Digitalization Is Also About the Technology

Particle Accelerator
Muon Barrel (CC BY-SA 2.0)

The Finnish economy is at a dead end. It not just about the financial crisis and aging population: our engineering driven paper and electronics industries have shrunk to a fraction of what they used to be. With the loss of Nokia’s consumer business, we tend to blame ourselves for our strong engineering roots and lack of sales and marketing skills. We pine for the Swede’s marketing driven success with global consumer brands and we see our industrial success as a thing of past.

Now as we pin our hopes on digitalization, which is seen as paradigm shift comparable to the industrial revolution, we have seen the cautious warnings about not repeating the mistake of the past by approaching digitalization as driven by technology. Important remark; it is not about the technology, but it is certainly also about the technology. It doesn’t matter if you keep beating around the bush by, for example, outsourcing your technology know-how. Digitalization is a renaissance, an all-encompassing change, and technology is definitely part of it.

Look at Uber. Yes, they have a revolutionary business model and excellent marketing. But many say that their greatest asset and most significant innovation is the algorithm they use to balance supply and demand. Look at Amazon, which started as a book store. Many see AWS cloud infrastructure as potentially the most valuable part of Amazon. And look at Netflix and how their development has come up with dozens of revolutionary open source projects.

It is not a question about whether the digitalization is driven by technology, economics or a cultural change: capitalizing it requires a balanced understanding of it all. That’s why it is no coincidence that many digital disruption success stories have been written by start-ups. It is not easy to enable the renaissance in an established, fragmented, organization. Small groups are better at a complex task. Just compare the Apple team responsible for the first iPhone with the size of Nokia’s mobile phone organization.

This does not mean the change can’t be led by an established organization. Look at what Tieto is doing with the IoT startup inside the company. The best practice is to split the organization into two distinct groups: one taking care of the traditional operations — running today’s enterprise — and the other in charge of exploring and developing the next generation. This applies whether you are moving to dev-ops, experimenting with its counterpart growth hacking, looking into internet of things or wondering how to approach digitalization

My suggestion is that we do not forget our strong technical roots, but instead refresh them and use them as a base to build on. The change is all-encompassing. The Swedes have the same struggle with a strong marketing driven culture  and trying to integrate technology into the picture.

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Engineers are taking over marketing

Original: Jean Tinguely, Alles beweegt! (Creative Commons BY-NC-SA 2.0)

I have written about the paradigm shift in sales before. Two-thirds of the sales process happens online now, and customers are already quite knowledgeable when they contact the seller. This provides a great opportunity for subject matter experts, first in supporting online visibility with quality content and, second, in acting as a trusted advisor when the customer engages with the seller. Overall it is a great opportunity for interested engineers to stand out and change the generally reluctant attitude towards sales among subject matter experts.

But if the sales climate is changing, so is marketing. The role of marketing has been pretty stable for a long time; from the engineer’s point of view, it is usually a somewhat disconnected function working with vague, unmeasurable concepts. The disconnectedness can be seen in two organizational areas. First, from the product development perspective, marketing usually takes the product market fit pretty much as given, driving customer focus, but without close collaboration on product requirements. Second, from the sales perspective, marketing usually throws in the towel a bit too early, for example, providing leads but not being accountable for the outcome. As a result of these two factors marketing, as important it is, often ends up in a non-measurable vacuum.

In the digital world, engineering will re-connect marketing with these internal processes. As all products, services, and processes become more and more digital, it is not enough that marketing drives customer focus from the outside: marketing need to get involved in product definition and dimensions like user experience, analytics, and distribution will need to be engineered into the core of the product and the company. Moreover, analytics will penetrate everything, including the measurement of marketing effectiveness. With all the new sensors, tracking, and big data capabilities available, many previously “black box” marketing activities will become predictable, measurable, and consequently accountable for results—a form of engineering science.

The new engineered marketing, also known as growth hacking, already has had plenty of good success stories, including Amazon, Airbnb, and Uber, not to mention Finn’s own Supercell. The challenge is that these success stories always tend to be the same greenfield startups operating in the consumer market. Could Supercell’s success be replicated in B2B market by an established company? I think so. Do you want to discuss?

It happens that the theme of the next Sales Engineering Finland Meetup is Engineers in Marketing. Please join us, grab the opportunity, and lead the way toward changing Finnish engineering culture!