I touched on it briefly in the last article, but it’s essential that you understand both the root of what is happening, and its full ramifications.
The Big Idea
The industrial age was defined by the ability to produce a mass product for a mass market. Everything about the industrial age centered around scale. The more efficiently you could acquire raw goods, produce your product, market it, sell it, and distribute it — the more successful you would be in the market.
Everything centered around optimizing the supply chain and business processes that supported these motions. Collectively, I call this the optimization of the core.
And every ounce of efficiency you could wring out of the core dropped straight to the bottom line as profit.
The fact that optimization of this core drove profitability and market success spawned many of the movements and investments that we know well today. You can trace the adoption of things like Six Sigma and Lean, not to mention almost every single technology investment enterprises have made since the introduction of modern computers, to this need to optimize.
And the better you were at it, the more successful you would become. Companies as varied as Walmart, Toyota, and Proctor and Gamble all built and leveraged an optimization capability to market dominance.
It was basically a sure thing.
Until it wasn’t.
As we entered the transitional period that began ten to fifteen years ago (depending on how you count it) between the Industrial Age and the Digital Era, this paradigm was flipped upside down as upstart tech companies began to disrupt long-standing industries.
But think about any organization that you consider disruptive. Did they disrupt an industry and its market leaders by out-optimizing their competitors?
They were disruptive because rather than focusing on optimizing the core, they were, instead, focused on optimizing the customer experience.
What you will find as you look at any disruptive organization is that rather than focusing on their internal operations first and then radiating outward, they focused on creating, curating, and sustaining a differentiated customer experience that would set them apart in the market — and then allowed that to dictate everything else.
This is why I believe that just as we defined the Industrial Age by our ability to build and sustain world class supply chains, we will define the Digital Era by our ability to build and sustain what I’m calling the new Digital Experience Supply Chain.
And whereas traditional supply chains had the product at the center of the process, the digital experience supply chain will have the customer at the center of the process — and will demand that traditional enterprises continually transform their business models, operating models, and structural and work models to support this focus.
Other than the customer-centricity, this need for continual transformation is the biggest difference between traditional, linear supply chains and these new, iterative digital experience supply chains.
Once you realize that you need to create and sustain a differentiated customer experience, you quickly recognize that you’ll need to transform your business model to support it. And once you figure that out, you’ll rapidly understand that you’ll also need to transform your operating models, structural models, and work models to support your new business model.
But it doesn’t stop there.
What this is really all about is a shift in power away from the company and its drive for efficiency, and to the customer and our insatiable desire for solutions delivered on our terms. (Can you imagine a modern day Henry Ford telling his customers that they could have any color as long as it was black?)
And the moment your customers get the smallest taste of that control, of that power, what do you think they want? Yep. They want more of it.
That means that going forward, your business model, operating models, and structural and work models will be in a constant state of transformation — all centered around your need to create, curate, and sustain a digitally-powered customer experience that will allow you to win in the market.
Welcome to your digital future where the customer experience is at the center of everything.
I admit that this is all a lot to digest. And I have bad news for you. The more you dig into this, the more you think about, the bigger it gets. With every layer of the onion that you peel back, you see with evermore clarity just how massive the ramifications of this shift will be to both organizations and to each of us individually.
The Next Step
Frankly, I believe it is this enormity of impact that is stopping most people and organizations from really diving into all of this in earnest.
But that’s not you.
You signed up for this journal precisely because you knew (or at least suspected) that this was big and didn’t want to be caught unawares. So here’s this week’s exercise.
With a spirit of curiosity, identify one part your role within your organization and unpack the implications of refocusing it all around the customer experience. Then start peeling that onion, layer by layer. How could you remodel, and re-envision your own role, and business model to transform your customer’s experience? What impact will that shift have on your operating models? Do this for just one small piece of what you do.
And once you’re done with one round, ask yourself, how might the customer’s expectations change after the first transformation of the experience? And go through the cycle again. Just keep on peeling.
Feel free to stop when your eyes start to water—or perhaps pause, wipe them, and continue. It’s all your choice.