by Paul Scott, Director and Board Advisor at Digital Village
Payment Platforms are often referred to as the rails on which commerce transacts. It’s an interesting analogy, given the gauge of rails used today on most of the world’s train tracks were established by the Romans over 2,000 years ago, and has not changed significantly since in most parts of the world. Payments Platforms haven’t been around for the equivalent of seconds, but we have multiple incarnations, and none entirely seems to meet customer needs.
Technology can be tricky bedfellow. Take payment platforms for example. Before ‘digital’ was even a twinkle in John Vincent Atanasoff’s eye, banks were using multiple payment reconciliation methods — all paper-based of course. Records were kept in dusty ledgers scribed with ink pens by crusty men in starched shirts and voluminous morning coats.
Roll forward 90 years, and here in Australia, we have an abundance of digital payment platforms. Which is odd, because usually when technology replaces manual processes, you’d expect some degree of consolidation, streamlining and a leap forward — innovation perhaps.
Eftpos was born some ten years later and stands for electronic funds transfer at point of sale. It’s principally aimed at credit, debit and payment terminal transactions. Its also owned by the big four banks via a company called Cardlink.
BPAY was established in 1987 by the big four banks in Australia. It was the world’s first phone-based payment system. Nowadays its a full-blown digital bill payment platform.
The New Payments Platform is owned by 13 banks. It’s the new kid on the block, formed in 2013 and launched to the public in 2018. They were given an innovation mandate and launched an instant settlement process which uses phone numbers, email addresses as well as ABN’s.
Between them, each of the three principle payment platforms serves every business and consumer in Australia, but why three? Well, it’s a result of several factors, federal, industry institutions, regulators and the banks all had a hand to ensure the applecart remains upright.
Now there’s a move to seek consolidation, but just how long that will take and what the composition of the outcome could look like is anyone’s guess. There’s a bucket-load of vested interest and the glacial pace of change in banking to consider. In their wisdom, Australian Payments Council chair Robert Milliner has been appointed as the independent convener of a special industry committee examining NPP Australia’s proposed merger with BPay and Eftpos.
Not content with the existing complexity APC’s decided to have Milliner’s committee operate within a NPP-owned subsidiary, Industry Administration Committee Pty Ltd (ICA).
The purpose of ICA is to establish a governance framework for “making non-binding recommendations” on the merits of merging NPP Australia’s operations with the two domestic payments schemes.
The technology aspect of this is interesting. It’s a classic case legacy myopia. The core systems underpinning BPAY and Eftpos are 40 years old. Ask any digital solution builder what they’d recommend its likely to be ‘Reno’ versus ‘Doer-Upper’. In other words, it would be easier, quicker and better to build from scratch. Why? Because it takes 1/10 of the time to build the equivalent of 40 years ago and costs a fraction of what it takes to consolidate and build on top of existing computer code.
Speaking to people like Andrew Walker — the Impatient Futurist and you understand the logic. He’s spent a career showing retailers, banks, and insurance companies that building and consolidation on top of old systems is a waste of money and never delivers the desired outcome. Better to start with a blank screen, start solving one problem at a time and deliver outcomes users need.
Likewise, a senior executive in one of the three principal platforms explained it as follows: “Another industry insider concluded: “I feel the big four banks, in their current form, are not good for Australia, particularly over the longer term. They need to innovate, with a view to extending their business into a ‘platform’, with open support and collaboration for new entrants. An ecosystem if you will. Only this will deliver useful products and services to the Australian market and ensure the ongoing relevance of the big 4.” He concluded: “Otherwise, bring on the ‘asteroid’ for these dinosaurs.”
What happens next? Well, major shareholders in each of the platforms — the banks — will examine the landscape, sound out the regulators and oversight boards and decide what they can get away with. Sorry, I mean they will have an epiphany, recognise the extraordinary opportunity they have to leap forward with a new technology solution to payments people want and need. Maybe.
by Suraj Pabari, Partner in Customer Analytics at SingleView, a data consultancy in Australia.
We can use RFM scores to define segments within our customer base.
These segments can be used to define relevant actions that we can take with customers to increase their overall lifetime value.
Key segments include ‘Superstar’ customers with high RFM scores, for which you could develop a premium service; ‘Promising’ customers with mid-range frequency and monetary value, for which you can run loyalty schemes to increase spend and frequency; ‘At Risk’ customers with low recency, for which you can send targeted messaging with a possible discount to bring them back.
Run experiments to test these different ideas, and start by focusing on the largest audiences that will drive the greatest impact, with clear success metrics and the next steps to scale the action.
How can I take action using lifetime value scores?
As you can see from the previous post on RFM segmentation, it is quite easy to get excited with your new RFM scores and to start generating elaborate experiments. However, the goal of any new project should initially be to keep any action simple and easy to implement.
The main action from the RFM scoring is to create a few key segments. You want the segments to be large enough in scale so that you can actually see a difference when you run experiments using the segments. You also want to make sure that the segments are updated on a regular basis, and easy to export, so that you can easily integrate them into your marketing platforms.
