As digital strategy becomes more important for the consumer experience, it's vital that B2B companies approach their digital strategy from the consumer's perspective. Ryan Morrissey, who leads Bain’s digital efforts in the Industrial Goods & Services practice, shares two things B2B companies should do to shift toward an effective digital strategy.
Read the Bain Brief: Digital Strategy for a B2B World
Read the transcript below.
RYAN MORRISSEY: As we spend more and more time with clients, working on digital strategy—particularly in B2B environments—there are a couple of things that we're finding across the different clients and spaces that we're working in. The first is, in many cases, clients are bringing their experience and consumers into the B2B world—and they're starting with a set of expectations that's based on their experience as a consumer. And, of course, that starts to bring in companies like Google, like Amazon, like Facebook, that many of us experience in our day-to-day lives, and the kinds of platforms that have created very, very big, valuable companies. Some of the most valuable companies in the world today are built on those digital platforms, so it's natural to try to apply some of those lessons to the B2B environment. We're seeing companies do that—in some ways having some success in what they can learn from B2C, but also running into some real hindrances where B2B doesn't quite line up with what you see on the consumer side.
The other common theme that we see is really about the leadership team that's guiding these B2B organizations and many of the leadership teams that we're working with day-to-day, where we begin to see these sets of factions emerging within the leadership team. One is the group that we call the doers that's really focused on, what can I do today—what can I do in the next 12, 24, 36 months with digital that'll have a real ROI and begin to demonstrate tangible results in a space that otherwise can be a bit difficult to pin down and a bit overwhelming for the organization? Then we've got another group that we call the dreamers that is much more focused on a decade, two-decade view of how the marketplace is going to emerge, what that means for the company and how we could really transform the company to get ahead of the curve, and serve as leaders in that new environment as it unfolds. And that's creating quite a bit of tension in a lot of boardrooms across the clients that we work with as they try to reconcile how much of an emphasis do I put on the doing in the near term, and how much of the emphasis do I put on a grander vision for the long term?
So as we work with leadership teams to navigate through that, there are a couple of things where we spend a lot of time and energy trying to dig deeper and understand both the marketplace and the company's position within that marketplace. The first is this notion of ecosystems in a B2B world, which is very, very important concept on the B2B side—much more so than what we typically see in the consumer realm. So ecosystems is all about the entire life cycle of a product—both those products that are out in the market today as part of legacy installed base and the IT systems that are supporting them. It's about the new products that I'm trying to put in the market today and how to bring those to market in a way that the customer can understand and that they fit together.
And then it's about how I'm going to service those products once they're out in the marketplace. How am I going to sell them? How am I going to commission them? How am I going to service them when they inevitably have issues? So that ecosystem dynamic is a big, big part of B2B digital strategy, both within the company and then—maybe more importantly—thinking about, how do I connect to the other companies in the ecosystem and how do I move all that forward in a way that drives my agenda, given all the dependencies that I have on others that are out there in the market?
The other is big questions around the operating model. So legacy B2B operating models tend to be big, big hindrances to progress in digital. So companies are spending a lot of time on operating model and thinking about, how much of my digital activity needs to be pulled out—needs to be separated from the inertia of the rest of the organization—into constructs that are more focused on digital, give it more air to breathe and more room to innovate. So as we work through with all these issues with our clients, there are a couple of things that we encourage all of them to do right out of the gate.
The first is to really begin to get their arms around what we call the thousand points of digital light. In most companies, there's quite a bit of digital swirl as people try to both inventory and understand the activity that's underway today. In some cases that starts with just a clear vision of what digital means to a company and what their digital ambition is that they're using to drive the company forward. And we see real value in just understanding the activity, matching that activity up against the destination that the company is pursuing, and beginning to triage what's really creating value, so that they narrow their field of vision on the short list of things that really matter.
The second is to begin to get some forward momentum and to begin to take that first step. And in many cases, that means taking a step towards your destination before really knowing what step two, three and four might look like. But provided you're taking step one and know that that step is on a path to the destination that you're pursuing, that gives you room to then reevalutate how has the market changed around me after I've taken that step, how has my own company evolved, how has my perspective on my destination changed—so that I can then reevaluate what step two, three and four might look like. And we see many companies in many spaces that, when you look in the rear-view mirror, have put together a story that all looks very neat and clean in the end, when really, if you trace back the history of that story, while step one was quite clear, step two, three and four were things that evolved very much real time as the marketplace evolved around them.
Read the Bain Brief: Digital Strategy for a B2B World