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What Is the Secret Sauce of Great Customer Experience?

Hansen Lieu

customer experience

As is the norm these days, I hit Amazon.com when my family needs something. In fact, we would use Amazon even when we just want to “window shop”! The other day, my wife saw a pair of sandals she liked. However, she wasn’t sure she wanted them, but she ordered them anyway. The sandals arrived two days later. She tried them out and decided she didn’t like the way they felt on her feet. So, I went back to Amazon (as she ordered them with my account) and submitted a return request. Within two minutes, I got the Return Authorization form and the shipping form to be used to ship the sandals back. I dropped them off at the local UPS store the next day. Within a few hours, I received a notification from Amazon that they have credited the full amount to my credit card. It was an easy and painless customer experience and Amazon nailed it. So even though we didn’t buy the sandals this time, you bet we will buy something else the next day or next week. Amazon really knows me as a customer and has designed the process around my needs. But how?

How do you deliver great customer experience? It is a consensus that to succeed in today’s customer-empowered environment, delivering exceptional customer experience is a must. But I believe the answer lies with the well-known strategy called Customer Centricity. At the end of the day, a great customer experience, particularly for customer service, means giving the customer what they need – or even what they didn’t know they needed.

A lot has been written about Customer Centricity (see J. Galbraith), putting the customer in the center of everything that you do, etc. so I won’t get into the definitions of Customer Centricity. Generally, taking this approach begins with knowing your customers. Then, you design your customer service processes around meeting or exceeding the needs of your customers. Seems pretty basic, right? But many organizations still haven’t gotten it right. There are many reasons, but knowing your customers should not be one of them.

Obviously, customers come in many different shapes and sizes, depending on the industry you’re in and the type of service you provide. But for those in the business of servicing consumers, it’s pretty simple to get to know them. Start with your own personal needs and then refine from there. Let’s take an example in the cable/internet service provider.

As a customer of a cable and Internet service, if you encounter a problem and need help, what do you do? Most likely, you would reach for the phone because you may not have any Internet connectivity. And when you call, you will expect that the number will connect you to someone who can help you. You will also expect that when you call you won’t have to wait for more than a few minutes after you’ve given your pertinent information. You may also expect the service rep on the other end of the line to know the specifics of your cable setup and to be able to intelligently help you diagnose your problem.

You would also expect the cable company to have experts available to solve more complicated problems. Now, if the problem can’t be resolved remotely, and someone has to come by and take a look, you would expect the agent to tell you specifically what time and what day – and not ask that you be available the entire day on Monday. And if the appointment needs to be changed, you would expect that it is well in advance and not 30 minute before the appointment. And when the technician shows up, you would expect him to know what’s been communicated previously on the phone and what tests and diagnostics were performed so you don’t need to start all over again.

With these understandings as guidance, this is how you would design the customer service for the cable provider to minimize what is called “customer effort”. Obviously, contact center could still be your primary channel of service. You may and should supplement it with other channels such as Web, email, and social media – to empower customer interactions through every channel and touch point. Then, you would need to staff your contact center adequately, especially during non-business hours, to meet the expected demand (in fact, your “prime hours” maybe the opposite of the standard business hours). These service agents must also be empowered with training and relevant customer information to solve majority of the problems on the first call. And you must have tools that enable your organization to offer small service window and meet these commitments 95% (pick a target achieved by best-in-class organization) of the time. With these as foundation, you can then continue to refine your customer service processes and structure as you get customer feedback and better understanding of your customers.

Of course, this is a very simple example of customer service designed with a customer centric approach. However, it is not that far from reality. And with abundance of customer information, social data, and trend data out there (frequently called “Big Data”) organizations can really get to know their customers very well. Then, it is just a matter of applying your understanding to serving your customers better than ever before.

I truly believe if you start with a customer centric design and process approach – knowing your customers and catering to their needs – you will ultimately deliver the type of customer experience that your customers will be talking about to their friends, colleagues, and social circles.

 

 

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Amazing Digital Marketing Trends And Tips To Expand Your Business In 2015

Sunny Popali

Amazing Digital Marketing Trends & Tips To Expand Your Business In 2015The fast-paced world of digital marketing is changing too quickly for most companies to adapt. But staying up to date with the latest industry trends is imperative for anyone involved with expanding a business.