What segments could you create? I often focus on the following three segments, as I have found that running experiments with these segments has driven significant revenue impact. Feel free to play around with the RFM ranges for these segments based on your goals.
Superstars: High value customers with RFM score 555 (or if you want to sum the individual RFM scores then you can segment those customers with a total score between 10–15). These customers are your ‘superstars’ and should be treated as such. This is the concierge, the airport lounge, the free delivery, the ‘free bottle of champagne on the birthday’ type of customer. These customers are already loyal so whilst they may not need a ‘buy one get one free’ discount, they do need to know that they are special. As an example, with one of our beauty client, we were discussing how they could send gift baskets to these top customers over Xmas. How might you treat your best customers if you want them to stay? What type of service might you provide?
Promising: Customers with high R, and mid range F and M (4–5)(2–3)(2–3). This is where building loyalty is important. Send these customers a voucher, an incentive to get them to spend more and spend more frequently. Start a loyalty scheme. In Australia, we love our coffee, and cafes tend to have a lot of customers in this ‘Promising’ segment, with many customers who come back occasionally. These cafes sometimes use loyalty (‘buy 10 get 1 free’ schemes) to develop these Promising customers into Superstars. For this segment, you want to push your brand to the top of their list of options so that it remains top of mind for your customers and they have an incentive to keep coming back.
At Risk: Customers that are likely to churn, with RFM score ranges of (1–2)(4–5)(4–5). Initially focus on the customers with the low recency score, and high frequency and monetary value scores, the ones that you most want to save. Why do you think these customers aren’t coming back? How can you test this hypothesis? Since this customer group may not be too big, try personalised messaging or calls to remind these customers that they are important. Or more simply, send them an e-mail to convince them to come back, potentially using a special offer to bring your brand to their top of their consideration set.
Whenever you are implementing any of these changes, do so with a controlled experiment. As an example, if you wanted to test a premium service offering for your high value customers, randomly segment them into two groups. Give one group the premium service, and do not give the other group the same offering. Set distinct control and test groups, and keep everything else the same. Then observe how spending varies over a fixed period of time.
Never just implement a change without an experiment. In the above example, if you were to run this premium service with all customers, and you saw frequency of purchase improve, how would you know that the positive change was a result of the service offering and not the result of some other factor, such as good weather?
But what about using this data to acquire new customers?
A lot can be said about finding ‘lookalike audiences’ to your high value audiences and importing them into your marketing platform to prioritise. These need to be tested just like anything else, with clear experiments with clear success metrics (are you looking for a greater number of clicks, a higher conversion rate, or increased spend?) I often like to think about the time vs reward of developing these experiments; it’s important that the audience size is large enough to drive significant change in core metrics to be worth the increased time and complexity in management of these lists.
I hope you now have a better idea about the different ways you can use the RFM scores to develop segments, and develop experiments to drive increases in overall lifetime value.
In the next post we will be discussing the “whys” and the “hows” of predictive lifetime value modelling (versus historical lifetime value modelling with RFM). This model uses customer behaviour to predict how many times a customer will visit, what they will spend and the likelihood that they will churn to give us an estimate of lifetime value. You can also use this data to understand which customer attributes (age, gender etc.) are correlated to your high value customers.
How do you currently segment your customers? What actions do you take for the different segments? Add your comments below.
by Suraj Pabari, Partner in Customer Analytics at SingleView, a data consultancy in Australia.
Currently, many businesses value customers based on their first purchase. As a result, they may under-invest in customers that would be higher value over a period of time and over-invest in lower value customers.
However, we can value customers based on their lifetime value, which is the total spend of the customer over a given period of time.
One way to measure lifetime value is to segment based on recency, frequency and monetary value.
By calculating RFM scores for our customers, we can segment our customers and understand the highest value customers,as well as those with low frequency, low average spend and those who have not visited for a long while.
We can then take action based on these segments to increase long term business revenue.
What do we mean by lifetime value?
You acquire a new customer. Not only that, but the customer returns again and again, spending hundreds of dollars every time they return. This customer must really love you! However, traditionally, you value this customer based on the revenue from their first purchase and now, this customer does not look so good. In fact, you would pay the same for this superstar customer as you would pay for his discount-seeking neighbour, who only bought something because it had a heavy discount. But do not fret, as we are moving to a new world, a world in which the customer is valued based on their total spend over a defined time period… or their lifetime value. Now, you can more easily find the valuable superstars and give them that star treatment with the hope that they stay with your business, and help you discover more just like them, transforming your business into a business of superstars.
The problem with big shiny things
Let’s imagine an extremely technical person in your business spends six months on building a model to predict the customers that will churn in the immediate future. They tell you that they have found a number of relevant features that predict churn, such as delay in bill payment, location and even age. They even excitedly proclaim that they have refined the model to the point where the model can find almost 90% of the customers that will churn. You are excited! You decide to run an experiment by showing ads to customers that are likely to churn to try to prevent them from leaving. However, clicks are so low, that you see no difference in churn rate. You go home, dejected.
