There’s a very real dichotomy within businesses across every industry, and within every business unit and function. In an era of uncertainty, executives are mandating that organizations do more with less and drive business growth. In the mind of a COO, CFO, CRO, CEO, or among the board of advisors, these directives may seem mutually exclusive. But they must happen together, at the same time. Cutting, automating, and pressuring growth cannot be done in a vacuum. They must be examined from the perspective of those whom they affect or how they impact desired outcomes—consider employees, customers, and prospects. When looking at problems and opportunities through a human lens, different and more thoughtful and creative approaches come to light.
Since 2020, companies very quickly were compelled to accelerate digital transformation to survive as the world shifted, overnight, to digital-first behaviors. Then, just two very long and also short years later, companies were then again challenged to reassess strategies and investments to contend with a world simultaneously opening up and slowing down.
From supply chain disruptions to inflation to economic uncertainty, leaders had to then reexamine roadmaps and budgets to make hard decisions on where to cut, where to stall, and what to prioritize. All important areas worthy of careful consideration. In fact, doing more with less and driving business growth should always be an organizational mantra. But these elements can never come at such great opportunity costs that they risk not only growth, but also inadvertently spark market regression.
The Illusion of Momentum
When companies think of optimizing resources to drive growth, they lean on past experiences and momentum to guide cost-cutting, investments, and areas to optimize. That’s the logical thing to do.
Past performance is an indicator for making decisions against the future. But this assumes that the future, at least in the near-term, anyway, will look a lot like the past. Quarter-to-quarter results, market growth, profitability, can help decision-makers gain confidence in future performance. When things become more uncertain, the common sensical thing to do is analyze where cutting-costs, shifting resources and priorities, and delaying investments can encourage momentum. Unfortunately, and perhaps, counter-intuitively, these behaviors can also lead to short-termism, operating with a narrowly focused view that prioritizes immediate gains over the potential for exponential growth.
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Momentum is never guaranteed. And without intent, the illusion of momentum can also lead to over-confidence bias, which tricks executives into making decisions that will continue to fuel performance. You may feel more certain about your decisions based on historical outcomes, but eventual success is never guaranteed, especially in times that are not so clear-cut. If you’re not looking at emergent trends and understanding their potential impacts, they can slowly, then suddenly, manifest as disruption. This forces organizations to respond from a defensive position, one that’s not forward-looking or strategic.
Organizations are disrupted when people’s behaviors and expectations change. Entire industries and markets are disrupted when behaviors and expectations change at once and the same time. 2020’s acceleration of digital- and mobile-first behaviors represents disruption for those companies not prioritizing investments. This is especially true, not only in digital and mobile channels, but also how companies understand and meet or exceed customer expectations in ways that are culturally inherent and unique.
Cost-Center vs. Opportunity Costs
I get it. The pressure to cut costs and drive growth is coming from the very top and there’s very little you can do about it; that is, until you change the narrative.
In uncertain times, one thing can be sure, anything can happen, at any time, particularly to those not considering in advance, their opportunity costs. This is where doing more with less and driving growth cannot operate as mutually exclusive.
When we look at soaring enterprise adoption of automation as an example, it makes sense. Automation is playing a huge role in digital transformation budgets, with 95% of IT and engineering leaders prioritizing workflow automation. I’ve observed though, that many of these investments are aimed at optimizing legacy workflows and processes. This too, makes sense. Where it starts to break down is when you look at automation through the lens of the customer or the user. If automation reduces costs at the expense of the customer’s experience, they (customers) feel it. Think IVRs, poorly executed chat bots, impersonal mass emails, getting passed around representatives with no context or history shared between them, or basic transaction-based loyalty programs.
When you get to the heart of the matter, when we cut against experiences and their potential, why would we expect customers to feel anything other than frustration, disappointment, anger, and all the other emotions, that in real life, would add-up to an eventual break-up. That outcome only accelerates when a customer experiences what better or great feels like.
A mindset shift is essential in changing the narrative.
Optimizing workflow and processes is often done without assessing whether they facilitate the best possible customer or employee experiences, or even knowing what best-in-class automated experiences can look like. This defaults to an outcome of iteration, using innovative technologies to take what was done before and make it faster, more efficient and scalable, and cost-effective. This is a great starting point, as it saves time and money. But there’s more work to be done. Iteration is only one-half of building a growth accelerator toward a more productive and lucrative future.
