Oddly (and fortunately), for our team at Oxi Analytics and a number of companies like us, Coronavirus COVID-19 hasn’t changed the way we work. We’ve been using a remote globally distributed workforce since our founding in 2015. Remote working has been presented as a challenge for businesses, but we chose this model pre-pandemic because we believe that it has a number of advantages which lead to better client, team and business outcomes. Our people can work from wherever they like as long as they can get a reliable internet connection. For us, “digital first” and “digital by default” are not Buzzwords they are the stuff of everyday working.

I find myself wondering whether the “challenge of remote working” might force a cultural shift that will result in a number of advantages, that companies might not have expected.

The Competitive Advantage of Remote Working

Our experience is that clients respond to our model, as it offers excellent quality at significantly lower rates than our competitors, as well as providing a highly responsive service. This means our clients trust us with critical work and it is the remote globally distributed model that has helped produce these results.

We’ve had clients we have only ever met over Skype or Zoom – and our relationships with those clients are strong. It is working together on problems, helping each other and being available when your client needs you that builds relationships and you can do those online, often more easily.

So, how can this be the case? What are the advantages that made us choose this model? Why does this way of working result in better client, team and business outcomes?

Trust is Key

Firstly, let’s talk about trust, because it underpins this way of working. Trust is vital, between the team and between clients and the team – trust in people, in their commitment, in their skills and in their efforts and in shared work standards. This trust also enhances peoples focus and dedication to their work and their colleagues. Building a culture and managerial style that supports this is a key part of reaping the benefits of this model – and when it is lacking, none of the benefits will be seen and problems will develop.

People are still accountable. But now, it is the quality of outputs they deliver that they will be evaluated on, not the time they are watched in the office. This promotes efficient use of time and higher productivity, shifting the focus to deliverables and outcomes rather than office dynamics and politics.

Flexibility and Responsiveness

Giving a team the responsibility of working from home remotely and flexibly can in our experience deliver fantastic results. It is liberating rather than oppressive. It means you can go for a walk, visit the gym or do essential tasks when it suits you. This means the team optimise their personal time for their well-being, which in turn supports their productivity at work, but also means that the flexibility is there to ensure that client needs are always able to be prioritised. This also increases flexibility and responsiveness in communicating with each other and clients, something especially important when working with team members and clients across time zones.

The results of the model for our team have been:

• Improved productivity
• Improved responsiveness to clients
• Improved team member well-being
• Improved coverage of working hours

From a client perspective there are a number of linked benefits. Responsiveness, even from a small team working from home can be high and any issues, quickly responded to and dealt with. This responsiveness and high level of customer support has a major impact on strengthening customer relationships and building trust.

Furthermore, having a remote global workforce means costs can be lowered and at the same time development cycles reduced. Work handed off at the end of the day to a different time zone can be progressed overnight, saving client’s time as well as producing results more quickly.

The results for clients are:

• Reduced costs
• Reduced work cycles
• Improved trust
• Improved availability of support

Talent Selection and Retention

The other significant advantage is how such a model opens up a global talent pool. No longer constrained by office location, the best individuals can be selected for. These are often the types of individual that will see flexible working arrangements as a great benefit. The model, therefore, not only helps attract top talent, but can help to retain it, as it will allow them to integrate work with changes in their personal life such as moving home, getting married or moving to a new country  to name a few.

“But we need someone onsite… don’t we?”

We have sometimes found clients ask about the need to be on site. We have worked on-site and do meet clients from time to time, usually as part of attending their on-site meetings when required. Our experience is though that the increased cost associated with being on-site, combined with the reduced flexibility and the fact that once we start working together trust is rapidly built, usually means clients move to a fully remote model pretty soon after a project kicks off.

There is one occasion on which clients tend to feel more strongly about this and it is usually when technical teams are looking to achieve some skill transfer. This can be because they want to develop new skills or to be able to pick up the systems themselves after the handover of a system or project. However, in reality this is also something that is better managed online. Remote working relationships and arrangements are far more flexible for supporting people in acquiring new skills. This is because the support is available when you need it, just a call away, rather than having someone on site who you watch. Skill transfer is achieved by being supported when you need it, as you try for yourself and get stuck, not when watching someone else work (that’s what resources such as Tableau’s training videos are for – and they are free!).

Evolving Business Models

The IT sector includes large Indian outsourcers who operate at scale. Reports suggest that they have struggled to switch to home working in response to Coronvirus COVID-19 and are seeing significantly lower Productivity. Their established cultures and ways of working don’t seem to be compatible with remote working. They will need to make a significant cultural and managerial transition. For people used to turning around to talk to a colleague, there is we accept a learning curve, but if you can adapt to writing a chat in Teams  or Slack or Skype (and making sure you respond to them), or jumping on a call – it’s just a question of habit.

