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The Wall Street Journal: What Keeps Companies From Thinking Digitally?

Clara Shih, CEO and author, says the problem is often a lack of leadership

MCX110113_147Consumers are spending more and more time online and on social-media sites. Yet many companies have yet to adapt.
That’s the argument made by Clara Shih, chief executive and co-founder of Hearsay Social Inc., a maker of digital marketing software founded in 2009, and a director of Starbucks Corp. Ms. Shih – who has written a new book on the subject called “The Social Business Imperative” – argues that every company needs to accept the fact that it, too, must become a technology company.
In other words, opening a corporate Instagram account won’t cut it.
Ms. Shih spoke with The Wall Street Journal about her role at Starbucks and what’s holding larger companies back digitally. Following are edited excerpts from that conversation.
Everyone’s job
WSJ: What do you see as your role on the Starbucks board? Is it fair to say you’re a digital ambassador to the company?
MS. SHIH: My job is to be a director. You can initially start with digital ambassadors, but ultimately digital becomes so strategic that it’s everyone’s job. You can’t delegate it to a single director or small group of directors. You can’t delegate it to a social-media team or to the digital team. It really has become everyone’s job, whether you’re a CEO, chief marketing officer, front-line salesperson, customer support.
I contribute like anybody else. I ask questions. I offer specific insights. The questions and insights that I tend to volunteer often come from the Silicon Valley startup culture. I by no means am the only person who asks those types of questions, nor are those the only types of questions that I ask.
WSJ: You joined the Starbucks board in 2011 and now it’s 2016. How has the company evolved in that time?
MS. SHIH: We continue to become more technology-oriented. A number of the directors are really digitally savvy. It’s really independent of tenure and generation. I think having Kevin Johnson – having been an executive of Microsoft and Juniper – appeals to Starbucks in that this is a technology executive who really infuses that DNA into Starbucks. It’s further reinforcing that Starbucks is a technology company.
WSJ: In your book, you argue that, today, every company has to be a tech company. What does that mean?
MS. SHIH: You have to be where your customer is. If your customer begins their buyer’s journey online or if they want to complete their buyer’s journey on social, mobile and digital, of course, you have to be there too.
When I think of the store experience, it’s not just the physical merchandising and layout of the store. People are often on their devices when they’re in the store, so part of the store experience is the Wi-Fi, it’s the content we can deliver through the Wi-Fi, it’s the mobile app.
WSJ: Are companies embracing this perspective?
MS. SHIH: I think most are doing something and they’ll acknowledge that technology and digital are important – but it’s all about execution. Transformation is much more than putting up a Twitter account and training your customer-service rep or marketing team to tweet.
The need for leadership
WSJ: What’s the stumbling block?
MS. SHIH: Here’s the thing about companies: They’re made up of people. Of course, there are people within the company who view technology and innovation as imperative. But there are also a lot of people, especially in big companies and especially in regulated companies – take any of the banks that Hearsay works with – whose job it is to minimize risk. We see this with Hearsay, too, where a chief marketing officer or a head of sales will say, this is great. Then somebody in compliance looks at it and because their mandate is to reduce risk they say no. That’s why companies can’t move forward. They kind of get stuck.
Unless CEOs personally take ownership for digital and innovation, it’s not going to happen, because there’s going to be an impasse with the people that want to go forward and the people that don’t.
WSJ: Any good examples of an older company that has transformed?
MS. SHIH: I saw many, and I’ll share one such story with you and that’s John Hancock Insurance. Traditionally, [insurance] was an entirely offline experience for everything from purchase to claims. The second issue is they don’t have frequent touch points. Most of the time you buy insurance and then you never hear or want to hear from the insurance company again until there’s a claim.
Last year, John Hancock partnered with a company called Vitality [owned by South Africa-based insurance company Discovery Ltd.] and they launched this new program in the U.S., where they provide free Fitbits to their insurance customers for the purpose of encouraging them and tracking how active they are. They realized that all the actuarial tables show that the more active you are, the longer you’ll live, the healthier you’ll be. They said, instead of being this passive assessor of risk, what if we became an active coach?
WSJ: How can other companies be more digitally oriented?
MS. SHIH: Every company wants to be innovative, they want to change. That’s why they come out and do these visits in Silicon Valley and they launch these innovation labs. Most of the time, it doesn’t work out.
It’s because there are two issues. One, the company culture was established to be very risk averse. Two, which is related to culture but is more process oriented, is that it’s hard to take an idea and operationalize it. Imagine having 200,000 employees and trying to get everyone to change direction. That’s a struggle that many companies face right now.
Original article published May 30, 2016, in The Wall Street Journal.