Can you relate? After nine years in the Marketing Analytics space, I certainly can. And I’m not the only one.
We often hear buzzwords about things we ‘should do’. ‘Optimise to lifetime value,’ they say. ‘The customer journey is complex, implement a custom attribution model,’ is a common recommendation. ‘Most of your sales are occurring offline, why not connect offline data?’ is often proposed as a solution. You spend time and money on these pet projects, thinking they will transform your business and you divert resources away from your acquisition marketing efforts. The results are often far from impressive.
Should you avoid these types of projects? Absolutely not. The intentions of these projects are generally sound. However, my learning has been that these projects only work when you think about ways that you can use these programs to drive value before you invest significant resources. Write these specific actions down. Get endorsement from other teams that need to be involved. Quantify the value (with some justifiable logic!)
One particular project that often can drive a high cost despite demonstrating a low return is ‘lifetime value’. However, hopefully by the end of this article you will realise that lifetime value can drive significant business growth, in ways that are neither time consuming nor expensive.
The most valuable customers are the ones who have spent the most, right?
To start with, let’s discuss why lifetime value is so important. The current state of measurement with many businesses can be demonstrated in the graphs below. Assume the bars represent the value of five individual customers and the horizontal line represents the cost to acquire a customer: naturally, you set that cost to be equal to the value that you will get from the customers to break even (or even lower if you want a higher margin). You can see that by optimising to this cost you end up over-investing in some ‘low value’ customers (shaded red) and under-investing in other ‘high value’ customers (shaded green).
In contrast, if you were to focus on acquiring more high value customers (the green bars), in many cases, the long term revenue would be higher, as can be seen below.
So what do we mean by high value customers? The ones that spend the most money?
Not quite. Often using total spend over a period of time can be a good proxy, but it is important to take a more nuanced view. Take the example below. Which customer do you think has the greatest value to the business?
Were you able to guess correctly? The behaviour of the first customer suggests that they will be more loyal, as they have greater consistency and bought more recently. We saw this with one of our hospitality clients: they had customers spending a lot of money in their venues on expensive champagne, and then not spending anything for a long period; we had to think of them differently to those customers who spent the same amount, but over a more extended period. The former may have been enjoying themselves on a luxury holiday, and since they will not be coming back, it may not make sense to define them as a high value customer.
So how do we define a high value customer then?
We have a fairly simple way of measuring high value, which is based on three factors:
Recency = How recently the customer bought. Someone who bought a year ago is at risk of churning and may not be high value versus someone who bought last week. Note that, in some models, recency refers to the gap between the first and last purchases.
Frequency = Number of repeat purchases. More purchases demonstrates greater loyalty. Using frequency in this way allows us to distinguish between the tourist who came to the venue and spent a lot of money whilst she was on holiday, and the businessman who goes to the same venue every week.
Monetary value = Average order value. We sometimes exclude the first purchase in this average, particularly if the purchase has been driven by a voucher.
This RFM method gives us a score for each factor. The simplest way to come up with a score is to rank the value that each customer has for each variable between 1 and 5 (though the exact scoring might differ by business). As an example, for recency: bought within last week = 5, bought within last month = 4, bought within last year = 3 etc.; for frequency: 10+ purchases = 5; 8–10 purchases = 4 etc. The recommended approach to determine the actual boundaries is to ensure that 20% of the customers are in each bucket.
Now the fun begins!
With some simple maths (which can even be done in a spreadsheet) you now have three scores per customer. What does this mean?
Let’s say a customer has a RFM score of 555. Keep this customer close! They have recently bought a high value item, and will often return to buy high value items. But what about a 155? With a low recency, this customer hasn’t bought anything recently. Why haven’t they bought anything? How can we bring them back? This diagram makes it simpler to understand.
..though note that in reality we are looking at a cube as a pose to a square!
You may already be thinking about some of the things you can do with this data. What could you do with a ‘High Spender’ to increase their frequency? Would you give the ‘Superstar’ a voucher or would you instead offer them a ‘concierge’ service? Now, rather than simply saying: “These are my high value customers and these are my low value customers,” you can answer some more complex questions, such as:
Who are my highest value customers?
Which customers are on the verge of churning?
Which customers have the potential to be transformed into higher value customers? How might we do that: by trying to upsell them, or getting them to return more often?
Who are the low value customers that you can ignore?
Which group of customers is most likely to respond to your current campaign?
I hope you now have a better idea about the power of LTV segmentation, and understand how you can segment your customers using RFM methodology to answer some important questions.
How do you currently segment your customers? How do you leverage the insights from your segmentation? Feel free to add some comments in the post!
The ABS statistics only tell part of the story. The more significant revelation from COVID has been a realisation that the way organisations adopt and operationalise technology needs to change. Put bluntly, most organisations are paying too much for resources they don’t need — at least not full time — and when they do need them, they can’t manage them effectively to deliver business outcomes.
