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CEO’s: what a stretch!
The C-level job is more demanding than ever before. On one hand smart decision-making is pushed by the revolutionizing digital experience needs of younger generations. In my
last blog on embedded finance, I wrote that nowadays, people are online almost continually, searching for products and solutions, watching videos on Instagram, playing games, sharing ephemeral moments on Snapchat, posting pictures of exciting experiences
on Facebook, and buying things. Because of this 100% digital behaviour, customer experience has become a top strategic priority for CEO’s. A remarkable customer experience is critical to the sustained growth of any business. A positive customer experience promotes
loyalty, helps retain customers, and encourages brand advocacy.
On the other hand, CEO’s of international retailers, banks, insurers and real estate companies wrestle how to anticipate to volatile economic conditions by removing obstacles to protect profit margins and grab growth opportunities. They know that to build
sustainable profitable businesses they should heavily invest in digital productivity enhances and in the use of analytics. Most of them understand that their companies must fundamentally change to remain competitive in the upcoming years but fear long and
costly transformations. The question is ’how’ to do this smartly with a period of recession in front of us. In this blog I share some of my learnings…
The push for operational income growth
In my work as AI entrepreneur, I help C-level leaders with making effective growth investment decisions. My core principle in doing this is that I always start with the ideal user experience. Then, I work my way back to strategy and technology. Defining
the ideal customer experience involves benchmarking differentiation with competition, defining kpi’s for success and designing an AI strategy and roadmap. In that, I always push for surprising data-technologies that will change the world with digital, instant,
personal and smart experiences for the next generations. The beauty of this approach is that it has a simple and concise focus but serves both goals: deliver a cracking user experience for breakthrough income growth and transform traditional processes in highly
effective digital data-driven ones. Now let’s have a look at how that usually works.
Apply the new platform context
Regardless of a macro-economic growth or decline phase, new classes of companies that use data and technology as the backbone of their user experience are arising. In financial services for example online payment platforms like Adyen, Paypal and Klarna are
offering seamless check-out and payment solutions which help them take over the strategic organizer role from banks. In doing so they collect zillions of strategically important behavioral data. Based on this asset they have been innovating themselves into
other markets like online retail and lending, eating away the traditional banks’ payment and lending businesses at high-speed. Also, e-commerce platforms like Amazon and Alibaba reach customers globally with a wide offering, collect their shopping data and
translate these with AI into smart personalized upsell and cross sell eroding the business of traditional retailers. And in the siloed real estate industry a new class of tech-driven companies leverages big data for more effective AI rental and property management
solutions eating away the business of millions of traditional players! So, what C-level leaders across industries should be aware of, is that smart investment decisions for improving the company’s customer experience and profitability are often linked to the
development or use of platforms. Platforms are delivering highly efficient data-driven process innovations that revolutionize both the customer experiences as well as the operational costs base. Executing this right however is a challenge as well! I’ve seen
lots of not well thought through digital platform transformations abort, after having caused huge additional transformation costs and chaos! In short, an inspirational platform vision will help you to leap your growth forward, but be aware to execute it from
the user experience in an agile way and with great partners to avoid costly mistakes and delays.
Design an effective eco-system framework
To accelerate their growth ambitions, business leaders around the world increasingly turn to the ecosystem business model that’s linked to the platform. The appeal of ecosystems, which are interconnected sets of services through which users can fulfill a
variety of cross-sectoral needs in one integrated experience, has only grown faster as the global pandemic accelerated consumers’ migration to digital. According to Mc Kinsey consumers are embracing this shift with 71 percent saying they’re ready for integrated
ecosystems. In today’s platform driven world, C-level leaders therefore must reconsider the core competences and capabilities of their firms. As markets are converging the seduction is to be everything for everyone, but be honest, even the big tech companies
cannot deliver on this dream. So, a major challenge that comes with the switch to embedded eco-system platform growth, is to bring focus to the company on where it wants to exactly play, how it wants to win and what capabilities it therefore needs in-house.
And then, be bold and put the money where the mouth is! Because, shifting to—and monetizing—an ecosystem strategy is not easy.
McKinsey research reveals that only 50 percent of companies report limited early success with their ecosystem plays; only roughly 10 percent are generating significant revenue. Creating interconnected services that fulfill user needs across a variety of
sectors is a complex endeavor that demands not just a cohesive strategy but also a design-led approach and lots of strategic perseverance!
Integrate cool AI-operations
With the switch to eco-system platforms lots of new data-driven opportunities and challenges arise. Companies in all sectors therefore are embracing artificial intelligence (AI). AI leverages big data; it promises new insights that derive from applying machine
learning to datasets with more variables, longer timescales, and higher granularity than ever. I acknowledge to indeed go that AI-way and to start the journey with leveraging historical and proces data via automation. Challenging, as it requires to adapt big
data into a form amenable to AI. If done right however, this ‘smart data’ accelerates predictive accuracy and supports root-cause analysis. Bolstering and upskilling expert staff to manage the process can result in an EBITDA increase of 5% to 15%! What an
opportunity that is! From my experience business leaders that are successfully transforming their firms towards eco-system platforms understand the power of AI and data to deliver cool customer experiences and improve their company’s profitability in a volatile
macro-environment. Think big, think smart, be bold and do it!
Financial Services
