Zalando, founded only in 2008, now employs more than 11 000 tech savvy people across 11 offices and four European countries. Gaming company Supercell grows to be so attractive that a Chinese company buys them for EUR 6.4 billion. Scandinavian clean-tech companies are growing exponentially worldwide. All inspiring news from Europe, right?
How about these? Ericsson lays off 3 000 people due to “fast technology shifts and digitalization of the telecom industry”, but stating simultaneously that they plan to recruit 1 000 people in their R&D sector in Sweden. Google’s Country Manager in Finland, Antti Järvinen, criticizes Finnish companies for a lack of courage in exploiting the opportunities of digitization. There are demonstrations in many European countries, for Example in France and Finland, about suggested changes to employee rights like, for example, on the daily working hours. Not as inspiring news, now are they?
Whether we like it or not, the division in Europe, and the rest of the world, between the winners and losers of digitalization is becoming ever more evident. Thus, companies in Europe, and elsewhere, should take these news seriously, as they contain the recipe for ensuring that the company belongs to the winners. Here is that recipe:
1. Understand customer needs, a solution to it and enable piloting
The explosive growth of cleantech companies is a good example of how new global markets can be found when placing the customer at the centre of business development. Once you understand the customer need and find a scalable solution for that from business point of view, a real opportunity to succeed has been created.
Same goes for existing industries and businesses. Once you dive into the understanding of real customer needs – and think outside of the box – you can often find new and better solutions for the same need in this digital age. Good examples of this are Uber, Airbnb, and Tesla.
What is essential to the ability to digitalise your business is the pace you have in testing of ideas and implementing the ones that work. You need courage to put your product or service out there – and do it fast. The courage is essential because you cannot know in advance which solutions will eventually serve and function the best way. When the entire organization is customer centric and focuses on improving customer experience, conditions are created for a business to further develop and grow. Hence you need an agile and customer centric process to pilot new solutions and scale the ones that are a success, and fail fast with the ones that are not.
2. Find the right competences
Both Zalando and Ericsson are good examples of how competences needed have changed. Organisations must obtain and retain people that understand digitalisation, its possibilities and are willing to roll up their sleeves and get stuck in to explore the unknown and implement the change needed. New skill-sets must be trained and new people with the right know-how recruited. Without the right know-how, the necessary change towards digitalisation and growth will not happen. In short: make sure that your staff has the right competences.
3. Create growth together
The Industrial Revolution brought with it the measurement of effectiveness with time. In some industries – such as the manufacturing one – the concept of time based effectiveness may still be a necessary attribute. Similarly, it may be that a hierarchical leadership model is still the way forward.
I dare to argue, however, that in this changing world where digitalisation continuously offers new opportunities to accomplish things – a good example is robotics – measuring the effectiveness of work in hours often turns out to be wrong and an excessive hierarchy of the organization unnecessary.
Instead of spending years arguing about whether we should extend the working hours per day and having demonstrations about these kinds of issues – as has been the case for example in Finland – perhaps a more effective solution would be asking the employees how they would like to help the company to develop and grow together? Being agile together usually works best. So build an inspiring, motivational corporate culture that is as transparent as possible, and don’t forget to add committed, cooperative partners that share the same values to the mix.
4. Make use of technology and data
Supercell’s success is not a coincidence. The company has trusted data it has obtained from its applications and elsewhere in order to understand its customers. Through data they know where and how new players can be acquired and how the ones already playing their games behave. With this data the company has been able to make player acquisition as effective as possible, and, above all, maximize the customer lifetime value of each player.
This type of data is available for every business today. To be able to collect such data, you need the right technologies and capability to manage and analyze the data sets. Once this is in place, the data can be used to start building a comprehensive understanding of the customer journey and experience in order to make customer acquisition and lifetime value as good as possible while making the customer experience better at the same time.
5. Create demand and capture the existing one
Since working in Finland, I can see how our market works in a greater detail. According to several international studies, we Finns know how to innovate. But for some reason, we don’t feel comfortable about commercializing innovations to the same extent as many others. Still in 2017, in many Finnish companies marketing continues to be seen as an expense rather than an investment. Is this due to the lack of courage as Antti Järvinen states?
In Sweden, for example, investments in marketing even in times of recession were evident, and the result is a well growing economy today. This year alone, the media spend in Sweden is expected to grow more than four per cent.
So, why not make innovation a commercial success story where ever you may be located? Create new demand and capture the existing one by taking advantage of marketing technologies and data available. By doing this, you will enable your company to grow as efficiently as possible.
Build your own Business Growth Engine!
The digital transformation is all about ensuring and accelerating business growth. The transformation starts with understanding the actual customer needs and finding solutions for them. If one particular solution is better than others in the market, and you are able to scale it exponentially, the foundation for growth has been created. Once that happens, it’s time to build a growth engine. Here is what you need:
- The right partners, talents and competences.
- A customer centric organization and a culture of working together.
- The right technologies.
- Data collection, management and analysis.
- Agile service and product development, piloting and scaling.
- Data-driven brand and content marketing.
Building a Growth Engine does not happen overnight. It is constructed in small pieces and tangible milestones, in an agile manner and creating growth all the time during the process.
We here at Nordic Morning Group help our customers create growth by helping them build their own Business Growth Engines. If reading this inspired you and brought ideas on how to accelerate growth in your company, please don’t hesitate to contact us to find out more!
By: Jukka Sundquist, Managing Director, Klikkicom Oy