Here are five trends that have shaped the industry this year and that will become more important as we move forward:

  1. Email marketing will need to become smarter

Whether you like it or not, email is the most ubiquitous tool online. Everyone has it, and utilizing it properly can push your marketing ahead of your rivals. Because business use of email is still very widespread, you need to get smarter about email marketing in order to fully realize your business’s marketing strategy. Luckily, there are a number of tools that can help you market more effectively, such as Mailchimp.

  1. Content marketing will become integrated and more valuable

Content is king, and it seems to be getting more important every day. Google and other search engines are focusing more on the content you create as the potential of the online world as marketing tool becomes apparent. Now there seems to be a push for current, relevant content that you can use for your services and promote your business.

Staying fresh with the content you provide is almost as important as ensuring high-quality content. Customers will pay more attention if your content is relevant and timely.

  1. Mobile assets and paid social media are more important than ever

It’s no secret that mobile is key to your marketing efforts. More mobile devices are sold and more people are reading content on mobile screens than ever before, so it is crucial to your overall strategy to have mobile marketing expertise on your team. London-based Abacus Marketing agrees that mobile marketing could overtake desktop website marketing in just a few years.

  1. Big Data for personalization plays a key role

Marketers are increasingly using Big Data to get their brand message out to the public in a more personalized format. One obvious example is Google Trend analysis, a highly useful tool that marketing experts use to obtain the latest on what is trending around the world. You can — and should — use it in your business marketing efforts. Big Data will also let you offer specific content to buyers who are more likely to look for certain items, for example, and offer personalized deals to specific groups of within your customer base. Other tools, which until recently were the stuff of science fiction, are also available that let you do things like use predictive analysis to score leads.

  1. Visual media matters

A picture really is worth a thousand words, as the saying goes, and nobody can deny the effectiveness of a well-designed infographic. In fact, some studies suggest that Millennials are particularly attracted to content with great visuals. Animated gifs and colorful bar graphs have even found their way into heavy-duty financial reports, so why not give them a try in your business marketing efforts?

A few more tips:

  • Always keep your content relevant and current to attract the attention of your target audience.
  • Always keep all your social media and public accounts fresh. Don’t use old content or outdated pictures in any public forum.
  • Your reviews are a proxy for your online reputation, so pay careful attention to them.
  • Much online content is being consumed on mobile now, so focus specifically on the design and usability of your mobile apps.
  • Online marketing is essentially geared towards getting more traffic onto your site. The more people visit, the better your chances of increasing sales.

Want more insight on how digital marketing is evolving? See Shutterstock Report: The Face Of Marketing Is Changing — And It Doesn’t Include Vince Vaughn.

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About Sunny Popali

Sunny Popali is SEO Director at www.tempocreative.com. Tempo Creative is a Phoenix inbound marketing company that has served over 700 clients since 2001. Tempos team specializes in digital and internet marketing services including web design, SEO, social media and strategy.

Compelling Shopping Moments: 4 Creative Ways Stores Connect With Their Customers

Ralf Kern

compelling shopping momentsOn a recent morning, as I was going through my usual routine, my coffeemaker broke. I cannot live without coffee in the morning, so I immediately looked up my coffeemaker on Amazon and had it shipped Prime in one day. My problem was solved within minutes. My Amazon app, and my loyalty account with that company, was there for me when I needed it most.

It was in this moment that I realized the importance of digital presence for retailers. There is a chance that the store 10 minutes from my house carries this very same coffeemaker; I could have had it in one hour, instead of one day. But the need for immediate access to information pushed me to the online store. My local retailer was not able to be there for me digitally like Amazon.

Retail is still about reading the minds of your customers in order to know what they need and create a flawless experience. But the days of the unconnected shopper in a monochannel world are over. I am not alone in my digital-first mindset; according to a recent MasterCard report, 80% of consumers use technology during the shopping process. I, and consumers like me, use mobile devices as a guide to the physical world.

We don’t need to have an academic discussion about multichannel, omnichannel, and omnicommerce and their meanings, because what it really comes down to for your consumers, or fans, is shopping. And shopping has everything to do with moments in your customers’ lives: celebration moments, in-a-hurry moments, I-want-to-be-entertained moments, and more. Most companies only look for and measure very few moments along the shopping journey, like the moment of coupon download or the moment of sales.