Remote working is clearly safer in a world which is vulnerable to pandemics like Coronavirus COVID-19. But as mindsets evolve and remote home working becomes more prevalent it will prove to be cheaper, easier, simpler and greener. Much existing infrastructure can be simplified and replaced with more cost-efficient web services. Simplifying businesses makes them more focussed, reveals activities which add no value, makes such activities easier to drop, making it easier to reorganise and realign people and activities, making companies leaner and reducing fixed costs.

Cyber security and privacy are a potential issue, but not insurmountable. Our information policies are already built around remote working and remote data access. Our people are all savvy professionals. Our policies follow the regulations and high standards of the UK, the jurisdiction in which our company is registered. Our clients’ data rarely strays beyond their firewalls; as we remotely access it, transform it and develop applications within it.

However, there is one accessibility issue in which remote working causes significant difficulties which are hard to address. And the problem is caused by the accessibility of snacks in the home fridge. That is where there is the greatest challenge to self-discipline in remote working. Everything else is easy by comparison.

Warren Buffett recommends that consumer firms “put a moat around their brands”. But the arrival of digital-first competitors means they might need something more up to date. Consumer firms’ strategic positioning rests on the power of brands – so everything depends on a firm’s ability to defend its brands. We discussed recently how strategic dashboards can monitor and drive performance of  brands, but to defend a brand against digital first competitors needs something more.

The Digital Defence of Brands

Let’s look at a modern military analogy. The military look to detect threats as early as possible and invest in monitoring and early warning systems. Scenarios are prepared for and responses are planned and rehearsed.

Often in commercial settings incursions by digital first competitors will only be recognised once brand performance is suffering. By this time, much of the damage is already done, market share will be affected, and more time will be lost  while a response is formulated and implemented. To effectively defend a brand against digital attacks, firms need something more.

The good news is competition from new digital first brands is distinctive, and elements are predictable. Therefore, scenarios can be planned for, early warning systems set up and defensive responses rehearsed in advance. For example, a competitor launches a new offering which is a better fit for our consumer’s preferences and uses digital channels to target that segment at low costs. Our priority is to detect this competition from the start, not when the competitor starts to take share. What we need is a response time that can be shortened to match the problem.

So how can this be achieved? The answering is in designing analytics differently.

Designing Analytics for Digital Defence of Brands

Analytics for brand defence should be designed for specific scenarios. For each scenario we use analytics to;

• Develop scenarios
• Prepare a response
• Provide early warnings

Developing Scenarios

A variety of possible scenarios are developed during the design process. Subject matter experts should be consulted to identify scenarios. They share their experiences of damaging events and situations in which competitors exploited weaknesses. They are asked how they would attack our brands if they were a competitor. They are asked how they would identify an opportunity to take share from a competitor. Analytics supports this exploration, with techniques such as segmentation analysis, used to identify any mismatches between evolving needs and offerings. Analytics can also quantify the brand vulnerabilities as well as the overall likely impact of the scenarios.

Preparing a Response

Analytics also supports the subject matter teams in preparing a response to the scenarios. Hypotheses can be generated and tested and plans evaluated. Actions that could be considered and evaluated could be; releasing budget reserves, actioning digital marketing teams to engage the target segment with counter messages and counteroffers, paying special attention to early adopters, or tasking product development with creating spoiler offers. The costs and impacts of each of these actions can be modelled in advance and selected.

Providing Early Warnings

Once the scenarios that need to be detected are understood, monitoring of web and social traffic to detect the new competitor can be established. Listening out for digital conversations that are related to the characteristics of your scenario, will provide an early warning system and help you assess if it’s time to put the responses into action.

Digitally Empowered Fast Responses

Fast responses to events have value in many settings. Analytics is used, for example, in electronic trading rooms to spot arbitrage opportunities, in process industries where process parameters are continually adjusted to optimise yield, in demand side advertising platforms where ad buying opportunities are seen and taken in milliseconds.

In these situations, analytics can identify a pre-defined issue or opportunity, classify it and select a pre-programmed automated response. While brand defence is more complex and defining the scenarios and preparing the responses is more challenging, the principle is the same. We just need to apply it.

_________________________________

Analytics designed for digital defence make your brand defences stronger, and your responses to any threat faster and more effective. The vision is to reduce the vulnerability of your brands and make your defences so fast and intense that you will deter any attack. Perhaps that would constitute Warren Buffett’s moat after all.

