To enable speed in e-commerce, companies need to get a bewildering number of things right. But we’ve found that three elements are particularly important: a test-and-learn culture, operations to support rapid reaction, and a customer-first commitment.
Testing and learning
Our research shows that more than 50 percent of companies whose revenue growth is in the top 10 percent are more effective than their industry peers at testing ideas, measuring results, and executing changes to products, services, and ways of working. A prerequisite of successful testing and learning is an acceptance of failure as the cost of uncovering new knowledge. Recent McKinsey research shows, in fact, that respondents at successful organizations are more than twice as likely as their peers elsewhere to strongly agree that employees are rewarded for taking an appropriate level of risk.1 Digital natives have this mindset as part of their DNA and support it in three ways.
A culture of learning has to extend to every corner of an organization, but it starts with leadership. At top-performing companies, senior leaders continuously scan for new tools and practices that can accelerate performance, taking the time to learn a new solution at least monthly, compared with quarterly at slower-moving companies. They also take steps to spread knowledge. When Procter & Gamble set about building a digital culture, the consumer-packaged-goods (CPG) giant, founded in the 19th century, started with learning. It created an array of platforms, programs, and training modules to broadcast knowledge and extend training throughout the organization. Its Digital Genius Academy, for example, aimed to upskill everyone in the company in online sales and marketing fundamentals. Another program paired middle and senior managers with digital-subject-matter experts, who were usually junior, to ensure knowledge traveled both up and down the hierarchy.
Reward experimentation, even when it fails
A cornerstone of digital culture is the ability to continuously improve and innovate. Teams are empowered to test, learn, and improve without the need for a cumbersome approval process, allowing them to test new go-to-market approaches, improve the e-commerce platform, or even get new products to market first. Incentives need to be in place to support this approach. At ShopRunner, for example, executives are asked in their reviews to describe recent failures. If the failures hadn’t cost the company money, the executives didn’t get their bonuses.2 Incentives include providing employees with ownership and decision rights. Atlassian, an Australian enterprise-software company, hosts quarterly ShipIt Days, in which employees have 24 hours to work on anything innovative they want, provided it relates to an Atlassian product, and then present the work to the company. The company also allows employees to spend 20 percent of their time developing their own innovative ideas.