Success - How?

Value Creation Risk Reduction InfographicOrganise End to End By Products, Services or Customer Experiences

Organising teams in this way requires a shift from traditional functional structures to one which puts the customer journey at the heart of the organisation. This is primarily driven by having cross functional, multi disciplined teams tasked with solving customers greatest problems - all through the lens of the services and experiences which a customer receives.

So what would a cross functional team look like? A key role would be that of a product / service owner who is accountable to the end to end product and service. This person would be supported by a number of capabilities including:

  • Marketing
  • Design (UI/UX)
  • Engineering
  • Finance 
  • Risk & Regulation
  • IT and Business Operations
  • Analysis
  • Information / Cyber Security
  • Data and Analytics

Organising teams in this way also has secondary benefits, for example in the UK, banking regulators such as the Prudential Regulatory Authority (PRA) and Financial Regulatory Authority (FCA) have outlined the need for financial services organisations to be operationally resilient. Specifically such organisations need to be able to continue to deliver key services in light of stress or operational disruption.

Recent guidance from the financial services regulators has suggested that organisations need to look through the lens of key business services. Why? Because doing so starts with the consumer (and in this instance, the economy) in mind e.g. if a key payment service is unavailable for a major bank and their are no contingency measures, consumers (and therefore the economy) are likely to suffer as salary, mortgage and bill payments may all be delayed.

So herein lies the opportunity - by organising teams around key products, services and experiences, we can delight our customers with features which address their 'pains' but by doing so we can also ensure that those same services are secure and resilient. The Product Owner ultimately becomes accountable for driving great customer experiences which are secure and resilient. 

 

The Potential Challenges

Organising teams to be aligned to products, services and experiences can have huge advantages in establishing a customer centric organisation. The potential size of the undertaking should not be underestimated as there a number of sizeable challenges:

Culture: Most companies are not organised in an end to end manner which 'cuts across' traditional organisational boundaries. Adopting such an approach fundamentally changes the accountability, dynamic and culture within a company. This effectively re-engineers the way an organisation is structured and operates. Delivery of this change therefore requires strong leadership, communication and co-ordination.

People and Process: Accountabilities, roles and responsibilities will all have to change. New concepts such as end to end process, service, product and experience ownership may need to be established. Supporting processes may need to be realigned which may in turn cause further friction and drive the need for coordinated change.

Data: Data needs to be collected and made available in alignment to i) products and services or ii) customer experiences. Herein lies the problem, many organisations lack the capability to report end to end across these components and therefore would require investment to correct and address these gaps.  

Technology architecture: Traditional technology architecture is based upon 'monolithic' applications. That is very large single application which is used by all parts of the business to serve its customer base. In today's fast pace environment, making frequent, coordinated and well tested changes to such applications can be a significant undertaking. As a result and in support of a product and service based architecture, many organisations are moving to the use of micro-services in order to better isolate, develop and scale their applications. Moving from a monolithic to micro-services based architecture can be a significant undertaking for an organisation.

Keeping the 'lights on' and continuing to run your business: If the change is introduced too quickly, it can have a significant operational impact on your business today, resulting in loss of revenue or customer trust. Move too slow and the opportunity may pass you by.

 

What Can You Do - Small Steps?

For many enterprises, shifting from a departmental structured organisation to one organised around customer experiences, products and services, is likely to be a significant undertaking.  Some small steps can be taken to move an organisation along the journey. These include:

  1. Identify the key experiences, products and services which you deliver to customers. Define how they enable you to serve your customer base and deliver your business objectives.
  2. Identify the business processes (the things you do internally) that enable you to deliver outcomes to your customers.
  3.  Agree an end to end ownership model experiences, products, services and the underpinning business processes. Organise your teams around this model.
  4. Define, implement and monitor key performance, key risk and key control indicators across experiences, products, services and the underpinning business processes. Use data to drive continuous improvement across these areas.

These steps could be further tailored by focusing on specific experiences, products, services or business processes (rather than the whole organisation). Doing so provides benefits of identifying early learning, quick wins or adjustments needed in order to scale to the rest of the organisation.

 

That's agile thinking after all....

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