The other half of a growth accelerator is innovation, which embraces shifts in mindsets, informed risk-taking, and investments in innovative technologies to create new value.
Iteration and innovation are mutually necessary to do more with less and drive growth in an era of uncertainty and beyond.
The Writing is on the Proverbial Wall
To do more with less (iteration) and drive growth (innovation) takes a level of awareness that breaks decision-makers free from the illusion of momentum.
Awareness is the ability to perceive, feel, to be present in the moment, and conscious of situations, events and conditions.
To increase one’s potential for growth also starts with increasing the appetite for strategic risk-taking and boldness, driven by the “why,” that spirit of meaning that helps make uncertainty, purposeful.
Start by considering this question, “what is the best way to touch and inspire my customer?” Then consider how processes and technology investments can enhance the customer experience through iteration and innovation.
New research from Salesforce that surveyed over 5,000 consumers reveals critical changes to consumer spending as a result of inflation and economic uncertainty. Understanding this sentiment can help companies rethink investments in doing more with less and driving growth.
Customers will become more thoughtful in their spending.
Eighty-one percent of consumers are reassessing their overall spending budget over the next 12 months with 80%
Consumers reassess spending across every industry.
Retail and consumer goods: 79%
Travel and hospitality: 77%
Media and entertainment: 70%
Regardless of cost-cutting measures, customer expectations for best-in-class experiences are only increasing.
Over half of consumers expect a better experience from companies as a result of the current economic conditions.
Having a disconnected experience is consumers’ number one frustration when dealing with organizations. Asking questions that have been answered before is consumers’ number two frustration. And at number three, consumers feel frustrations when being offered products that aren’t relevant to them.
Poor quality service is the number one reason consumers will stop purchasing from a company.
Over 60% of consumers expect companies to react instantly with the most up-to-date information about them when interacting across departments.
Customers are clear about what they want to see from companies to improve experiences, and it doesn’t start with cutting costs at their expense.
The top two most important factors when purchasing from companies are 1) value for their money and 2) ability to meet their needs quickly.
Today’s consumer is more likely to value a connected experience.
Sixty-five percent of consumers will remain loyal to companies this next year if they offer a more personalized experience.
Seventy-two percent will remain loyal to companies this next year if they provide faster service
Trust becomes paramount and trust is largely measured by data protection.
Seventy-six percent will remain loyal to brands that provide better data security to protect their personal data.
Beyond Where and When
When it comes down to it, it’s creativity and resilience that drives ingenuity and innovation, especially in times of uncertainty.
This is more than the automation of legacy processes. What we’re really talking about is empathy, the ability to not only, in this case, apply data and insights to understanding someone else, but also using digital to foster more personal experiences, connections, and relationships.
Doing more with less and driving growth must balance opportunity costs with risk tolerance, organized by iteration and innovation mindsets. What won’t work is adherence to a legacy model, mindset, and metric system that was already outdated before 2020.
International Grandmaster chess player Savielly Tartakower once said, “Tactics is knowing what to do when there is something to do. Strategy is knowing what to do when there is nothing to do.” This reflects the difference between short-term thinking and long-term ideation, the difference between iteration and innovation. In this new economy, growth accelerators can’t solely scale the past. They are also balanced by building toward a new future.
Start with finding your “why.” This will help you see not only creatively, but more purposefully how to add value in doing more with less and unlocking meaningful growth.
Legendary Apple design chief and founder of LoveFrom design studio, Jony Ive, was once asked for advice by Airbnb Co-Founder and CEO Brian Chesky as the company faced economic uncertainty.
“You aren’t going to cut your way to innovation,” Ive told Chesky at the time. Instead, Ive challenged the CEOto think “beyond where and when” – the title of a book of inspiration he made for Chesky – and to instead think of Airbnb as a company about “connection.”
“Beyond where and when” is a fascinating way to think about things as it challenges you to think beyond the invisible parameters, anchors, and biases that form the canvas of the status quo. Beyond where and when inspires us to think about the “why” of any change we make, our purpose for growth, and how we can, logically and creatively, achieve our goals along the way…through investments in iteration and innovation.
In the end, it all comes down to people, knowing them, serving them in ways they value, and uncovering new ways to add value throughout the relationship. Digital helps us become more human.