Message to Advisors: Put the 'Custom' in Your Customer Experiences

Remember when it used to feel like Big Brother was watching you when a website remembered you had visited it before? These days, one could argue it would be downright annoying if a site you signed up with didn’t remember who you are, where you live, how you want to pay and what actions you performed in the past, whether they were things you had searched or purchased.
Thanks to technology, our expectations around the customer experience have changed dramatically in just a few short years. We are more comfortable with providing information about ourselves, as long as there’s a benefit or payoff that we want. At the other end, companies are innovating the way they use that personal data to provide increasingly customized experiences, which in turn make it easier for customers to offer up even more personal information.
In Mary Meeker’s recently released 2015 report on Internet trends, she makes the case that we’re now at a point where consumers not only want, but expect experiences on their terms – getting what they want, when they want it, and how they want it. She points to several technology startups who are leveraging smartphones and GPS to provide consumers with personalized, on-demand products and services via a few taps of a mobile app. These companies are disrupting a variety of industries, including transportation (Uber, Lyft), food (Caviar, Munchery, Sprig) and travel (Airbnb). As technology startups that use data to provide an ultra-personalized, ultra-convenient experience capture more and more market share, the threat to institutional companies is real.
For financial advisors and agents, the lesson here is clear: You need to engage with your clients and prospects when they want to hear from you and how they want from you.
Consider these three tips:
1. Listen for life signals
You’re well aware that there are certain key events in a person’s life that are opportune moments to reassess their financial situation: a new child, marriage, car, living situation, educational opportunity. And thanks to social media, many people announce these changes to their social networks. Rather than leave it up to luck to be in the right place at the right time – or, worse, be in the dark altogether – build your social media presence and leverage technology to help you quickly identify these important life events happening in your social networks.
2. Be omni-channel
A big part of providing a personalized customer experience is giving them a choice in how to communicate with you. The ability to provide an omni-channel experience – where interactions move seamlessly between online and mobile SMS and phone and in-person – is increasingly important in this hyper-connected era. By being findable and available on multiple channels and platforms, the easier it is for customers to engage with you.
3. Focus on the relationship
At the end of the day, the financial services business is built on personal relationships, and that means showing customers and prospects that you’re more than just an advisor selling financial products and services. Thanks to social media and technology, you can easily share the non-professional side of your life – your interests, friends and family, community service work. You might be surprised at how many customers are happy to share the same with you.
How are you delighting your clients and prospects with custom experiences?
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Change, cooperation, and the transforming customer experience: Notes from the 2014 LIMRA Europe Annual Meeting

LIMRAStrategicPartnerLast week’s LIMRA 2014 European Annual Meeting was my first insurance conference,  so I didn’t quite know what to expect. As it turns out, when you bring together a diverse group of people from Europe, Asia and Africa–and add a bit of Paris magic–you come out with some impressive results.
In this recap, I’ll cover key takeaways from LIMRA’s meeting including:

  • Demographics is a key driver of change.
  • Make customer experience essential to your organization.
  • Gamification is important for engaging consumers.
  • Bancassurance is here to stay and increasingly relevant in newer economies.
  • Digitization will change how we interact with our consumers.
  • Cooperation is key to organizational success.


Day 1: Improving the customer experience

Robert A. Kerzner, President and CEO of LIMRA, kicked off the event, setting the stage for changes happening in the insurance industry. Because demographics is by far the biggest driver of change, he argued, firms should give more focus to retirement as opposed to life insurance. He also believes that the world of insurance agents and commissions is changing, especially in developing economies.
Mr.  Kerzner spent a greater part of this presentation discussing companies from other industries (e.g. Coca-Cola, Walmart, Disney, Virgin) and how the insurance industry can learn from their own efforts to improve the customer experience.
Other presenters from the first day hailed from diverse walks of life, providing more intellectual and innovative ideas to delegates in attendance.
For example, Dr. Barbara Fasolo, Associate Professor in Behavioural Science in the Department of Management of the London School of Economics, spoke about her interest in “choice architecture,” and how to present information visually so users can make smart choices. Both Barbara and Robert brought up gamification as a smart way to increase consumer engagement.
Boston Consulting Group partner and TED speaker Yves Morieux spoke about the need for cooperation within teams, which he believes to be critical for companies to excel. He showed a video of the women’s relay team of France winning in 2003 and argued that they won–not because they had the world’s best runners (USA did)–but because they were better at cooperating with each other before, during, and after the race.

Yves Morieux sharing the simple rules of cooperation in business.

Later on, Hearsay Social’s Olivier Maire (@olivier_maire) presented to a packed room of delegates on the power of social business.  There were many questions on how to open up the social networks in a way that does not increase reputational risk.
We ended Day 1 with a fabulous evening at Pavillon Dauphine, punctuated with live music, quizzes, and a stand-up comedian act by Shappi who was absolutely hilarious!
On the second day we were treated to a magnificent view of the Eiffel Tower from our conference room for the duration of the conference. This provided a unique backdrop for the sessions presented by the CEO of Aviva France, CMO of Saxo Bank and others.

Day 2: Increasing digitization

The second day of LIMRA’s meeting was dedicated to practical advice on various topics ranging from social media to business models to affinity insurance. Nicolas Schimel, CEO of Aviva, gave a particularly enlightening speech around his views on where the insurance market is going and what Aviva is doing to adapt. He believes that the three biggest drivers of change for the insurance market are:

  • Increasing digitization for communication and consumer interaction
  • Bancassurance growing in newer economies
  • Redistribution of the tied vs independent agent mix

Based on a study by Rolan Berger Strategy Consultants, the largest type of buyer by channel of access is going to be more a “hybrid buyer,” or one who is going to use both face-to-face and digital methods throughout the purchase journey.
All in all, the 2014 LIMRA European Annual Meeting was the perfect introduction to insurance conferences for me–it was fun and insightful!