Anticipating these moments was easier when mom and pop stores knew their customers by name. They knew how to be there for their shoppers when, where, and how they wanted it. And shoppers didn’t have any other options. Now it is crucial for companies to understand all of these moments and even anticipate or trigger the right moments for their customers.

In today’s digital economy the way to achieve customer connection is with simple, enjoyable, and personalized front ends that are supported by sophisticated, digital back ends. Then you can use that system to support your customer outreach.

Companies around the world are using creative and innovative methods to find their customers in various moments. Being there for customers comes in many different shapes and forms. Consider these examples:

Chilli Beans

A Brazilian maker of fashion sunglasses, glasses, and watches, Chilli Beans has a loyal following online and at over 700 locations around the world. Chilli Beans keeps its customers engaged by releasing 10 limited-edition styles each week. If customers like what they see, they have to buy fast or risk missing out.

Bonobos

Online men’s fashion retailer Bonobos reaches its customers with its Guide Shops. While they look like traditional retail outlets, the shops don’t actually sell any clothes. Customers come in for one-on-one appointments with the staff, and if they like anything that they try on, the staff member orders it for them online and it is shipped to their house. The 20 Guide Shops currently open have proven very successful for the company.

Peak Performance

Peak Performance, a European maker of outdoor clothing, has added a little magic to its customer experience. It has created virtual pop-up shops that customers can track on their smartphones through CatchMagicHour.com, and they are only available at sunrise and sunset at exact GPS locations. Customers who go to the location, be it at a lighthouse or on top of a mountain, are rewarded with the ability to select free clothing from the virtual shop that they have unlocked on their phones.

Shoes of Prey

The customer experience is completely custom at Shoes of Prey, a website where women can design custom shoes. From fabric to color, the customer picks every element, and then her custom creation is sent directly to her house. Shoes of Prey has even shifted its business model based on customer feedback. Its customers wanted to get inspiration and advice in a physical store. So Shoes of Prey made the move from online-only to omnicommerce and has started to open stores around the world.

While the customer experience for each of these connections is relatively simple – a website, a smartphone, an online design studio – the back end that powers them has to be powerful and nimble at the same time. These sophisticated back ends – powering simple, enjoyable, and personalized front ends – will completely change the game in retail. They will allow companies to engage their customers in ways we can’t even begin to imagine.

Technology will help you be there in the shopping moment. The best technology won’t annoy your customers with irrelevant promotions or pop-up messages. Instead, like a good friend, it will know how to engage with customers and when to leave them alone – how to truly connect with customers instead of manage them. Consequently, customer relationship management as we know it is an outdated technology in the economy of today – and tomorrow. Technologies that go beyond CRM will help retailers to differentiate. Aligning your organization and those technologies will be the Holy Grail to creating true and sustainable customer loyalty.

Learn more ways that business will never be the same again. Learn 99 Mind-Blowing Ways The Digital Economy Is Changing The Future Of Business.

Find out how SAP can help you go beyond CRM and support your retail business.

Ralf Kern is Global Vice President Retail for SAP and a retail ambassador for SAP. Interested in your feedback. You can also get in touch on Twitter or LinkedIn

This blog also appeared on SAP Customer Network.

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Ralf Kern

About Ralf Kern

Ralf Kern is the Global Vice President, Business Unit Retail, at SAP, responsible for the future direction of SAP’s solution and global Go-to-Market strategy for Omnicommerce Retail, leading them into today’s digital reality.

Unlock Your Digital Super Powers: How Digitization Helps Companies Be Live Businesses

Erik Marcade and Fawn Fitter

The Port of Hamburg handles 9 million cargo containers a year, making it one of the world’s busiest container ports. According to the Hamburg Port Authority (HPA), that volume doubled in the last decade, and it’s expected to at least double again in the next decade—but there’s no room to build new roads in the center of Hamburg, one of Germany’s historic cities. The port needed a way to move more freight more efficiently with the physical infrastructure it already has.

sap_Q216_digital_double_feature1_images1The answer, according to an article on ZDNet, was to digitize the processes of managing traffic into, within, and back out of the port. By deploying a combination of sensors, telematics systems, smart algorithms, and cloud data processing, the Port of Hamburg now collects and analyzes a vast amount of data about ship arrivals and delays, parking availability, ground traffic, active roadwork, and more. It generates a continuously updated model of current port conditions, then pushes the results through mobile apps to truck drivers, letting them know exactly when ships are ready to drop off or receive containers and optimizing their routes. According to the HPA, they are now on track to handle 25 million cargo containers a year by 2025 without further congestion or construction, helping shipping companies bring more goods and raw materials in less time to businesses and consumers all across Europe.

