A new approach to omnichannel transformation success

It’s no secret business-to-business (B2B) companies across industries view omnichannel transformation as a pillar of their future success. Multiple studies have focused on the technology, analytics and process changes needed to be successful, but organizations still regularly experience omnichannel transformation failures. ZS research finds that while 90% of B2B and business-to-business-to-consumer sales executives say omnichannel transformation is critical, only 10% say their company has achieved the full potential of its objectives.

We spoke with more than 20 transformation leaders across various industries in an effort to shift the focus from “What does an omnichannel transformation look like?” to “How does an organization implement an omnichannel transformation?” We asked questions such as:

• How did the organization invest in the transformation?
• How was senior leadership involved?
• How were customer-facing teams involved?
• How was the transformation introduced and rolled out across the organization?
• What obstacles did the organization face when implementing the transformation?

These discussions led us to uncover three categories of organizational characteristics that most strongly correlated with omnichannel transformation success.

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This may seem overwhelming for organizations that haven’t yet started an omnichannel transformation, but our research found that the bar for success was relatively low. Organizations only needed to agree or strongly agree with four or more of the above statements to be 2.5 times more likely to succeed than organizations who only agreed or strongly agreed with three or fewer statements.

But it wasn’t just the number of statements they agreed with—the category mattered as well. All of the leaders we spoke with who oversaw successful transformations agreed or strongly agreed with statements from at least two of the three categories.

Organizational culture is a key indicator of omnichannel transformation success. Organizations with a culture conducive to omnichannel transformation have a healthy approach to problem-solving and encourage and foster relationships between sales and marketing teams. They also have clearly defined sales processes and sales incentives that align with long-term company goals.

Approach to problem-solving: Successful organizations stood out for how they solved problems, as they developed a data-driven culture of experimentation that allowed them to learn and iterate through failure. Organizations that did this were twice as likely to have a successful transformation because their failures weren’t viewed as setbacks but as opportunities to further refine their solution. Management helped develop this culture by setting realistic expectations—also driven by data—and avoiding penalizing teams if transformation efforts weren’t producing immediate results.

Relationship between sales and marketing teams: Organizations were more likely to achieve success if these two teams viewed each other as peers and regularly collaborated. While these teams can develop relationships organically, leaders can help by streamlining systems and processes to regularly bring them together. Leaders can promote collaboration by aligning goals, creating shared reporting lines and adopting a customer-centric model.

Sales process and incentives: While a way of selling differs between industries, products and target customers, we found that having a defined and consistent way of selling within an organization enabled success. Sellers could focus more on their customers’ needs than navigating uncertain processes. Consistency also increased the adoption of new capabilities, as sellers were primed to follow a centrally mandated playbook. A defined way of selling was further enabled by first-line managers who prioritized the big picture and were rewarded for achieving companywide objectives, as opposed to short-term sales goals.

These cultural hallmarks played a role in the successful omnichannel transformations of two large companies we learned about.

Case study 1: A Fortune 500 insurance company wanted to transform to reach younger, digital-first customers. The transformation leader worked in marketing but needed collaboration with sales to make the initiative work. First, he leveraged his strong relationship with the sales leader to establish the partnership needed to drive the initiative. They set shared priorities for the project, which resulted in an investment in data capabilities that could help implement initiatives and measure performance. This collaboration led the team to become more data-driven as they tracked their progress and adapted to solving challenges.

The final piece of the puzzle was encouraging the field to align with their vision, even though the field sales agents were wary of the marketing leader, referring to him as “the enemy.” The marketing leader spent a month in the field listening to their needs and concerns and showcasing how the new process would better serve their customers. This action not only strengthened the link between the sales and marketing teams but also led to a more consistent way of selling that set the foundation for future transformation waves.

Case study 2: A multinational travel company aimed to become more digital after new competitors entered the market. The organization’s structure supported the omnichannel initiative as both the sales and marketing teams had shared reporting lines to the same senior leader, the chief commercial officer (CCO). However, there were still silos in the organization and the teams were not used to working closely, so the CCO scheduled centralized weekly team meetings to align on priorities, proactively identify collaboration opportunities and determine which teams needed to be reorganized to enable the transformation.

