Brands are likely to achieve rapid revenue growth and profit growth when they take an outside-in approach to innovation and utilize data they capture, according to PricewaterhouseCoopers.
The company’s 2015 Global Digital IQ Survey, which studied the behavior and corporate performance of nearly 2,000 executives, identifies critical attributes that correlate with stronger financial performance. It shows that top performers form relationships with other innovators, such as vendors or customers, to apply new ideas for using technology. They also constantly evaluate emerging technologies and continually look for opportunities to digitize the business.
“When you look at any new technology, there’s a disruptive business model coming out: you can see what’s happening with mobile commerce, you can see what’s happening with wearable tech and you can see what’s happening with the sharing economy. The question that brands are facing is, do I have relationships with companies that are innovating or do I want to be a disruptor myself? There’s a lot more work by companies to work with ‘disruptors’ than to be them,” says Matthew Egol, chief strategy officer of digital services at PwC.
“Most innovation is recombining things. In digital, what most brands are doing is creative right brain thinking, which is awesome. But at the same time, you need to solve problems. Real innovation occurs when you combine technology and business needs with creativity,” he adds.
Aside from an outside-in approach to innovation, the survey reveals that it’s a real challenge for businesses to leverage the data they capture to guide strategic decisions, like how to grow the business or whether to collaborate with competitors. Top-performing companies see more potential in making use of their data than lower-performing ones, according to the survey. They see the most promise in third-party data (78 percent), cloud application data (70 percent), social media data (69 percent), and location-aware data (64 percent).
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Egol explains that there are at least three key ways how data can be used. The first one is about an overall guidance, such as scenario planning and risk management. The second layer is more distributive and relates to a company’s day-to-day decision. For example, a brand wants to push data information out to people’s smartphones and give them tools to make a better business decision. The third layer is more consumer-facing, which is optimizing content in real-time. No matter whether it is a mobile, social or Web experience, every piece of content is optimized by machine learning and algorithms.
“There are many ad-tech vendors helping brands build internal capabilities to optimize the best content possible. That’s a really big challenge because it’s not only about content marketing, but also consumer experience,” Egol says.
The survey also shows that top-performing companies are more likely to proactively evaluate, and plan for security and privacy in digital enterprise projects. For example, they are more prepared to manage cyber risks (80 percent) compared to lower performers (64 percent). On this front, one thing that brands can learn from leading companies is to include risk managers and security leaders in conversations about new product and service development, according to the survey.
Of course, there are other critical attributes that marketers should be aware of, including:
- Top performers consistently measure outcomes from digital technology investments.
- Top performers have a cohesive digital roadmap that includes business capabilities and processes, as well as digital and IT components.
- Chief executives (CEOs) have digital disruption on their radars.
- The executives responsible for digital are involved in setting high-level business strategy.
- Business-aligned digital strategy is agreed upon and shared at the C-level.
- Business and digital strategy are well-communicated enterprise-wide.
- Digital enterprise investments are made primarily for competitive advantage.
Does your organization have these 10 attributes?
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