In the past, the port could only have solved its problem with backhoes and building permits—which, given the physical constraints, means the problem would have been unsolvable. Today, though, software and sensors are allowing it to improve processes and operations to a previously impossible extent. Big Data analysis, data mining, machine learning, artificial intelligence (AI), and other technologies have finally become sophisticated enough to identify patterns not just in terabytes but in petabytes of data, make decisions accordingly, and learn from the results, all in seconds. These technologies make it possible to digitize all kinds of business processes, helping organizations become more responsive to changing market conditions and more able to customize interactions to individual customer needs. Digitization also streamlines and automates these processes, freeing employees to focus on tasks that require a human touch, like developing innovative strategies or navigating office politics.

In short, digitizing business processes is key to ensuring that the business can deliver relevant, personalized responses to the market in real time. And that, in turn, is the foundation of the Live Business—a business able to coordinate multiple functions in order to respond to and even anticipate customer demand at any moment.

Some industries and organizations are on the verge of discovering how business process digitization can help them go live. Others have already started putting it into action: fine-tuning operations to an unprecedented level across departments and at every point in the supply chain, cutting costs while turbocharging productivity, and spotting trends and making decisions at speeds that can only be called superhuman.

Balancing Insight and Action

sap_Q216_digital_double_feature1_images2Two kinds of algorithms drive process digitization, says Chandran Saravana, senior director of advanced analytics at SAP. Edge algorithms operate at the point where customers or other end users interact directly with a sensor, application, or Internet-enabled device. These algorithms, such as speech or image recognition, focus on simplicity and accuracy. They make decisions based primarily on their ability to interpret input with precision and then deliver a result in real time.

Edge algorithms work in tandem with, and sometimes mature into, server-level algorithms, which report on both the results of data analysis and the analytical process itself. For example, the complex systems that generate credit scores assess how creditworthy an individual is, but they also explain to both the lender and the credit applicant why a score is low or high, what factors went into calculating it, and what an applicant can do to raise the score in the future. These server-based algorithms gather data from edge algorithms, learn from their own results, and become more accurate through continuous feedback. The business can then track the results over time to understand how well the digitized process is performing and how to improve it.

sap_Q216_digital_double_feature1_images5From Data Scarcity to a Glut

To operate in real time, businesses need an accurate data model that compares what’s already known about a situation to what’s happened in similar situations in the past to reach a lightning-fast conclusion about what’s most likely to happen next. The greatest barrier to this level of responsiveness used to be a lack of data, but the exponential growth of data volumes in the last decade has flipped this problem on its head. Today, the big challenge for companies is having too much data and not enough time or power to process it, says Saravana.

Even the smartest human is incapable of gathering all the data about a given situation, never mind considering all the possible outcomes. Nor can a human mind reach conclusions at the speed necessary to drive Live Business. On the other hand, carefully crafted algorithms can process terabytes or even petabytes of data, analyze patterns and detect outliers, arrive at a decision in seconds or less—and even learn from their mistakes (see How to Train Your Algorithm).

How to Train Your Algorithm 

The data that feeds process digitization can’t just simmer.
It needs constant stirring.

Successfully digitizing a business process requires you to build a model of the business process based on existing data. For example, a bank creates a customer record that includes not just the customer’s name, address, and date of birth but also the amount and date of the first deposit, the type of account, and so forth. Over time, as the customer develops a history with the bank and the bank introduces new products and services, customer records expand to include more data. Predictive analytics can then extrapolate from these records to reach conclusions about new customers, such as calculating the likelihood that someone who just opened a money market account with a large balance will apply for a mortgage in the next year.

Germany --- Germany, Lower Bavaria, Man training English Springer Spaniel in grass field --- Image by © Roman M‰rzinger/Westend61/CorbisTo keep data models accurate, you have to have enough data to ensure that your models are complete—that is, that they account for every possible predictable outcome. The model also has to push outlying data and exceptions, which create unpredictable outcomes, to human beings who can address their special circumstances. For example, an algorithm may be able to determine that a delivery will fail to show up as scheduled and can point to the most likely reasons why, but it can only do that based on the data it can access. It may take a human to start the process of locating the misdirected shipment, expediting a replacement, and establishing what went wrong by using business knowledge not yet included in the data model.