Why is this so? Well the experience of many organisations during COVID has been their IT has run perfectly well with either contracted in resource, shifting them to work remotely or a mix of offshore services to onshore — mainly those services involving IT support and end customer technical support. The same goes for innovation and systems development. The gig economy and rapid growth of IT services platforms like UpWork, Equal Experts and Digital Village has made it easy for businesses to pick resources they need off-the-shelf, with clearly defined outcomes at a competitive price.
The big takeaway for those who were employed during the lockdown was that remote working is both productive and often preferred. Provided there is a dedicated space at home and decent WiFi bandwidth, the overall work-life balance equation improved and the sense of being in control of one’s life also ticks up.
Many people felt stressed and unsure, to begin with, but by the time lockdown came to an end and they were able to make choices about whether to work from home or return to the office, the vast majority wanted to continue homeworking to some degree. Atlassian, Australia’s largest locally owned IT company, tells us 76% of their staff prefer to avoid their office altogether when they need to concentrate on a project. This stat, along with 40 others gathered by Hubspot, underlines remote working is here to stay and has profound implications for the IT services sector in particular.
Any organisation seeking to optimise its IT resources post-COVID has the opportunity to make some changes which both improve their capability to develop and support systems. It’s also going to be a relatively easy sell to people if they chose to move to a remote working or semi outsourced model, as most have now come to terms with the benefits and ways to make it work for them.
The OKR process is centered on the principle of setting ambitious goals (Objectives) then breaking those Objectives down into Key Results (KRs) which are highly measurable. Underneath each Key Result will be a list of tasks (ToDos) which are the actual things you will do to deliver your Key Results. The results of those elements are typically graded once per quarter.
The concept was invented at the Intel Corporation and is widely used amongst the biggest technology companies in the world including Google and Zynga.
In a nutshell, your objective is what you want to accomplish. Your key results are how you get there.
For how to write OKRs, the actual formula is simple: Objectives are goals and intents, while Key Results are time-bound and measurable milestones under these goals and intents.
Benefits of OKRs
They force an organisation to be ambitious but clear with their goals.
It requires measurement and are therefore tangible.
They help employees understand how their actions help the organisation to achieve its ambitions.
They’re open and transparent, encouraging better collaboration and communication throughout the organisation.
They provide a framework for rapid failure which leads to accelerated success. (As the goals are set quarterly, you know quickly what’s achievable and what’s likely to fail, allowing you to make plans accordingly.)
Example of OKRs
Let’s say you want to focus on improving customer satisfaction. You might have a set of OKRs that looks like this:
Objective: Understand and Improve Upon our Customer Satisfaction Levels
KR1: Conduct 50 research focus groups with our customers
– ToDo: Engage a third party research agency
– ToDo: Hire a venue
– ToDo: Design focus group questions
KR2: Deliver a consistent Net Promoter Score (NPS) of above 80%
– ToDo: Implement an NPS system via email
– ToDo: Perform quality audit on current NPS responses
KR3: Reduce customer attrition due to product dissatisfaction to less than 0.5%
– ToDo: Increase attrition reporting frequency to daily
– ToDo: Reduce wait-time for contact center to less than 2 mins
You wake up in the morning, you turn off your alarm, and as you lie there in bed, you check facebook, Instagram, WhatsApp, Twitter, texts, emails and then the news. Then you go to the bathroom, you use the toilet, brush your teeth, take a shower, get dressed and then head for the kitchen. You drink some coffee and eat breakfast. Maybe you watch the news or check your emails again. It’s the same routine you follow everyday.
Then you drive to work on the same old route, and when you get there you interact with the same coworkers you saw the day before. You spend your day performing pretty much the same duties you performed yesterday. You might even react to the same challenges at work with the same emotions; Then after work, you drive home; maybe you stop at the same grocery store and buy the food you like and always eat. You cook the same food for dinner and watch the same television show at the same time while sitting in the same place in your living room. Then you get ready for bed in the same way you always do-you brush your teeth (with your right hand starting from the upper right side of your mouth), you crawl into the same side of the bed, maybe you read a little, and then you go to sleep.
Currently working with Allianz Insurance with their organisational transformation. Jo is a creative, driven Executive Coach, Facilitator and Organisational Development specialist, helping leaders and organisations transform and achieve more through their people.
Justin is the co-founder of ‘Eighty20 Solutions’ a modern workplace transformation company specialising in Microsoft systems integration. Justin has a background in running large scale transformation programs for enterprise organizations.
NIkki Thompson (Coach & consultant – Inner Circle Work)
Nikki has a long history working in the health industry as a clinician and manager. She also brings business and life skills gained from raising a family and assisting her husband on their grain and grazing property. Nikki provides coaching and consulting to empower individuals and organisations to live and work more mindfully. This promotes health, wellbeing ,collaboration and creativity.
Dave Massage (KPMG Australia)
With over 15 years in the ICT, Banking & Finance and Professional Services industries, Dave specialises in data analytics and strategy development and is passionate about growing and developing dynamic, high performing teams, delivering large scale strategic and transformational programs. Dave is currently the Director of data and analytics at KPMG.
