Almost everyone I know can describe the future of their industry. In this future, brands know their customers. They personalize their experience. They reward their loyalty. Brands create smarter products that use connectivity and sensors to mold themselves to our lives and inspire us to be at our best. They are powerful tribal leaders of the digital and physical communities that rally behind them. They have managed to create seamless fluid experiences that meet every expectation and desire, no matter how minor or personal.
Almost no one I know is confident they’ll be able to realize that future anytime soon. Why is the future so hard to bring to life? The list of what and who to blame is as long as the Kerouac Scroll. The problems range from departments and divisions acting as silos, to a lack of leadership, of funding, of consensus, and even claims customers aren’t ready or don’t want things to change. And even when all these issues are absent, progress rarely happens at the pace we’d hope for.
Based on my experience though, there are two dynamics that act as stumbling blocks for almost every business:
1. Integrated vs. Fragmented Systems
In the now infamous biography of Steve Jobs, Walter Isaacson describes the Apple worldview as an integrated system, one where Apple attempts to control every aspect of the user experience right down to the screws inside the machine. The rest of the technology world, led by Microsoft and Google, promote an open system model (dubbed fragmented by Jobs/Isaacson), where software and hardware are compatible across a broad range of devices and brands. Peek under the hood at how most brands manage their customer experience, and you’ll find stunningly fragmented systems, where a Frankenstein of databases and software have been cobbled together to make things work. My favorite example: call almost any 1-800 number for customer service. You’ll be asked to enter your account number. You’re then transferred to a representative who asks you what your account number is! This insanity is standard.
Creating an integrated system across the entire customer experience is a massive undertaking, but it’s impossible without getting a couple of core things right. The one that rears its head in our boardroom most often is the customer relationship management (CRM) system. Everything from knowing what a customer wants and likes to what they bought last must be stored in a database somewhere in order for a brand to deliver more personalized and relevant service. This is where CRM systems come in. Every time you rate a product on Amazon, their system notes your preference, and uses it to show you something even better next time. The problem is, most CRM systems are positively archaic. Even Salesforce.com (the proverbial new kid on the CRM block) falls short when compared to the elegance we hope for in an Apple economy. What’s more, because sales teams and other crucial functions depend on these systems and have augmented and built upon them for years, most CRM systems are like the bottom block of a Jenga puzzle – liable to topple at any moment. As a result, everyone is terrified of ripping things up and starting over. And starting over with an integrated worldview means everything else that touches CRM has to change too. It’s seemingly too much to bear.
2. Adaptive vs. Static Systems
The second dynamic holding us back is that most legacy systems were built with a combination of hardware and software that is very hard to change. Take a look at the cash register screen the next time you check out at the grocery store. When’s the last time that thing got an update? The problem with these expensive and static systems is that they were built to last instead of built to get better, and as our vision of a fantastic customer experience has changed, these systems have held us back. If Zynga wants to test a new feature in one of its popular game titles tomorrow, it can push an update to millions of users in just a few minutes time, and watch what happens for clues to its next move. If the local grocer wants to try the same thing, they’re looking at a capital expenditure in the millions. So, of course, they don’t innovate. They are trapped.
As consumers in a new digital age, we are all trapped by fragmented and static systems. As business managers we’re trapped by the decisions of those who came before us, and the cost of moving forward seems too high to bear and too complicated to get right. But if we want to see the future that we know is possible become real, something’s got to give. Like the dinosaurs and the asteroid, I suspect that something fundamental about survival is changing under our feet. I just hope that some of our favorite brands bite the bullet and start acting like startups before it’s too late.