Indeed, data models need to be monitored for relevance. Whenever the results of a predictive model start to drift significantly from expectations, it’s time to examine the model to determine whether you need to dump old data that no longer reflects your customer base, add a new product or subtract a defunct one, or include a new variable, such as marital status or length of customer relationship that further refines your results.

It’s also important to remember that data doesn’t need to be perfect—and, in fact, probably shouldn’t be, no matter what you might have heard about the difficulty of starting predictive analytics with lower-quality data. To train an optical character recognition system to recognize and read handwriting in real time, for example, your samples of block printing and cursive writing data stores also have to include a few sloppy scrawls so the system can learn to decode them.

On the other hand, in a fast-changing marketplace, all the products and services in your database need consistent and unchanging references, even though outside the database, names, SKUs, and other identifiers for a single item may vary from one month or one order to the next. Without consistency, your business process model won’t be accurate, nor will the results.

Finally, when you’re using algorithms to generate recommendations to drive your business process, the process needs to include opportunities to test new messages and products against existing successful ones as well as against random offerings, Saravana says. Otherwise, instead of responding to your customers’ needs, your automated system will actually control their choices by presenting them with only a limited group of options drawn from those that have already received the most
positive results.

Any process is only as good as it’s been designed to be. Digitizing business processes doesn’t eliminate the possibility of mistakes and problems; but it does ensure that the mistakes and problems that arise are easy to spot and fix.

From Waste to Gold

Organizations moving to digitize and streamline core processes are even discovering new business opportunities and building new digitized models around them. That’s what happened at Hopper, an airfare prediction app firm in Cambridge, Massachusetts, which discovered in 2013 that it could mine its archives of billions of itineraries to spot historical trends in airfare pricing—data that was previously considered “waste product,” according to Hopper’s chief data scientist, Patrick Surry.

Hopper developed AI algorithms to correlate those past trends with current fares and to predict whether and when the price of any given flight was likely to rise or fall. The results were so accurate that Hopper jettisoned its previous business model. “We check up to 3 billion itineraries live, in real time, each day, then compare them to the last three to four years of historical airfare data,” Surry says. “When consumers ask our smartphone app whether they should buy now or wait, we can tell them, ‘yes, that’s a good deal, buy it now,’ or ‘no, we think that fare is too expensive, we predict it will drop, and we’ll alert you when it does.’ And we can give them that answer in less than one second.”

When consumers ask our smartphone app whether they should buy now or wait, we can tell them, ‘yes, that’s a good deal, buy it now’.

— Patrick Surry, chief data scientist, Hopper

While trying to predict airfare trends is nothing new, Hopper has told TechCrunch that it can not only save users up to 40% on airfares but it can also find them the lowest possible price 95% of the time. Surry says that’s all due to Hopper’s algorithms and data models.

The Hopper app launched on iOS in January 2015 and on Android eight months later. The company also switched in September 2015 from directing customers to external travel agencies to taking bookings directly through the app for a small fee. The Hopper app has already been downloaded to more than 2 million phones worldwide.

Surry predicts that we’ll soon see sophisticated chatbots that can start with vague requests from customers like “I want to go somewhere warm in February for less than $500,” proceed to ask questions that help users narrow their options, and finally book a trip that meets all their desired parameters. Eventually, he says, these chatbots will be able to handle millions of interactions simultaneously, allowing a wide variety of companies to reassign human call center agents to the handling of high-value transactions and exceptions to the rules built into the digitized booking process.

Port of Hamburg Lets the Machines Untangle Complexity

In early 2015, AI experts told Wired magazine that at least another 10 years would pass before a computer could best the top human players at Go, an ancient game that’s exponentially harder than chess. Yet before the end of that same year, Wired also reported that machine learning techniques drove Google’s AlphaGo AI to win four games out of five against one of the world’s top Go players. This feat proves just how good algorithms have become at managing extremely complex situations with multiple interdependent choices, Saravana points out.