With over 15 years in the ICT, Banking & Finance and Professional Services industries, Dave specialises in data analytics and strategy development and is passionate about growing and developing dynamic, high performing teams, delivering large scale strategic and transformational programs. Dave is currently the Director of data and analytics at KPMG.
We spoke about working from home (WFH) and what this might mean for us as people in terms of work and life balance. We also explored the impact on business and how organisations are navigating this change and how they will need to adapt to remain relevant into the unknown future.
How are we dealing with the change?
Around the 29 minute mark on the video Rachel describes a change curve model. The Change Curve is a popular and powerful model used to understand the stages of personal transition and organisational change.
Rachel’s observation was that companies went from being in denial or panic mode to then jumping to focusing on what is going to happen in the future. Possibly avoiding the reality of now.
Jo suggests that this coping mechanism is where employers need to be focusing on to support their people. Being a crucial point in this journey of change. It is an especially important point in time where there is a need for authentic care and support for people before business implications are considered.
Adapting to change means being flexible.
In the ‘old-normal’ world there was often a clear distinction between work life and home life. Now that everyone is working from home, co-workers are seeing a new side of their co-workers that is more real as they get to meet their kids in the background trashing the house or the pet dog joining the conference call. Or as a listener shared on Youtube chat on the call, her friend sharing more than expected with her husband’s company.
But what this ‘rawness’ or ‘exposure’ of vulnerability is doing for people and companies, is bringing them closer together in a more personal and meaningful way. There is empathy between co-workers and also client relations because we are now no-longer displaying a different version of ourselves. The benefits of this authenticity is trust, better communication, culture, camaraderie and togetherness.
Parents having to cope with a very hectic home life are obviously finding it very difficult, but at the same time coworkers are aware of their challenges because they have a window view into the lives of their co-workers. The team now has a greater appreciation and understanding of the lives of the coworkers and the blend between life and work is more balanced. Dave shared his experiences of this and Rachel suggests how organisations should be supporting their staff at about the 47min mark (here).
Will companies want to go back to the ‘old-normal’?
Justin raised a good point about why WFH is working now and what the challenge might be when the lockdown is lifted. Suggesting that WFH is working for many organisations now because everyone is in the same circumstances. The real challenge comes when we go back to the office and there are say 80% of people working from the office and the other 20% remotely. Do those people who are working from home feel that they can contribute and are being heard by the rest of the team? Taking into account non verbal communications such as body language and the effects of physical presence.
Some people thrive in the office environment and feel a need to be around other people. While others enjoy the solace of their own space and actually would prefer to WFH from now on. We might see a more equal split between those working from home and those from the office. If that is the case, workplace environments and communication technology will need to be re-imagined. (if you are a large organisation interested in exploring what that might look like, I recommend speaking with Justin or someone from Eighty20 Solutions about that).
Jo described a very interesting scenario; now that people are not needing to go into the office anymore, but they will still be wanting the connection and community that comes with the workplace. So the office environment we are accustomed to, could be more about social hubs for people to congregate and work. Which opens up a range of working environment designs that are more functional, enjoyable, productive and innovative.
Reliance and Adoption of Digital
The Industrial Revolution accelerated growth through mass production and huge efficiencies. It was throughout this period that organisational structures were formed and systems and processes were prescribed to form the blueprint of business, employment and trade that we still live our lives by today (including school systems).
This attachment to a Marxist view that value is determined by time of labor input, has developed an expectation overtime that employees need to be in the office, at their desk and sitting there from 9-5. And this is how a company can be sure that things are getting done. This is of course an extreme example of ‘command and control’, but it highlights where we have come from and how things can change.
When asked about the impacts on business, Dave shared that one of the lasting legacies of this scenario will be a faster and more extensive digitisation of Australian businesses. He expressed the general resistance that organisations have to digitisation and some examples of how much more effective teams can be when truly adopting digital into their organisation. (Thanks Dave for the reference to this great article about such adoption of digitisation in the Australian business community.)
Digital technology provides an opportunity for businesses to quickly create new customer value propositions. By better understanding the customer, creating more meaningful services and products, and providing an enhanced customer experience through new digital offerings. As more people are online now, there are new opportunities everywhere for organisations to try new things and remain relevant into the new world.
Digital Business Design – Digital transformation challenges and what solutions researchers have learned
Digital business design: ‘The holistic organisational configuration of people (roles, accountabilities, structures, skills), processes (workflows, routines, procedures), and technology (infrastructure, applications) to define value propositions and deliver offerings made possible by the capabilities of digital technologies.
(Ross et al., 2019)
For mid-large businesses, becoming digital is a competitive necessity. Ubiquitous data, unlimited connectivity and massive automation provides organisations with an opportunity to reinvent themselves, adapt to new markets and evolve for the future of business and the way people work. Reinventing themselves for the future requires stepping into the unknown, and I have great respect for the leaders of these companies who are steering these highly challenging transformations. There is no right way up the mountain and there is no pre-existing cut path guiding the way.
Experimentation and flexibility are characteristics that typically are not associated with large organisations, but ironically this is what it is going to take to navigate the digital mountain.
