A Healthy Sense of Paranoia Can Only Benefit the Digitization Revolution

Why do many companies fail to adapt to this rapidly changing world? Delmulle says he was lucky enough to witness the birth and fast rise of mobile telephony up close. This has turned the world upside down. More traditional companies that want to stay relevant must continue to respond to the ever more rapidly changing customer needs and market changes. PostNL is 225 years old and has continuously adapted and reinvented itself. It continues to do so: we now have more technology and AI and are more data driven than ever before. What are the biggest success factors in this? Based on his experience in his current role as chief digital officer at PostNL, previous roles as partner at Bain & Company and McKinsey & Company, and conversations with peers as a guest interviewer for Management Scope, Delmulle shares some of the key lessons learned.

1. Start from the fundamental, ‘raw’ needs of the customer
   A digital transformation is primarily a customer transformation. The aim is to continuously improve to meet the ever-changing and developing needs of the customer. In doing so, the bar for a good customer experience is higher than ever. In the case of PostNL, this means delivering packages more quickly, more flexible and more efficiently, giving both the sending customer and the receiving consumer as much control over the shipment as possible. We therefore like to research, innovate, test and learn together with customers in the market, to jointly determine where precisely the customer needs lie. A client can, for example, through our mobile app control all matters related to PostNL, such as tracking packages or mail sent or to be received, and setting delivery preferences by, for example, choosing a different delivery time or place.
   The algorithms are designed to calculate the optimal delivery routes so that we drive fewer miles. This saves costs and emissions. At the same time, it makes our delivery process more cost-efficient and simplifies the work for our delivery drivers. A win-win-win situation. So, in a successful digital transformation, you work from outside the organization to its inside and not the other way around. The result is both more growth and lower costs, as well as higher customer and employee satisfaction.
   
   
2. The business sets direction, empowered by technology and IT
   A digital transformation is often driven by technology, but that in itself should not be the objective. The point of departure must be that a transformation is result-oriented and creates value. Therefore, a successful digital transformation is initiated from clear business objectives with a prioritized roadmap that includes only those initiatives that deliver the highest value for customers and the business. Leaders of organizations must understand and embrace new technologies. A logical consequence is that leaders of technology also become leaders of the organization. They must continually ask themselves what they want to achieve (a better customer experience, greater efficiency, tapping into new markets) and how they can use technology, data or AI to make it happen. This digital-first thinking helps determine what the technologies necessary for success are. A digital-first approach is evident at companies where business leaders are in part also the tech leaders and vice versa, and this invariably leads to an acceleration.
   
   
3. Fundamentally change your business model
   Digitization is not only a customer transformation, but it also needs to be a holistic business transformation to be scalable and sustainable. This also affects the operating model. Many traditional companies are used to thinking in terms of departments or functions, whereas digitization, by definition, requires cross-functional and collective thinking as well as strengthening digital skills throughout the company. That requires fundamental changes at the core of the organization and services. At PostNL, as a service provider, we therefore spend much time thinking in terms of customer journeys, as, with our large physical operation and often digital customer interaction, these are inherently cross-functional. We do this with the help of our customer journey factory, where employees are constantly working on developing the most simple and digital customer journey. You cannot digitize without simplifying. It has the added benefit that you quickly start using the same language to discuss the different steps of a customer journey. By digitizing the entire customer journey, we deliver a better experience, from the reception at the door to the check-out.
   
   
4. Strengthen digital DNA by moving from doing digital to being digital
   In companies like ours, with a long history and a large and diverse workforce, digital skills and expertise are often in short supply, especially among employees who are not from the digital native generation. Therefore, you need to search for fresh digital talent, but also ensure a cultural shift to an organization with a digital DNA. That means a digital way of thinking and building digital skills and competencies such as service designers, data scientists, prompt engineers and digital marketing experts. People are often so stuck in their daily work that they do not take enough time to learn new skills or un-learn the old. They do the things they know and are familiar with. If this group does not adjust, it slows down digital transformation. That is why at PostNL we started the Digital Next Academy and Digital Learning Labs, to strengthen digital knowledge throughout the organization. I am a huge believer in ‘You do not know what you do not know.’ People need to learn about the opportunities digitalization offers. They need to go from doing digital to being digital.
   
   
5. Become an open company
   The digital world is an interconnected world. We are part of an ecosystem and I believe in an approach where you develop and innovate together with customers, suppliers and partners in all openness, wherever possible, through experiments and pilots. We do this systematically, for example, with our customers in the checkout of their web shops. Or we work together to improve the customer experience of parcel delivery, sharing more and more data and insights which our customers can use to improve their own performance. We can provide customers with aggregated insights that they can use for their own process improvements. This includes questions such as how the return rate compares to that of the competition, how many packages were not delivered due to an incorrect address, and which packages were easily damaged.
   At PostNL, we also want to be an open platform. That is why we have opened our postal and parcel machines to other shippers and developed a multicarrier platform that allows e-commerce customers to ship through other market players as well - but as a PostNL customer.
   
   
6. Rigorous focus on value creation
   One of the major challenges of a digital transformation continues to be realizing the predetermined results and value creation. It is therefore important to appoint a value creation lead from the very beginning to actively manage the realization of the financial and non-financial results of the transformation. The solutions are still focused on improving the customer experience by, for example, continuously making the timeframe of delivery more precise, automated scheduling, direct communication with a delivery person using a feedback button in the app, and by working towards out-of-home delivery at a postal and parcel machine. This results in increased customer satisfaction for both sender and recipient and reduced costs because our delivery people are less likely to be confronted with a closed door.
   
   
7. Develop a healthy sense of paranoia
   Ultimately, digital transformation in companies starts at the top. The central questions directors must ask themselves are: can we and do we want to? 'Can we’ means: do we understand and fathom what digitization means, do we see opportunities and possibilities? The 'do we want to’ implies that you really embrace the changes brought about by digitization - because this transformation will never be finished. Digitizing as part of business is an ongoing process; not a project that will be completed in three or four years. Since we started our digital acceleration, generative AI has taken off. That now provides opportunities that we did not have on our radar a few years ago. It has huge implications for the business, but it also offers many opportunities. In an ever-changing world with an abundance of available technology, leaders will need to develop a healthy sense of paranoia and keep looking over their shoulder. Those who are not the first to try something new make themselves vulnerable to disruption - because there is always someone out there with just a little more insight or speed. Reinventing yourself is challenging, but it can also be an enjoyable, rewarding journey. We are only at the beginning of a much more digital world. With digitization, we are making more and more direct connections to the physical world we know. ‘Phygital’ is what we call it at PostNL. As a leader, do you want to be part of the future world that is emerging, or not?