The Port of Hamburg, which has digitized traffic management for an estimated 40,000 trucks a day, is a good example. In the past, truck drivers had to show up at the port to check traffic and parking message boards. If they arrived before their ships docked, they had to drive around or park in the neighboring residential area, contributing to congestion and air pollution while they waited to load or unload. Today, the HPA’s smartPORT mobile app tracks individual trucks using telematics. It customizes the information that drivers receive based on location and optimizes truck routes and parking in real time so drivers can make more stops a day with less wasted time and fuel.

The platform that drives the smartPORT app also uses sensor data in other ways: it tracks wind speed and direction and transmits the data to ship pilots so they can navigate in and out of the port more safely. It monitors emissions and their impact on air quality in various locations in order to adjust operations in real time for better control over environmental impact. It automatically activates streetlights for vehicle and pedestrian traffic, then switches them off again to save energy when the road is empty. This ability to coordinate and optimize multiple business functions on the fly makes the Port of Hamburg a textbook example of a Live Business.

Digitization Is Not Bounded by Industry

Other retail and B2B businesses of all types will inevitably join the Port of Hamburg in further digitizing processes, both in predictable ways and in those we can only begin to imagine.

sap_Q216_digital_double_feature1_images4Customer service, for example, is likely to be in the vanguard. Automated systems already feed information about customers to online and phone-based service representatives in real time, generate cross-selling and upselling opportunities based on past transactions, and answer customers’ frequently asked questions. Saravana foresees these systems becoming even more sophisticated, powered by AI algorithms that are virtually indistinguishable from human customer service agents in their ability to handle complex live interactions in real time.

In manufacturing and IT, Sven Bauszus, global vice president and general manager for predictive analytics at SAP, forecasts that sensors and predictive analysis will further automate the process of scheduling and performing maintenance, such as monitoring equipment for signs of failure in real time, predicting when parts or entire machines will need replacement, and even ordering replacements preemptively. Similarly, combining AI, sensors, data mining, and other technologies will enable factories to optimize workforce assignments in real time based on past trends, current orders, and changing market conditions.

Public health will be able to go live with technology that spots outbreaks of infectious disease, determines where medical professionals and support personnel are needed most and how many to send, and helps ensure that they arrive quickly with the right medication and equipment to treat patients and eradicate the root cause. It will also make it easier to track communicable illnesses, find people who are symptomatic, and recommend approaches to controlling the spread of the illness, Bauszus says.

He also predicts that the insurance industry, which has already begun to digitize its claims-handling processes, will refine its ability to sort through more claims in less time with greater accuracy and higher customer satisfaction. Algorithms will be better and faster at flagging claims that have a high probability of being fraudulent and then pushing them to claims inspectors for investigation. Simultaneously, the same technology will be able to identify and resolve valid claims in real time, possibly even cutting a check or depositing money directly into the insured person’s bank account within minutes.

Financial services firms will be able to apply machine learning, data mining, and AI to accelerate the process of rating borrowers’ credit and detecting fraud. Instead of filling out a detailed application, consumers might be able to get on-the-spot approval for a credit card or loan after inputting only enough information to be identified. Similarly, banks will be able to alert customers to suspicious transactions by text message or phone call—not within a day or an hour, as is common now, but in a minute or less.

Pitfalls and Possibilities

As intelligent as business processes can be programmed to be, there will always be a point beyond which they have to be supervised. Indeed, Saravana forecasts increasing regulation around when business processes can and can’t be digitized. Especially in areas involving data security, physical security, and health and safety, it’s one thing to allow machines to parse data and arrive at decisions to drive a critical business process, but it’s another thing entirely to allow them to act on those decisions without human oversight.

Automated, impersonal decision making is fine for supply chain automation, demand forecasting, inventory management, and other processes that need faster-than-human response times. In human-facing interactions, though, Saravana insists that it’s still best to digitize the part of the process that generates decisions, but leave it to a human to finalize the decision and decide how to put it into action.

“Any time the interaction is machine-to-machine, you don’t need a human to slow the process down,” he says. “But when the interaction involves a person, it’s much more tricky, because people have preferences, tastes, the ability to try something different, the ability to get fatigued—people are only statistically predictable.”