In September 2019, the MIT Sloan Center for Information Systems Research Press published the findings of 4 years of research into a book; Designed for Digital. How to Architect Your Business for Sustained Success. Within it, defining 5 organisational capabilities that companies must develop to succeed at digital. These 5 building blocks of an organisation are:
Shared Insights about what digital solutions the company can develop that customers will pay for. (building the intersection between what the business can do and what customers desire.)
An Operational Backbone that captures the company’s requirements for integration and standardisation of core operational processes. (This building block enforces reliability in the execution of foundational processes and integrity of company data).
A digital platform of reusable digital components making up digital offerings (this building block provides access to repositories of business, data, and infrastructure components.
An accountability framework that allocates decision making rights to ensure both autonomy and alignment (this building block defines roles, decision rights, and processes to support speed and alignment in development and use of the digital platform.
An external developer platform that exposes digital components of external partners (this building block provides the technology, processes and roles enabling digital partner relationships.
(from “Designed for Digital: How to Architect Your Business for Sustained Success (Management on the Cutting Edge)” by Jeanne W. Ross, Cynthia M. Beath, Martin Mocker)
What got me into tech, was the fascination with the fact that with technology, almost anything is possible, you are only limited by your imagination. What I love about innovation, is that there are no ‘right’ or ‘wrong’ ideas. There’s only things that work and things that do not.
So what new designs of businesses are we going to see in the future? What innovative configurations of people, processes and technology will form throughout the evolution of the digital age? What new services, products and offerings are we going to see? And what could this mean for employees and their livelihoods?
Finding Balance: Giving power to the people
Centralised organisational structures have most of the decisions and responsibility at the top of the organisation, while decentralised organisations allow decision-making and authority at lower levels of the organisation.
By breaking down silos and verticals into small cross-functioning teams, it can provide the business with greater and faster innovation because of the diverse knowledge and expertise within the one team. There is no skill or knowledge waste and people are learning from one another. Ultimately each team has their own culture. A team culture created by empowering individuals and teams to take ownership and responsibility for what they are working on. Where it is a choice to work, not a requirement.
Funnily enough, the flexibility that companies need is the flexibility that people now need for a healthy WFH and work:life balance. Companies that are adopting ways of engaging people that provide a flexible balance between work and personal life will no doubt attract and retain the talent they want and need.
An example of this is a small team of people dedicated to a specific digital product where they are responsible for its design, delivery and success like a startup within an organisation. The cross functioning team can quickly innovate, test and make decisions without getting approval from further up the org chart. There is ownership and purpose in this way of working that is empowering and enjoyable. And it gets results. (learn more about DV teams here)
Transformation of work life
In Nikki’s words;
‘COVID to me is giving us a beautiful global tap on the back to say change how you do business, because if you don’t your grandkids are not going to be impressed.’
We are being forced to look at the world in a different way. The way we work, the way we live, the way organisations operate, serve their customers and engage their people in employment.
Like the movie Finding Joe, we are all on a journey of transformation where if we break from the shackles of the past, we are sure to come out better than how we went in. But we need to make choices and take risks and be willing to let go of the way things were.
Whether that be the shackles of legacy organisational structures or personal baggage we hold onto, we have the choice for a more balanced work life.
You wake up in the morning, you turn off your alarm, and as you lie there in bed, you have a choice. How will you choose to live your life?
The flexibility people want, is the flexibility organisations need to stay relevant and competitive.
7% of Australians find work through the gig economy. This way of working is expanding around the world as people look for flexibility, choice and autonomy in their work;life balance. Global Consulting Firm, Deloitte, summarised in a recent research paper;
“The composition of the workforce is changing dramatically. As alternative work arrangements become more common, how can organizations appeal to, engage with, and drive value through workers of all different types?”
Within their research they found that 42 percent of the survey respondents said that their organizations are primarily made up of salaried employees, and employers expect to dramatically increase their dependence on contract, freelance, and gig workers over the next few years.
Essentially, companies are moving away from established work forces and moving to the more flexible engagement options to both be more competitive but also to attract the talent they need.
What a beautiful opportunity for the world
Here we have an opportunity to empower people to enjoy their work and work in such away that is inline with who they are and how they want to live their life, and at the same time provide organisations with the flexibility, agility and expertise they need to stay relevant and competitive.
The raising of consciousness
As technology has been evolving, so have people.
People are searching for more in life. More meaningful work, more contribution, favourable life experiences, more happiness in their day-to-day and ultimately searching for answers to the fundamental questions of life.
This can be seen by the ever-growing self-help industry and the expanding interest in alternative spiritual practices. Meditation is now near normality and yoga studios are brimming with those in search of inner peace and understanding.
You’ve heard it before; the common story of a professional climbing the ladder well into their 40’s, finally reaching the top only to throw it all away in search of something more meaningful. This realisation of ‘time and purpose’ seems to be discovered earlier in careers than ever before.