As in the case of Reckitt Benckiser, well-designed strategic performance dashboards can have a transformative effect on a business. So, what are the important principles that make such dashboards effective?

Each day businesses carry out a great number of activities. However, some activities are more important than others. These are the activities on which the company’s strategic position rests. It’s these strategic activities that deliver exceptional returns i.e. above the market average. The success of a CEO’s strategy will depend on successfully communicating these priorities and aligning people behind them. At any scale, the only way to achieve this is through strategic performance dashboards.

A success story, I worked on and saw at first hand which always helps me illustrate the importance of well-designed strategic dashboards, was at Reckitt Benckiser in early 2001. We were developing a strategic dashboard for the CEO Bart Becht. He had just been appointed CEO of the company following a merger, which had left the company with a muddle of different brands across global markets. Bart’s strategy was to take this broad portfolio and turn it into a focussed a set of global power brands. Such global brands could then command premium prices. The challenge was that local market teams across the organisation were emotionally invested in the local brands they’d been nurturing for years. To be successful he needed to cut investment in local brands and challenge the investment behind the strategic activity of brand building for global power brands. Bart was very clear in what he wanted for the dashboard design. His design would focus everyone’s energies on building the power brands, monitor the associated activities and tie rewards to the performance of the power brands. Therefore, the dashboards tracked resources going into brand building and how successfully those brands were gaining market share. The performance was not only measured at global level, but at every responsibility area at every organisational level. The dashboard was so impactful, that teams across the globe would pin a copy of the latest dashboards to their team board. Over the following decade Reckitt Benckiser outperformed its own aggressive growth and profitability targets in every single year and Bart personally benefitted to the tune of £70 million in a performance bonus.

Every business’ strategic dashboard will be different, but there are some key principles and approaches that can be helpful to bear in mind.

Selecting the Right KPIs

KPIs fall into two groups. Input measures such as media spend, and output measures such as sales growth compared to market growth. It is important to measure KPIs that relate to both inputs and outputs. This is because some inputs have a long-term impact that can’t be measured by short term outputs. For example, media spend will have a long-term impact on brand health, while promotional spend will have a shorter-term tactical impact on sales.

The choice of KPIs must not be too complicated and good judgements must be made about which KPIs are most important to include. Good strategic performance dashboards KPIs are ones that cannot be “gamed”.

Engaging People in the Design

Engaging people in the design ensures that you reflect their understanding of the important relationships between the KPIs and the shared model they have of the business drivers. It’s important to ask people about past experiences and significant events which impacted on performance, to ensure that these are covered in the design.

The process of engaging people will also help surface a shared mental model of the business, which will be supported by the final dashboard design. It will also start the important process of standardising and gaining agreement on the definitions that will be used across the business.

Predictive Analytics

Predictive analytics has a specific role to play in strategic dashboards. By projecting results weighted on a recent trend, it can provide a warning of the significant impact a deviation might have unless early corrective action is taken. Drawing attention to these before they become obvious concerns (or problems), is a powerful tool.

Visualisation and Dashboard Design

Designing a dashboard is an art, but it’s one that’s based on an understanding of what’s important, an understanding of the relationships that exist between drivers and outputs and the way that people think about the business. This means that it isn’t something that can be achieved without having followed the previous principles and having gained a real appreciation and understanding of the business.

A strategic performance dashboard design is one people will be looking at regularly. That means that the design can be a little more ambitious or complex, than it otherwise might be; a lot of visuals are designed to be understood intuitively, but as the expectation here is that people will develop a high level of familiarity with the dashboards, there is more leeway. Bad design will, however, render the dashboards ineffective.

_________________

Well-designed dashboards monitor strategically important activities and the specific priorities within them. They provide early warning signals of under-performing or misaligned activity and its predicted impact. It highlights causal issues so that they can be addressed promptly. The speed with which users agree and implement action reflect their confidence in a shared causal model of the business.

COVID-19 is changing the world and hitting retailers particularly hard; but in the medium to long term, might these changes lead to new opportunities for retailers and help level the playing field with e-commerce giants?

Changes Inspired by COVID-19

So what are some of the longer term effects that we might see as a result of this pandemic?

A Greater Willingness to Share Data

In Singapore 630,000 people voluntarily downloaded the Tracetogether app, released to help fight the coronavirus, COVID-19. The app logs mobile phones which come into proximity with each other. The Korean and Singaporean health authorities have shown that it was possible to contain the outbreak within a month, using the data from these apps to target “trace and test” programs – tracing and testing contacts of infected people. Other governments are now planning to use these apps to assist with their trace and test programs, to contain any resurgence of COVID-19. Such technologies and approaches may also be important for retailers, restaurants, sports clubs, venues and communities looking to help protect their customers and staff.

