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Published: May 28, 2013
 / Summer 2013 / Issue 71

 
 

Don’t Reengineer. Reimagine.

This new group is prototyping an application for parents of newborn infants that can help families bring their babies home as soon as possible. All too often, new parents don’t feel ready and armed with the right support to take their infant home. This app lets them leave the hospital sooner, because it provides educational content, support, and live video chat with nurses when needed.

Energize the Culture

Tackling the culture is the final digitization principle. The toughest part of becoming digital is creating the cultural norms and ways of doing things that enable sustainable change, especially at very large companies. These changes are likely to be extreme. Thinking and behaving with an orientation toward customers represents a major leap from the product- and channel-centric approach on which most corporate cultures have been built.

The sporting-goods retailer Sports Authority took on this task in 2010 by redesigning the branded experience from the consumer’s point of view and building the necessary digital “omni-channel” capabilities. The new behavior that went along with these capabilities then sparked a culture change. Rather than simply letting its e-commerce efforts stand alone, the company focused on maximizing the entire business through digital capabilities—reimagining its advertising, shopping, and delivery experiences. It was critical to use digital capabilities to drive store traffic, not just online revenues. Sports Authority teamed up with Google to create virtual online inventories for customers of the merchandise in each store; it optimized store websites to gain better search response; and it experimented with digital partners such as Shopkick (a mobile app that provides rewards and offers when customers walk into retail stores) and Foursquare (a location-based social networking app that helps people engage with nearby retailers). The company also deployed additional omni-channel capabilities in many stores, including ship-from-store systems (which turn stores into local distribution centers for pickup and delivery).

One key to changing Sports Authority’s culture was allowing customers to buy on any channel they preferred—whether digital or in-store—and then compensating store managers for all e-commerce sales in the zip codes of their trade area. At the same time, the retail chain raised its revenue targets, and required units to report on the direct and indirect sales impact of every channel in weekly business reviews.

The new approach proved that a vibrant digital presence could revitalize all aspects of a company’s business, including its non-digital channels. It produced a shared sense of purpose among store-based and online staff, a willingness to experiment in order to boost sales across all channels, and a “fail fast” culture that is eager to learn from risks and experiments.

The ultimate goal of reimagining your business is to transform it into a more customer-centric enterprise. This is an exhilarating process for most companies, once it begins in earnest. It brings together business and functional leaders, employees and customers, global and local managers, and the seemingly disparate practices of analytics and creative ideation. Companies that move from reengineering to reimagining will be in a far better position to benefit from the new world of digitization. 

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Author Profiles:

  • Jeff Schumacher is the managing director of Booz Digital. Based in Los Angeles, he specializes in digital strategies for companies in consumer markets. Previously, he was executive vice president and chief marketing officer of the Sports Authority.
  • Simon MacGibbon is a senior director with Booz Digital in San Francisco. He helps companies design and realize transformational customer experiences through digital capabilities and data analytics.
  • Sean Collins is a senior director with Booz Digital in Los Angeles. He helps CXOs define and execute digital growth strategies.
  • Also contributing to this article was Booz & Company partner and Booz Digital senior director Matthew Egol.
  • Booz Digital is a full-service team of strategists, designers, and technologists focused on the relationship among ideas, digital platforms, and transformational businesses.
 
 
 
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