business strategy that takes advantage of
digital technologies. A great digital strategy
provides direction, enabling executives to
lead digital initiatives, gauge their progress,
and then redirect those efforts as needed.
The first step in setting this direction is to
decide what kind of digital strategy to pursue: a customer engagement strategy or a
digitized solutions strategy.
A customer engagement strategy targets
superior, personalized experiences that
engender customer loyalty. A digitized
solutions strategy targets information-enriched products and services that deliver
new value for customers. The best strategy
for a company will depend on its existing
capabilities and the way it wants to compete. The most important requirement for
a great digital strategy, however, is to
choose one kind of strategy or the other,
not both. A digital strategy aimed at operational excellence may appear to be a third
choice, but increasingly, operational excellence is the minimum requirement for
doing business digitally, not the basis for
a sustainable competitive advantage.
Customer Engagement Strategies The
focus of a customer engagement strategy is
the development of customer loyalty and
trust — and, in the best cases, passion.
Companies choosing this approach offer
seamless, omnichannel customer experiences, rapid responses to new customer
demands, and personalized relationships
built upon deep customer insights. Recognizing the always-rising bar of customer
expectations, companies with a great customer engagement strategy are constantly
identifying new opportunities to connect
with their customers.
Kaiser Permanente, an integrated pro-
vider of health care and not-for-profit health
plans based in Oakland, California, is follow-
ing a customer engagement strategy. Driven
by what it calls its “consumer digital strategy,”
Kaiser Permanente approaches health care as
a collaboration between care providers and
members. It uses digital technologies to pro-
vide seamless, low-cost access to provider
teams and to facilitate the delivery of both
curative and preventive patient care.
Kaiser Permanente capitalizes on digi-
tal technologies by:
• Offering digital channels that bolster
patient interaction with care delivery
teams. Kaiser Permanente’s channels
provide access to personal health records,
secure messaging between patients and
providers, and remote care.
• Applying data analytics to identify the
need for — and the most effective
approach to — personalized medical
outreach. Kaiser Permanente uses
analytics to track and improve patient
compliance with medication and treatment regimens, and to identify the most
effective forms of outreach for generating healthy behaviors.
• Leveraging social media to develop
communities of patients with similar
interests and needs, and to create “care
circles,” where patients and their families can engage with care providers.
Kaiser Permanente is using a carefully
crafted permission system to allow approved family members and other
caregivers to help support patients,
communicate with their physicians,
and monitor their treatment.
As a result of these efforts, 70% of Kaiser
Permanente’s members are actively engaged
in managing their health online — a behavior that the organization’s research indicates
is positively correlated with better member
health, adherence to treatment regimens,
satisfaction, and retention.
Digitized Solutions Strategies A digitized solutions strategy transforms what
a company is selling. It seeks to integrate
diversified products and services into solutions, to enhance products and services
with information and expertise that help
solve customer problems, and to add
value throughout the life cycle of products and services. Over time, digitized
solutions can transform a company’s
business model by shifting the basis of its
revenue stream from transactional sales to
sophisticated, value-laden offerings that
produce recurring revenue.
Schindler Group, a global provider of
elevators, escalators, and related services
based in Ebikon, Switzerland, is pursuing a
digitized solutions strategy. The company
leverages the internet of things — collecting real-time data from its installed base
of elevators and escalators and using that
data to improve the quality of its products
and services. Initially, Schindler focused
on operational excellence in its digital
strategy — using analytics to reduce the
costs it incurred in servicing its products.
But all four global competitors in the industry are improving their operations in this
way. So, Schindler shifted its focus to digitized solutions and began using data from
the internet of things to help prevent equipment failure, optimize elevator routes, and
identify potentially valuable innovations.
Schindler has developed a new urban
mobility solutions strategy that takes
advantage of its ability to manage the efficient movement of thousands of people
within a building. For example, the company has developed a digitized solution
that allows visitors to bypass lobby
A great digital strategy provides direction,
enabling executives to lead digital initiatives,
gauge their progress, and then redirect
those efforts as needed.
How to Develop a Great Digital Strategy (Continued from page 7)