The CCO also needed to be able to prove the value of the program to maintain funding. The CCO prioritized developing analytic capabilities so they could track the incremental value their investments added to overall revenue. This decision not only helped the team adopt a data-driven approach to evaluating their initiatives, but it also allowed senior leaders to use the reports generated from the data to set realistic expectations for the transformation initiative and further ensure executive buy-in.

Surprisingly, there wasn’t one right path to build new omnichannel capabilities. There were three we saw most often:

• Centralized capability development: A centralized team that gradually grows over time develops omnichannel capabilities.
• Offshoot opportunity: A new offshoot team is created and walled-off from the rest of the organization to develop the needed capabilities.
• Pilot and expand: Existing teams develop new capabilities through pilots, and if they’re successful, they are scaled to the rest of the organization.

Successful transformations focused less on the specific path used to build new capabilities and more on the intentionality behind how the choice aligned with the organization’s transformation strategy. For example, one Fortune 500 financial services company was able to successfully build new capabilities using the offshoot opportunity structure. As a separate team walled from the larger company and unconstrained by bureaucracy and legacy systems, they developed a culture of experimentation needed to fail fast. However, a lack of front-end planning caused this team to struggle to scale adoption of new capabilities, as they had not considered how they would be integrated into the larger company.

To contrast, a Fortune 100 technology company successfully scaled their new omnichannel capabilities using the pilot and expand method. The company’s existing culture of experimentation empowered teams to develop new capabilities without needing to separate from the larger company. Different from the financial services company mentioned above, this company thought ahead about how the new capabilities would be adopted beyond the originating team. They intentionally brought together a broad stakeholder group throughout the pilot process to serve as change champions to support the broader rollout, which helped lead to success.

As with most elements related to successful transformations, planning for success requires strategizing a layer deeper. It’s vital to consider not only what would work on the surface but to think about long-term sustainability and scale.

While there are many effective ways to manage an organizational transformation, the complexity of omnichannel transformations puts a particular focus on two best practices.

The first is having sustained executive support from senior leaders who are able to articulate a clear vision for omnichannel and continually—and publicly—show their support. Over half of the most successful organizations we interviewed strongly or very strongly agree that there was clear visibility of executive support for omnichannel initiatives, compared to 0% of the most struggling organizations.

Second, organizations need the right leader and steering committee in place. The steering committee helps consolidate and coordinate all of the transformation initiatives to enable clear accountability across multiple stakeholders. It also centralizes communication efforts to sustain enthusiasm for the transformation long after its initial launch. On a seven-point scale, successful organizations rated their responsible-accountable-consulted-informed (RACI) model 2.4 points higher on average than unsuccessful organizations, while their sustained enthusiasm was an average of two points higher.

These two best practices are worth pursuing, as we found that deploying them correctly effectively mitigated many of the omnichannel challenges identified in our previous research.

How should your organization start or revisit an omnichannel transformation? First, view your organizational drivers as separate, equally important factors in shaping program results. We found 10 areas (see Figure 2) leaders should consider to holistically identify strengths and opportunities as they embark on their omnichannel transformation journey. A broad audit of these can serve as the foundation for developing the vision and strategy for the transformation—be that through leadership, role design, incentives or other means—at the same time the technical foundation is being built.

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Senior leaders should focus on conducting this audit objectively and without bias. We often heard stories of executives stating, “But we have a vision—I shared it in an email” or “I shared it at the last all-hands.” However, they couldn’t point to proof points that showed the rest of the organization was invested in the omnichannel vision. We found this kind of engagement approach was often coupled with overconfidence in the company’s existing culture or skills, which can lead to organizational strain and a failed transformation. Bringing in an outside perspective is often helpful, as they can ask the difficult questions to help determine if an organization is ready for transformation. They can also serve as an unbiased party to collect candid feedback from senior leaders all the way down to field sales reps.

As the omnichannel transformation program unfolds, leaders should evaluate progress against organizational drivers on at least a quarterly basis. They should seek qualitative and quantitative feedback on the transformation from other leaders and users, while looking for evidence of organizational priorities, readiness and momentum. It’s important to be realistic about the feedback collected and to share it not just with the program team, but with leaders in marketing, sales and account management, as they can challenge assumptions and cut through overly optimistic ratings.