Professionals are looking for alternative ways to have both a successful career and live the life they want to live. Traditionally, it was one or the other, impossible to have both within the confounds of organisational structures and corporate hierarchy. That is no longer the case.
The project economy
As people are valuing their time more and taking steps to find more meaningful work, many are looking to contracting, freelancing and project-based work for more choice and flexibility.
However, this can often mean losing out on the benefits of employment, such as friendship among co-workers, training and development, culture and belongingness.
The importance of human connection
It is an innate human need for people to be together and to feel connected to others. It has been at the core of our survival for thousands of years and although we as people love our tech and being online, ‘the 3rd screen’ has crept in between the relationship of people which as a result left people feeling lonely. (ironic when there are more people in the world than ever before). Studies carried out in Australia suggest that loneliness is so pervasive that it may be highlighted as the next public health crisis.
So how can we have independence and connection at the same time?
Throughout 2019, Digital Village has been exploring the concept of “freelancing cross functioning teams” working on a project basis. Projects are defined by business outcomes with clear metrics to measure the level of success.
We have found this way of working to be more enjoyable, more rewarding and more effective for the client. Because, there is more accountability, more responsibility, more dependance and reliance on the professional to get the job done. The team structure is important because the responsibility is shared among the small team and people are eager to work together and be supported by each other. There is no option to hide behind the large curtains of the corporate brand and pass responsibilities to others.
The end. Or not…
It’s a crazy world out there, things can happen incredibly fast and anything is possible. Both good and bad. The beautiful thing is that we have a choice and have the power to create the future we want for ourselves and for the planet.
Life is too short to not enjoy our work, and the world needs our work to contribute in a positive way. What you do matters.
What about you?
Are you a professional in IT or digital? Are you interested in learning more about joining a Digital Village team and working on projects?
What causes IT projects to fail & what does a successful project take?
Since the 1950’s, when humans started writing software and programming machines to do things, failure was common. It was also very expensive, but it was necessary. Most of the proceeding years were focused on improving the technology and it is a testament to humans of our capability, intelligence and dedication. I feel it is important to take a moment to stop and look at what humanity has achieved in terms of technology advancement. ?
Jump to the present and the technology we have at our fingertips enables us to build amazing products and services and solve some serious problems as well as open up amazing opportunities for people and business. But now that we have the technology, the demand and expectation from markets (people) is pushing us to innovate more, build faster, be more efficient. Makes you wonder where it ends or if it ever does.
However, now that we have the most advanced technology, this has not necessarily reflected in more successful projects. So makes you wonder, If technology is not the problem, then why do IT projects fail?
This month, at a Digital Village Meetup, we explored this question as a group.
At Digital Village Meetups, we sometimes play a card game. The card game is simple; 6 decks of cards. Each deck representing a category, each card has a question or statement on it. A player rolls a dice, and picks up a card from the respective deck, reads it out, has a go at answering it and then the group discusses it.
In this session, we decided to focus on only one card from one deck and go deep on it as a group.
The original plan of the game was for each group to pick up a card from the deck without knowing what each other group selected. We did this to avoid group think, but we had rigged it so that each person would pick up a card with the same question on it (so we are all answering the same question without knowing).
BUT as each group came to select their card, they would dig into the deck so not to choose the card from the top (as we had planned to happen). The unpredictable nature of people set the tone for what was to come.
Once we broke into groups, each group spent 30 minutes coming up with a summary of their thoughts and ideas about the card they pulled from the deck. Below are the finding for each group:
Question Discussed: Why do IT Projects Fail?
Question Discussed: When running a project, what can you do to improve the feedback loop?
Question Discussed: Why do IT Projects Fail?
Question Discussed: Waterfall vs Agile?
As a collective group we discussed each groups findings and went deeper into peoples reasoning and experiences and explored what makes a successful project happen? The high-level results were:
Empathy & Attitude towards ‘right and wrong’
Of course culture is central to success but having a team culture and attitude and belief that “it is OK to fail, so Im not scared of experimenting and trying something new” is crucial for people to feel comfortable to be relaxed and be intuitive. However, there is a difference between it being OK to fail and and just being incompetent. The difference is in the learning. Were lessons learned and will that happen again?
One thing that was obvious is that there needs to be one person holding the torch and keeping everyone aligned and heading in the right direction. This person is crucial to resolving issues and making sure that everybody understands each other. This person is a listener and a communicator and doesn’t necessarily have to be the most liked person in the team.
Having a process in place makes things easier for everyone. So people know what to expect and they don’t ever feel lost about what is supposed to happen next. It gives a structure to something that is very peopley and soft.
Flexibility & Balance
An interesting observation was that there is not necessarily a ‘right’ or ‘wrong’ way to run a project. Agile vs Waterfall; it doesn’t matter and it is unhelpful to argue. It comes down to what is the best process and design for the project at hand.
However a proven structure of running teams is small, cross functioning teams. With complimentary skill sets and knowledge. The formation of the team is that of a group of 3-5 with one project leader. An example of a successful team structure is 3Wks, a software development firm which was acquired by GrowthOps in 2017. Project teams like this are well balanced in their individual capability and this gives a flexibility to solve most problems that are faced within a software project.
