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 / Summer 2013 / Issue 71(originally published by Booz & Company)


Don’t Reengineer. Reimagine.

To realize the digital potential of your business, bring the dynamics of a startup to scale.

What does it mean to become digital? Companies in all industries are building online businesses, enabling new customer experiences, experimenting with “big data,” and seeking advantage in a digitally enabled business environment. They have tried reengineering their practices; they have set up new technological platforms for customer engagement and back-office efficiency. But these efforts have not yet had the impact that they should. Instead of reengineering, they need reimagining. They need to conceive of their business freshly, in line with the capabilities that digital and business technologies can give them, connecting to customers in ways that have not been possible before.

Reimagining your business means creating many of the conditions of a startup—the sense of freedom, flexibility, and creativity—but at the scale and with the discipline of a large enterprise. You bring together cross-functional teams who can ideate, bring to life, and execute a truly digital user experience. You take a customer-centric approach to everything your company does—including innovation, user experience (UX) design, marketing, promotions, sales, operations, and customer service. You convey a distinctive brand identity and emotional connection that’s present in storefronts, websites, smartphones, connected devices such as high-tech fitness wristbands—and forms of interaction still being conceived. You use big data and analytics in all their forms to deploy insights from customers in real time, designing and marketing products and services that respond instantly after sensing and analyzing what people do online (and off). Reimagining your business also means continually measuring and testing the impact of these products and services, and learning from the results.

In the digital world, time really is money. Companies no longer have the luxury of carefully developing requirements for new products and services or for bureaucratic stage-gate approval processes. Nor can your digital presence be bolted onto your company’s current way of operating. Instead, it must be a natural reinforcement of your company’s brand, its positioning in the market, its core value proposition, and the capabilities you already have. The digital presence must also be a viable contributor to the business, with significant revenues and profits accruing almost from Day One.

Admittedly, the first steps in this transition aren’t easy. Becoming digital requires a new way of thinking. Moreover, the exact set of capabilities needed to get there will vary from company to company. Nike Inc.’s direct engagement of consumers, linked closely to the development of new apparel and fitness-related devices, involves a completely different approach from Aetna Inc.’s rethinking of its patient and customer experiences. But there are five basic principles of digitization that any company can follow to help reimagine its business and drive growth: Empathize with end-users, expand the brand and the value proposition, design for three years out (but build for today), build new structures and teams, and use digital  technology to energize your culture.

Empathize with End-Users

To unlock the value enabled by digital technology, companies need to focus first on delivering great experiences to customers. Don’t just build connections between customers and your company. Enable them to engage with one another. In the process, habitually capture insights about what customers think of your products and services, what matters to them, and what consistently irritates and enthralls them. Then feed these insights back into your innovation practices as well as customer service, marketing, advertising, and promotions.

To see and understand your customers’ problems, you must be able to fully empathize with the end-users of your company’s systems. Develop an ongoing sense of what your company’s products, services, and brand look like from their point of view. The word empathy derives from the Greek words for in and feeling. Digital technologies give companies a way to empathize, or to adopt others’ feelings as their own. They can provide a much closer connection between you and your customers than the marketing methods of the past did. When consumers have problems that need to be solved, or aspirations that your company might satisfy, you are now equipped to meet that challenge proactively.

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