The promise and pitfalls of digital operating models

Senior boss­es at a lead­ing char­i­ty were, like all exec­u­tives, wrestling with the chal­lenges of a work from home work­force. They felt they had a hap­py, pro­duc­tive work­ing cul­ture, but just to be sure, they onboard­ed some dig­i­tal help. 

They began using Win­ningtemp — an anony­mous employ­ee feed­back sys­tem — which allowed their staff to say what they real­ly thought of pro­ce­dures, office pol­i­tics and work­flow. Imme­di­ate­ly, the char­i­ty chiefs had sev­en instances of “neg­a­tive or obstruc­tive behav­iours” they were wor­ried about. This was a car­ing and con­sid­er­ate com­pa­ny, but they were blind­sided by such work issues.

When we’re asked if everything’s okay, we usu­al­ly say it is, says Carl Jacob­s­son, VP of cus­tomer suc­cess at Win­ningtemp. “How­ev­er, giv­en the oppor­tu­ni­ty to dis­cuss anony­mous­ly, staff begin open­ing up. AI pro­vides that anony­mous, intu­itive plat­form for giv­ing con­struc­tive feed­back.”

Apply­ing a dig­i­tal oper­at­ing mod­el (DOM) like Win­ningtemp to your busi­ness is like lift­ing the lid on a bee­hive. On the plus side, you can sud­den­ly see what all the work­er bees are doing and locate the blocks in work­flow. But if the colony doesn’t work in uni­son or the block­ages are allowed to remain, the hive will fail any­way. 

Setting staff loose

DOMs are a set of enabling tech­nolo­gies that fuse feed­back with AI and ana­lyt­ics to smooth the path for your com­pa­ny. They break down sys­tems into small­er com­po­nents, reveal­ing how the big­ger pic­ture works. Such tech­nol­o­gy won’t suit organ­i­sa­tions that sim­ply want to select a dig­i­tal prod­uct off the rack and hope for major results. 

A DOM can only suc­ceed if staff are empow­ered to make pos­i­tive adjust­ments and give use­ful feed­back, says Helen Ash­ton, the for­mer CFO of ASOS and now CEO of man­age­ment con­sul­tan­cy Shape Beyond. 

ASOS max­imised its dig­i­tal suc­cess by mar­ry­ing agile tech­nol­o­gy with proac­tive staff who all had a trans­par­ent under­stand­ing of data, Ash­ton says. The role of lead­ers with­in a DOM is to sup­port and allo­cate, rather than dic­tate, she says. 

“At ASOS, instead of think­ing the dig­i­tal­i­sa­tion jour­ney is done, teams are con­tin­u­al­ly think­ing of what’s next. How could the sourc­ing of fab­rics be dig­i­talised? How can AI or AR [aug­ment­ed real­i­ty] impact future shop­ping habits or improve speeds of deliv­ery? How could bots or avatars help cus­tomer ser­vice? Those ques­tions aren’t dri­ven down from the board: they come from the teams on the ground who are clos­est to the cus­tomer.”

Deliv­er­ing this kind of change with lega­cy tech­nol­o­gy is dif­fi­cult, slow and cost­ly. Before invest­ing, C‑suites should con­sid­er which prod­ucts tru­ly open the fron­tiers between cus­tomer and com­pa­ny. 

Nik­ki Hes­ford, MD of Hes­ford Media, helps SMEs expand dig­i­tal­ly. She says that even if com­pa­nies aren’t dig­i­tal­ly fac­ing, small oper­a­tional changes can be trans­for­ma­tive. 

“A plumber can have the abil­i­ty for clients to upload images or videos remote­ly, or a beau­ti­cian who used to waste ten min­utes at the start of each appoint­ment fill­ing in forms now has these sent before­hand using an online sys­tem. All this info is then stored secure­ly online, instead of in a fil­ing cab­i­net.”

One of Hesford’s clients is The Hon­est Mid­wife, a mobile mid­wife. Pri­or to Covid, appoint­ments were made in-per­son. How­ev­er, the switch to dig­i­tal pre­sent­ed a num­ber of oppor­tu­ni­ties to scale, and now the mid­wife teach­es over 2,000 expec­tant par­ents every week, com­plete with feed­back and after­care. 

Expose the problem, then fix it

But with so many com­pa­nies strand­ed in first gear by end­less dig­i­tal log­jams and web chats, a sin­gle dig­i­tal sys­tem won’t nec­es­sar­i­ly bring order to the chaos. Dig­i­tal inno­va­tion can smooth process­es, but bot­tle­necks caused by staff and man­age­ment will not be mag­i­cal­ly resolved, only exposed, says Pete Han­lon, CTO at Mon­eypen­ny. 

“If you build new tech­nol­o­gy solu­tions around inef­fec­tive busi­ness process­es or out­dat­ed organ­i­sa­tion­al struc­tures, you’re unlike­ly to see any ben­e­fits. Imple­ment­ing a DOM isn’t just about the tech­nol­o­gy; it only suc­ceeds if the peo­ple and the cul­ture trans­form at the same time. Along­side the tech­nol­o­gy, you need to chal­lenge the sta­tus quo. Gen­er­ate a sense of urgency, with clear goals and process­es to mea­sure suc­cess.”

The key to DOM suc­cess is the open expo­sure of data and per­for­mance. Often a data ware­house is “owned” by a spe­cif­ic depart­ment, says Ash­ton; its usage is restrict­ed or there are bar­ri­ers to extract­ing data. A com­pa­ny should there­fore ask itself some key ques­tions in advance. Do we want to make all our data and process­es trans­par­ent to each oth­er? Are boss­es ready to back a new sys­tem, allow feed­back and be pre­pared to remove block­ages – for exam­ple, a prob­lem­at­ic employ­ee – even if that becomes painful?

Next, you must pick the right fig­ure­head to lead the charge, says Ash­ton. A mis­aligned lead­er­ship, or a leader lack­ing lead­er­ship skills, will strug­gle to secure the momen­tum to deliv­er a suc­cess­ful pro­gramme. 

“Com­mit­ment to the cause will undoubt­ed­ly ebb away at some stage,” says Ash­ton. “Emo­tion­al engage­ment to a greater cause will stand the test of a trans­for­ma­tion, in a way that the promise of more mon­ey for share­hold­ers or low­er costs nev­er will.”

DOMs sim­ply may not be for every­one, says Sukhy Cheema, founder of Brand­ing Lon­don, which pro­vides dig­i­tal solu­tions for busi­ness­es. Most oper­at­ing mod­els only place impor­tance on time effi­cien­cy and risk man­age­ment, when we should appre­ci­ate that com­pa­nies are dif­fer­ent and run in their own unique ways, Cheema says. As a result, some DOMs aren’t dynam­ic enough, Cheema says. 

“The focus should instead be on help­ing that com­pa­ny know and find what they could be, whilst still mov­ing for­ward and reduc­ing risk.”