The use of the apps is expected to be voluntary, but the social pressure to use them will be intense. People are more than ever aware of the value of their data and their right to control how it’s being used. For years people have shared data with Google and Amazon for convenience, but now they will be asked to share data with the health authorities to save their lives, their families, their communities and their economy from coronavirus. The likely result of this will be a greater willingness on the part of individuals to share data, especially when it creates wider social benefit.

Change in the Demand for Local Deliveries

The second big change induced by COVID-19 is the ramp-up in local deliveries. Providers of essentials are ramping up local deliveries and actively supporting their local communities. Local retail stores are becoming an important source of deliveries of essential goods and retail staff are being employed picking and filling orders. Retailers sharing a location are collaborating on deliveries. Tens of thousands of new delivery personnel have been recruited by retailers and hundreds of thousands of community volunteers are helping to make local deliveries to the most vulnerable people and to essential workers. Customer perception of the value and timeliness of local deliveries is changing, and local retailers are gaining experience of larger scale local delivery operations, as well as a surge in the amount of data they hold about local customers.

Coronavirus is Changing Community Attitudes

A third result of the COVID-19 lockdown is the deeper recognition by everyone of the value of local facilities in creating attractive locations for social interaction. Retailers have been making big efforts to create attractive surroundings to encourage greater footfall and providing more experiential shopping experiences. Amazon creates soulless out of town warehouses. The pandemic is reminding people of the value they place on the mix of local facilities that vibrant retail makes possible; restaurants, clubs, gyms, libraries, and cafes as the hub of the local community. There is likely to be a refreshed perception of the value of local providers of services to the community.

What These Changes Could Mean For Retailers

Collaboration on local delivery could persist and evolve. Local retail has a competitive advantage over large e-retailers in fast, last-mile distribution, using its retail locations, but has been slow to take advantage of this (notable exceptions such as Matches Fashion, not included). Retailers will need to achieve scale efficiencies and local retailers could continue to collaborate on deliveries, learn from their recent experience, scale and innovate to take full advantage.

New willingness in data sharing will also persist. New data on local customers will have been acquired and customers that have become more community-minded could give permission for their data to be shared in ways that benefit local providers to that community. Visitors may become comfortable with retailers logging their visits by phone proximity and allow that phone to be linked to the retailer’s customer database.

Everyone that values retail as part of the community hub and wants to save it could continue to cooperate. That includes retail tenants, landlords, local authorities and government and, most of all, customers. Regulators are likely to be supportive of any changes which help and protect vulnerable people and support their community hub. People may also come to realise that sharing data is necessary to enable better local services that can compete with Amazon on choice, cost and speed. It could support collaboration between local providers that could resuscitate communities, building an identity for each locality that draws on local produce, services, art, music, heritage, culture and craft, and that enlivens that community by sponsoring events and visitor attractions.

Competing with the Amazon Model

Taken together, and in the longer term, this could permit local retailers to level the playing field with firms like Amazon and the big delivery aggregators. They will have a competitive advantage in better, faster, lower-cost, large scale, last mile delivery from their locations.They will potentially have better customer data than Amazon and the delivery aggregators with a 360-degree understanding of their customers. 

This means adopting the same data strategies as the on-line firms, making the case to customers for data sharing. They will have both on-premises and on-line businesses across which they can enhance customer experiences. They can collaborate to beat Amazon by making their locations attractive, social community hubs, sharing data across all kinds of types of outlet, cross-selling with joint promotions and events. It is not asking people to accept lower service levels and higher prices, it is providing consumers with competitive prices, faster low-cost local delivery, rewarding social experiences and a positive community identity.

All crises lead to change. The National Health Service came out of the change in social attitudes brought about by the second world war. This crisis will leave us with new attitudes, new experiences and a shift in priorities. Data sharing will need to continue to control the virus. New collaborations and delivery services will generate new data, a substantial proportion of the population will be willing to give permission for their data to be shared with the community for the benefit of the community, and to help to transform local services. Retailers could take advantage of the changes in priorities and in attitudes to create a new era of community and customer collaboration and innovation in services.  It seems that data and analytics are central in the short term to ensuring that the bounce back from this economic shock is not interrupted. Data and analytics will also be central to supporting understanding, collaboration, innovation, competition and community in the long term. People will have a simple choice; share data with your local providers of services and get enhanced low-cost services and a hub for your social and community life or refuse and watch your locality and community being hollowed out.