Precision and Diversity—Hallmarks of the Digital Future

26 May Precision and Diversity—Hallmarks of the Digital Future

A special insert in the April 27th Wall Street Journal Report features articles about the future of the Internet contributed by a number of noted thought leaders such as Jane McGonigal, Walter Mosely, Tony Fadell and Brian Wong among others. It is recommended reading for people who want to get closer to the mainstream view of the digital future.

In reading these articles, I saw two important themes emerging: “precision” and “diversity.” Both are critical for our digital future and each presents executives with unique future challenges.

Why are precision and diversity important concepts in the digital era? They describe dueling desires all human beings have to be both individually unique and culturally inclusive. It’s a natural reaction to the heightened information intensity and connectedness created by digital technology.

Two sentiments describe these views: (1) If you know more about me, then use that to bring me better solutions, and (2) If everything is connected, then everything should be made available.

In traditional business strategy and investment, however, precision and diversity were opposing forces, which usually resulted in a tradeoff—doing one but not the other. Organizations required focus and targeting to deliver their value propositions and create competitive differentiation. Being diverse – many things to many people – only diluted the brand, drove up costs and diminished expertise. So organizations opted for precision – narrowing the use cases to deliver superior performance.

However, that tradeoff is increasingly unnecessary, something that is creating new opportunities and challenges.

Beyond industrial mass customization or personalization

Expanding a company’s product and service options is an industrial response to these forces. Such mass customization strategies are fundamentally self defeating, stranding accessory inventories and complicating supply chains while not meeting customer’s needs. Personalization of mobile phones provides an example of the limitation of industrial-based mass customization.

Mass personalization is the human side of mass customization and the dominant theory of digital marketing. The idea of being able to make individual offers based on analytics, big data and mobility is appealing. Individually we receive the offers that matter to us—precision—while the marketer is able to handle a broad range of potential customers—diversity. Problem solved? Or problem created as superficial offerings easily lead to marketing overload, privacy concerns and general creepiness. Accenture recently focused on this aspect in a survey entitled “Creepy Versus Cool” The survey found that Millennials want more personalization than other segments. They want to be reminded while shopping for needed items, advised on avoiding certain foods, and support to not buy large ticket items that are outside of their budget. Those findings describe requirements for individual precision while supporting a diverse set of individuals.

Three new P’s for the digital future

The capabilities and capacities of digital technologies transform social, business, and strategic choices. Resolving the apparent conflict between precision and diversity depends on what we’ll call the three “P’s” of the digital era: platforms, postponement and people.

• Platforms will replace infrastructures. Think of a platform as the ability to generate multiple revenue streams over the same set of assets and operations. Currently firms invest in dedicated infrastructures supporting a revenue stream with a dedicated set of assets. A lack of agility, increasing expense and complexity describe the difference between infrastructures and platforms. The tension between the two is evident in sectors such as financial services.
• Postponement is an idea from supply chain and lean manufacturing. In general, it means waiting until the last possible moment to fix a product or service. Delaying final configuration increases flexibility to handle a broader set of needs than holding inventories of finished goods. Attempts to use big data and analytics to better predict demand, to be omniscient in product planning and position finished goods represent incremental improvements.
• People are the often overlooked but always fundamental element of the digital future. Masked by mantras to be more customer focused or human centered, too often digital solutions basically move internal solutions onto external sheets of glass. Centering the future on digital enhancement of human ability combines the maker movement with digital’s ability to tailor solutions. It is the place where diversity meets precision.

Predicting the future is always precarious
The Wall Street Journal’s special section on the future provides an interesting and engaging view of a range of social, economic and political topics. It is recommended reading to understand where the mainstream of future thought currently flows. While many of the ideas center around themes of bigger, faster, cheaper and more connected, each carries an undercurrent of the tension between precision and diversity. How we handle that tension as an individual, executive or organization will determine the difference between prediction and performance.

Recent articles by Mark McDonald

• A house divided against itself cannot stand
• The digital worker redefined
• What is a digital strategy?
• Do you dance with customers or just step on their toes?