How To Avoid the Trap of Technology Myopia

This blog originally appeared on discoursive.blog and was written by Joseph Smith

Photo by ThisisEngineering RAEng on Unsplash

A staggering 75% of business transformations fail (Anand, 2017). Worryingly, the numbers are far worse for digital transformation — only 5% of organisations surveyed by Bain & Company considered their digital transformation successful, with 20% reporting flat-out failure (Baculard, 2017). In an increasingly digital world, combined with a global crisis that is forcing businesses worldwide to transition to remote work, it strikes me as concerning that such a vast number of companies will struggle to adapt to the lasting effects of the global pandemic.

We are already seeing evidence of consumers’ preferences shift to digital-first offerings. In the retail, banking, and healthcare sectors, as well as many others, the pandemic has accelerated a move toward virtual service delivery. Inside corporations, it is not unlikely to expect a dramatic shift in the time spent working in-office vs. at home. A recent Gartner report revealed that over 70% of the CFOs surveyed planned to move at least 5% of their workforce permanently remote. And companies like Shopify, Facebook, and American Express are offering 100% remote-work either permanently or beyond 2021. It is clear that the digital/virtual revolution is happening. But if only a small fraction of businesses succeed with their digital transformations, we may start to see recognisable, once-strong organisations begin to struggle.

Why are digital transformations so difficult, and why do so many fail to meet expectations?

Back in 1960, the issue of digital transformation was not a pressing one. At the time, the hot topic, at least in academic circles, was the product launch — and the desire to explain why 70–95% of product launches failed. Theodore Levitt, a marketing professor at Harvard Business School, proposed that the failure rate is due to marketing myopia. The core thesis behind marketing myopia is that businesses frequently become too short-sighted in the development of new goods and services, and forget to take into consideration the wants and needs of customers. Companies that continue to grow successfully, he suggested, are those that are customer-oriented as opposed to product-oriented. These customer-oriented companies can much more effectively cater for the shifting desires of the market because they are not singularly focused on producing incrementally better products, but instead can provide a more complete offering that solves the problems that the customer is actually facing.

Levitt uses the example of the decline of the American railroads to describe how railroad tycoons remained confident that Americans would continue to use trains for travel, even after the advent of cars & planes. The product-oriented railroad executives failed to recognise that people were interested in transportation and not trains. We recognise a similar pattern today with Uber & Lyft — people want transportation, not taxis.

If marketing myopia is a short-sighted focus on product development that misses out on the needs of the customer, then we may have an equivalent today that speaks to the failure of so many digital transformations — tech myopia. The development of tech for technology’s sake. Tech myopia describes the development of technological products, services, and tools that are built to serve the needs and desires of the engineers and developers that built it, rather than for an end user who would actually pay for it.

Similarly, in corporate transformations, tech myopia describes the phenomenon of companies that undergo digital transformations, upgrading their legacy infrastructure — while failing to consider how the transformation will ultimately benefit their customers. I would go as far as to argue that business transformations should not be considered unless there is some eventual benefit to the end customer. For example, even when assessing a project as internally focused as a supply-chain management solution, if it does not create cost-savings and efficiencies that can ultimately be passed on to the customer, it should be reconsidered. To avoid tech myopia, everything a business does should keep the customer in mind.

How can businesses avoid tech myopia?

There is no single answer as to why digital transformations fail. In large-scale organisational change, there are an incredible number of moving parts. I don’t pretend to offer the one-stop-solution to prevent these failures here. Rather, I offer two customer-centric tools that I have seen successfully put into practice in my consulting career. Below I outline the two tools that may help business leaders to clarify their thinking around organisational change and avoid the dreaded tech myopia.

Ethnographic Research

A fancy way of saying: talk to customers, and observe them in their own environment. Conducting ethnographic research allows the observer to pay attention to pain points throughout a customer’s journey and identify different needs that arise. This type of research works best at the beginning of a potential project. It can serve as a useful tool in research & development and can serve as the catalyst for new projects. Taking the time to talk directly to customers first ensures that the voice of the customer is considered from the start, as opposed to being shoehorned in at the end of a product development lifecycle where it is too late to make significant changes.

After identifying potential pain points through ethnographic research the next question should be to ask: can these problems be solved with technology? If so, it could be evidence to support technological development. But also ask: is a technological solution the most efficient and effective way to solve this problem? Or would a simpler alternative provide a better outcome? The objective is not to find every possible nook and cranny in which to shove tech. Rather, it is to dispassionately observe potential customers in their environment; identify the problems, pain points, and needs in their journey that the researcher’s business has the capability to alleviate; and to uncover the top priority and most rewarding pain points on which to allocate the organisation’s scarce resources.

Customer Journey Mapping

Within the context of a business, it is important to take into consideration the end-to-end customer journey. Many businesses think about internal processes first, then begin worrying about how the customer fits in. This approach is upside down. With customer journey mapping, a company begins by mapping every single experience a customer might have in a specific journey. The next step is to work through the internal processes and technological systems that need to be in place to support those experiences.

For example, consider a health insurance provider that is deciding whether to invest in a new technology that would enable the provider to send out reimbursements faster. The company might map out a number of different customers’ journeys over the course of a typical week or month by charting every single interaction that a customer would have with the provider — including those that are not direct interactions but may still influence the experience (such as an interaction with a pharmacist when refilling a prescription, for example).

After mapping out the journey from a customer’s point of view, the provider can then map the internal processes or organisational activities that support each step of the journey. Furthermore, as shown in the graphic below, the provider can identify the relevant technology systems that enable each of the organisational activities that support the overarching customer experience. If, during the customer journey mapping exercise, the health insurance provider uncovered that a customer might not be able to afford to pay out-of-pocket for important prescriptions due to a cumbersome and slow reimbursement process, the provider has validated the need for the new technology. The company can confidently direct resources to the new technology to fix that problem for the customer. The need for investing in the new technology is made clear by its impact to the end customer’s experience — and helps to avoid wasting resources on technology that has little to no impact on the end customer.

Customer Journey Map Example by Columbia Road

Two terrific tools, but no silver bullet

Ethnographic research can serve as a great starting point for research and development for new products and technologies. Customer journey mapping can be used as a single source of truth to guide organisational transformation. These tools won’t solve all of a businesses problems, and they won’t save every digital transformation failure. However, approaching technological development and business transformation with a customer-centric toolkit is one way to mitigate the pitfalls of tech myopia. Ultimately, the end customer is the reason that a business exists, and as the pressure of the global pandemic forces companies to look for ways to satisfy the demands of the market without physical interaction, my hope is that the next wave of technological innovations and digital transformation produce results that make all of our lives as customers better off.

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Sources:

Anand, N., & Barsoux, J.-L. (2017). What Everyone Gets Wrong About Change Management. Harvard Business Review, 95(6), 78–85.

Baculard, L.-P., Colombiani, L., Lancry, O. (2017). Orchestrating a Successful Digital Transformation. https://www.bain.com/insights/orchestrating-a-successful-digital-transformation

Levitt, T. (1975). Marketing myopia. Harvard Business Review, 53(5), 26–183.