For example, technology has made it entirely possible to build a corporate security system that can gather information from cameras, sensors, voice recognition technology, and other IP-enabled devices. The system can then feed that information in a steady stream to an algorithm designed to identify potentially suspicious activity and act in real time to prevent or stop it while alerting the authorities. But what happens when an executive stays in the office unusually late to work on a presentation and the security system misidentifies her as an unauthorized intruder? What if the algorithm decides to lock the emergency exits, shut down the executive’s network access, or disable her with a Taser instead of simply sending an alert to the head of security asking what to do while waiting for the police to come?

sap_Q216_digital_double_feature1_images6The Risk Is Doing Nothing

The greater, if less dramatic, risk associated with digitizing business processes is simply failing to pursue it. It’s true that taking advantage of new digital technologies can be costly in the short term. There’s no question that companies have to invest in hardware, software, and qualified staff in order to prepare enormous data volumes for storage and analysis. They also have to implement new data sources such as sensors or Internet-connected devices, develop data models, and create and test algorithms to drive business processes that are currently analog. But as with any new technology, Saravana advises, it’s better to start small with a key use case, rack up a quick win with high ROI, and expand gradually than to drag your heels out of a failure to grasp the long-term potential.

The economy is digitizing rapidly, but not evenly. According to the McKinsey Global Institute’s December 2015 Digital America report, “The race to keep up with technology and put it to the most effective business use is producing digital ‘haves’ and ‘have-mores’—and the large, persistent gap between them is becoming a decisive factor in competition across the economy.” Companies that want to be among the have-mores need to commit to Live Business today. Failing to explore it now will put them on the wrong side of the gap and, in the long run, rack up a high price tag in unrealized efficiencies and missed opportunities. D!

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Erik Marcade

About Erik Marcade

Erik Marcade is vice president of Advanced Analytics Products at SAP.

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Why Workplace Leadership Is About To Get Its First Major Makeover In 100 Years

Mark Crowley

“The difficulty lies not so much in developing new ideas as in escaping from old ones.” ~ John Maynard Keynes

Our common and traditional approach to leadership hasn’t significantly evolved since the dawn of the industrial age. When it comes to managing people in a work environment, we’ve always treated workers like any other input: Squeeze as much as much out of them as possible and pay them as little as possible.

This idea was introduced nearly a century ago, when the expansion of the U.S. economy largely was based on industrial machinery. Workers were required to perform relatively non-challenging tasks and were easily replaceable. Companies motivated workers primarily with money, paying by the piece to reward those who produced the most widgets.

But as we fast-forward to today’s business world, shaped by rapidly evolving technology and the far greater importance of institutional knowledge, creative thinking, and sophisticated collaboration, the value of each employee has grown exponentially more important. Companies are focusing on innovation and unique differentiation – and almost exclusively are looking at people, not machines, to provide it.

As workers have become increasingly more critical to the overall success of their organizations, what they need and expect in exchange for their work also has profoundly changed. Money no longer inspires performance as it once did. Being paid equitably will always be important as a driver of job engagement and productivity, of course, but people across the globe now have aspirations in their jobs that were virtually unimaginable in an earlier age.

Extensive research confirms that people want to grow and develop in the roles. They want to feel valued and appreciated by their leaders, and to know their work has significance. And just as Abraham Maslow predicted 70 years ago, they seek to feel fulfilled and even maximized by the work they do.

That leadership practices have remained essentially unchanged through this evolution – and have failed to fully respond to the 21st-century workplace – has much to do with a deeply entrenched status quo. Many organizations, along with their long-in-the-tooth leaders, have failed to embrace workers as being their most important stakeholder. Instead, they cling to the threadbare paradigm that employees are a costly input, rather than human beings who associate their life’s happiness with their contentment at work. Thus far, they’ve failed to see that more fully supported workers are more loyal, productive and drive an expanded bottom-line.

But I believe the stars are now perfectly aligned to force a massive change in how we collectively seek to motivate human performance in the workplace. Here are three important reasons why leadership is about to be greatly transformed, why the change will be long sustained – and what key practices will define the highly successful manager for the foreseeable future. The one hint I’ll give you now is that future leaders in all workplaces will be required not just to have strong minds, but also generous and caring hearts. I’m dead serious.

Traditional leadership practices are failing, and businesses are paying the price

I recently interviewed Dr. Jim Harter, Gallup’s director of research, and learned that only 30% of U.S. workers today admit to being engaged in their jobs. In its “State of the American Workplace” report released early this month, Gallup reveals that the main reason an astounding 7 in 10 workers are disengaged at work is because they’re not getting proper support from their leaders.

