By James Allen and Andrew Noble

All micro-battles lead to technology. But micro-battles journeys don’t start with technology. Let’s discuss.

As we work with companies on micro-battles, we’re learning that taxonomy matters. Derived from the Greek words taxis (arrangement) and nomia (method), the term taxonomy was originally used in biology to classify organisms. But taxonomy is now applied widely. We’ve found huge value in identifying and naming patterns of behaviors, routines and lessons as companies work on micro-battles.

Working closely with Bain’s Innovation practice, we’ve been identifying the common patterns that Agile teams and micro-battle teams encounter as they prototype and scale winning solutions. And we’re seeing common patterns in the most successful innovations and micro-battles themselves. Inevitably, the teams work on three levels: customer experience, business processes and technology. That order matters.

The best teams start with the customer. They ask, “What parts of the customer experience are we actually trying to improve?” This demands developing a clear taxonomy of the customer experience and the episodes—such as “purchase and pay”—that it comprises. For an online retailer, the customer experience might move from “browsing and selection,” to “purchase and pay,” to “shipping and receiving,” and finally to “after-sales service.” For a mobile phone company, the experience might encompass multiple players. It could move from “selecting a phone” (which might involve an online comparison of brands), to “choosing a plan” (which might involve a network-branded store or third party), to “purchase and pay” for initial service. The customer experience could continue with “ongoing billing” and “ongoing services” (dealing with phone or network issues) to “extension/upgrade.” Micro-battle teams need a clear, shared understanding of the full customer experience and more specifically, what they’re trying to improve. By mapping the taxonomy and honing in on a specific episode of the customer experience within that map, the micro-battle team can innovate in a way that mirrors the customer’s experience, and the innovation can serve the customer that much more effectively. This is level one.

The team works on level one until it has a winning prototype. But, as we’ve discussed elsewhere, teams are also focused on prototypes that scale. They’ll be testing to ensure that these prototypes can transfer across other customers and markets. They’ll be testing that the prototype translates into the routines and behaviors of the people who deliver the customer experience. As teams execute changes to the customer experience, they move to level two. They ask themselves, “To fully implement the improvement of customer experience X, what business processes do we need to improve?”

Again, taxonomy matters. The team must outline the full range of business processes—the procedures, activities and tasks that the company executes to deliver the customer experience. Then it must be specific about what processes need to change. Our online retailer should think through business processes required for planning, buying, distributing and selling. It also wants to think through “management and control” processes to support the teams, such as financial controls, legal, human resource systems, and so on. For example, if you’re trying to improve how your customers can purchase and pay for products online, you might conclude that you’ll need to change your store inventory-management processes immediately.

As the team starts to work on level two, or business process improvements, another pattern emerges—all work to improve business processes leads to technology solutions. This is level three. Again, we need a taxonomy for discussing technology improvements across infrastructure, applications, data and services. The team needs to work through the technology requirements to change the business process that will improve the customer experience.

The “three levels” idea is occurring everywhere. Here are a few examples.

  • A logistics company wants to speed up delivery times for its customers. Initially, the team will focus on one aspect of the customer experience—the speed at which it brings a truck to a customer site, offloads deliveries and picks up returns. As team members develop their prototype, they realize that they need to change a core business process—the way that customer requests for returns are communicated to the drivers delivering products daily. As they work on a solution, they identify the technology change. They need to design an application that identifies drivers on their routes for daily deliveries and communicates return requests from the customer call center.
  • A consumer products company in Asia wants to help mom-and-pop general traders introduce a concentrated dishwashing powder for consumers. On a per wash basis, the concentrate is a much better value for consumers. But the retailers need to explain the benefits of concentrated powder, which has a higher price tag than traditional liquid detergents. During the prototyping phase, the team designs a set of promotional materials to help roll out the new product range. As it thinks through the rollout, the team identifies wholesaler communication training as a key business process to improve. Wholesalers communicate with the mom-and-pop retailers most often, so they need to be trained how to introduce the new products and promotional materials. As the team works on this solution, it realizes that the most cost-effective way for wholesalers to communicate with retailers is a set of videos that introduce the product. These can be rolled out on the same tablet platform that the company has given to wholesalers to track inventories.
  • A retailer wants to leverage the convenience of multiple channels—physical stores and digital—to increase sales. It wants to develop the ability for customers to select and purchase products online, then pick them up in store. From the customer’s viewpoint, this should be a pretty simple process. But many business processes have to be updated for this to happen. Inventory must be checked in real time, store associates must be available to prepare the order for the customer, and customers must be able to find and pick up their product easily upon arrival. These capabilities clearly require technology updates—the website or mobile app must check store inventory levels, and in-store technology must help associates prepare the order.
  • A financial services provider wants to sell more of its auto services, such as car loans and insurance, to its members. But as it examines the customer experience, it finds that “buying a car” is the first thing the customer cares about. The customer’s biggest hassle is finding information on a fair price for the car he or she wants. Realizing it needs to help members solve this problem, the company develops a process for “advising on pricing.” It builds partnerships with external pricing technologies to create more engagement during the car-buying process, increasing sales of its car loan and insurance products.

Understanding the natural pattern of customer experience, to business process, to technology has significant benefits. Teams familiar with the three levels often take five critical actions.

  1. Consider technology changes from Day 1. The teams realize from the outset that all roads will lead to a technology change, so they begin to understand the required changes from the outset.
  2. Focus on “surgical strikes” for technology change. While they consider technology change from the outset, they make the request for change as narrow as possible. Remember, you’re not seeking sweeping technology change. You’re working to improve a specific aspect of technology, to improve a narrow set of business processes designed to support a specific customer experience improvement.
  3. Plan for new team resources from Day 1. The team that designs a new customer experience will need additional resources. It needs to work with new teams or new resources to improve a business process. It needs to work with new teams or new resources to make the right technology changes. Acknowledging these needs from Day 1 helps the teams plan and allocate resources.
  4. Enable faster pattern recognition. For leaders reviewing the progress of individual micro-battle teams, the common taxonomy of the three levels helps identify patterns and make connections between teams. All teams will be mapping out the customer experience, so you can share lessons across all teams. Perhaps the first team can map the full customer experience, then share with other teams so you’re not starting from scratch each time. In addition, all teams will be mapping out the core business processes, so you can share these maps across teams. All teams also will be mapping out technology solutions, and you can share these too.
  5. Address common scaling issues. Senior managers will know from Day 1 that there will be demands to change business processes and support new technology solutions. This will help them track resource bottlenecks earlier. They can anticipate whether multiple teams plan to draw on the same areas of business process change, or similar areas of technology change. Having a common taxonomy to define the three levels and break them down ensures that all teams use the same language to make requests and define the resources that will fulfill these requests.

All roads lead to technology. In fact, when you move to a full portfolio of micro-battles, you’ll find that you’re well on the road to “transformation through technology” or T3. But the journey doesn’t start with technology—it starts with the customer.

Discussed.

Andrew Noble is a partner with the Retail practice and leads our work on Agile Innovation with Americas-based clients. He is based in the Boston office.

Founder’s Mentality® is a registered trademark of Bain & Company, Inc.