It was a lot of fun, but the general gist was humbling. The theme that kept being raised was PEOPLE.
#Peoplearecrazy. They are unpredictable. Everyone is unique and we cannot expect people to behave or think in a particular way.
The silver lining here, is that although the communication and difference between people is the cause, if we combine these differences in a unified, harmonious and collaborative way, the outcomes are amazing.
This is why Design Thinking and related methods work so well. Because they extract and present each persons thoughts for others to see and understand.
What makes a successful IT Project?
Creating a common ground and shared understanding for all people around the same problem, solution, goal and outcome.
3wks, practiced a relatively unique project management method they designed to include all project stake holders in the development process. With a focus on outcomes that all people (tech and non-tech can understand, it is easier to keep people aligned on track and engaged in the project and the goal.
If you are interested in this process I highly recommend reading this book written by the 2 founders of 3wks; Beyond Agile.
Thanks for reading and hope to see you around the Village sometime soon.
There are many kinds of informal user research methods. Examples are focus groups, contextual inquiries, coffee shop intercepts, and the like. These informal qualitative methods of user research have proved popular among UX practitioners for their simplicity, low cost, and reduction of the intimidation barrier. But we are experimented with a slightly sideways method of informal user research—drunk user testing (DUT).
Your website should be so simple, a drunk person could use it.
watch 3 intoxicated people to attempt to navigate a website and narrate and commentate their thoughts and experience. The purpose being to gain authentic and unfiltered opinions and feedback about the user experience of the website or app.
Technology creeps into all parts of our lives and it be can be all consuming and paralyzing.
But the purpose of technology is to make our lives easier. Where did we go wrong and what can we do about it to turn it around and have technology work for us.
In September 2019, a valued member of the Digital Village, Charlotte Rose-Mellis lead a workshop highlighting 3 ways to improve your work:life balance and have technology work for you by actually using it less!
With a Bachelor of Science (Psychology & Business Management) and a Graduate Diploma in Psychological Science, Charlotte’s work is influenced by a passion for human-centred design and a decade of experience integrating tech, business and impact as a self-taught web engineer, to create lucrative solutions that regenerate natural environments and grow revenue simultaneously.
Recent career highlights include Speaking at TEDx Tahiti, Finalist for the Young Sustainability Champion NSW and Winner of FYA Pitch the Future (Tech for Good).
The weekend before this event I spent the weekend camping and bush walking through a National Park. I observed the similarities between navigating through the Jungle of technology and that of find ing our way through the jungle of technology in business.
My friends and I spent quite some time at the campsite beforehand, planning our route up the mountain to where the rivers form a Y and the mountains get high and beautiful.
Looking on the map, seemed simple enough. Looking from the top of the ranges, the treelines and river direction seemed easy to understand. A-B.
Technology in business is similar to this. Often it can seem simple enough, but it is easy to get lost.
We started our decent into the rainforest to find the bottom of the gorge with a plan to simply follow the river upstream.
However, the further we went and the deeper we got into the vines, our view of our goal and destination along with how we planned to get there had to change. Navigating our way through the jungle required responding to unforeseen circumstances and constant course correction. There were some paths that led to dead ends. There were some sections that were just not crossable, and we had to find another way round.
It is the same when running a business. The deeper you get into projects (in-particular technology based projects), your view of your goal and destination along with how you planned to get there changes. Business and technology is an uncertain environment that is constantly changing. Things happen, and you need to be flexible enough to adapt. There are some experiments that lead to dead ends. There are some milestones that don’t get met or features that were just not doable and you have to find another way round.
The perspective changes because there is too much happening right in front of you. Getting distracted by smaller problems and obstacles. There is a million ways up the river but how do you know which one is the best? There is so much else to attend to, that it is easy to lose sight of the bigger picture.
A business owner has a jungle in every part of the business. There is a lot to take into consideration and it is a challenge to keep up with it all. For example, it would be wise for a business to adopt a CRM and related marketing technologies to more effectively communicate with their customers and manage other important business metrics. But, how is the average business owner expected to know which technology is best suited to their business? Here are their options:
And that is only marketing technology!
There is technology for every part of the business and it is highly important that the right technologies are chosen with a clear vision for the future.
The beautiful thing about technology is that almost anything is possible. It can change your business and your personal life as well. But in many cases I’ve seen, it has the opposite effect. Driving people to the brink of breakdown out of frustration, stress and inefficiency.
The core of any business is its people. The people who serve the customers and the customers who you’re serving. Technology should be looked upon as an enabler of this. To facilitate value being provided or related transactions, communications etc. Anything more is likely getting in the road.
Until next time
P.S. we made it to our destination even though it took us longer than expected and we took a completely different track. We got to where we wanted to go and the journey was great.
What would have made it easier, is to have a local who knew the terrain and the obstacles to help guide us through the jungle.
Where are you going with your business? What role does technology play? How do you plan to choose your adventure and who would you like to embark on it with?