For an article I wrote for Fast Company Magazine, Harter explained the gap: “Workplaces in general have paid a lot of attention to process and far less to people. Too often employees are given managerial roles tied to success in a previous role, or as a reward for their tenure. It’s unrelated to whether they can effectively support and positively manage human beings.”

What Harter’s 27 years of research experience has taught him is that people will continue to be unhappy in their jobs (and therefore greatly underperforming) just as long as their leaders fail to be their advocates. For things to change, therefore, organizations must start promoting people into management roles who have a stronger inclination to mentor and care about their employees rather than compete against them.

According to a worldwide study by Towers Watson, the single highest driver of engagement today is whether or not workers feel their managers are genuinely interested in their well-being. Less than 40% of workers now feel that support.

As further evidence that our leadership practices have the effect of undermining rather than driving productivity, the Conference Board reports that 53% of all U.S. workers today effectively hate their jobs.

The next generation of workers demands a far more nurturing form of leadership

If we’ve reached a tipping point in workplace leadership (which I believe we have), it’s because a new generation of workers has arrived on the scene that simply won’t tolerate a work environment that fails to support them and their needs. Said another way, organizations will be unable to attract and retain this young talent if they don’t adopt far more authentically supportive management practices. (Inevitably, this will be good news for all workers, regardless of their age).

If you don’t know already, the millennials (born 1980-2003) are the largest generation in U.S. history. Totaling 17 million more people than the baby boomers (the last pig in society’s python), this group is just coming of age. Their impact on influencing major changes to workplace leadership is just being felt – and it only will get stronger in ensuing decades as they grow older and inevitably assume senior manager and ultimately CEO roles.

While derided by some (boomers mostly) as an unambitious, video-game playing generation still living in their parent’s homes, millennials are the best-educated age group ever. And collectively, they have very different values than their predecessors. They’re highly self-confident, very concerned about the well-being of others, and group-oriented. It might surprise you that they’re also extremely generous group; a spirit of service permeates the entire generation.

But here’s what’s most important. To these young workers, money is far less important. Instead, they have a strong desire to find meaning through their work. In a recent study, 88% of millennials rated “opportunity to have an impact on the world” important when choosing an employer. These incredibly high aspirations will ensure workplace leadership practices are fully reinvented.

Organizations that don’t change will be at a great competitive disadvantage

In just the past few months, I’ve visited companies like Google (where the median age of employees is just 29) and SAS – organizations routinely ranked by the Great Place To Work Institute (and Fortune Magazine) as America’s “Best Companies To Work For.’’

There are two important things you need to know about firms like these, which place  extremely high value on people:

  1. They’re helping to reinvent leadership. What these companies have in common is that they give employees a meaningful voice in how the business gets run. They place great value on trust – so much so that people have discretion on when they begin and end their workdays, and when they take their breaks. They’re also uncommonly generous, and provide perks and benefits many traditional CFOs would reject as being blatant profit killers. Workers are encouraged to contribute to projects outside of the scope of their normal roles (partly to ensure they have some variety in their day) – and are routinely made to know how their work and efforts contribute to the success of the firm.
  1. They have high engagement, very low turnover, and consistently outperform competitors in financial performance and shareholder return. Several recent studies have shown that companies where employees are happiest and better supported consistently achieve significantly higher profits. SAS, for example, has had 37 consecutive years of record profitability, and Google’s stock price has appreciated nearly 700% over the past 8 ½ years (since its IPO) compared to just 51% for the Dow Jones average. What all firms on the “Best Companies To Work For List” are proving is that highly supported human beings are more loyal, more creative, and sustainably drive far greater financial results. This exceptional and broad success will force competitors to adopt similar leadership practices; shareholders will demand it.

The future of workplace leadership

Workplace leadership is failing today largely because it has yet to acknowledge the importance of “emotional currency™” – a form of reward that makes people feel important, supported, valued, developed and appreciated. In fact, science now has proved that it’s our feelings and emotions that determine our level of engagement in life, what motivates us, and what we care most about.

Where once the idea of appealing to the hearts in workers was seen as heresy, we’ve come to understand that it’s always been essential. The greatest advice I can give you is this: “When you lead from the heart, people will follow.”

For more on what makes a great leader, see Working And Leading With Purpose.

This post was sponsored by and first published on GreatPlacetoWork.com.

The post Why Workplace Leadership Is About To Get Its First Major Makeover In 100 Years appeared first on TalentCulture.

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