This week on the Friday 15, Andy & Brian provide a template for getting and sustaining buy-in for digital initiatives, including:

1) How you build the business case.
2) How you measure value.
3) How you sustain alignment.

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Brian Beck: Welcome everyone to Friday 15. My name is Brian Beck here with Andy Hoar for our weekly Master B2B session where we talk about all kinds of key issues, fun stuff, commerce, breaking news, all kinds of good stuff. Andy, welcome to our weekly Friday 15. We’ve got a great topic we’re going to talk about today related to one of the hottest issues which our practitioners face, which is gaining and sustaining executive alignment. We’ll get into that in just a moment, but first, we have… Breaking news. Let’s bring up our slides here, Andy. Well, Andy, what the heck is this? NBC convinced Michaels to embrace his AI voice for Olympic coverage. How is this related to B2B? 

Andy Hoar: All right. So we always talk about AI, and I thought this would be kind of fun with the Olympics coming up. So this is what’s going to be known as AI Al. And what he did was he licensed his name, image, likeness, and most importantly, his voice. to NBC, who’s now going to use Al Michaels’ voice to do daily summaries of what happened at the Olympics. Now, what’s fascinating about this is he’s not going to have to do any work. They’re going to have this stuff written by other people or probably software or AI, and he’s just going to voice it sitting in his house doing absolutely nothing. I’m sure he got paid a big check for this. This could be an interesting… harbinger of what’s to come with a lot of famous people where they can license their stuff out for commercials and other things. Anyway, just thought it’d be fun to mention, we could see this come to B2B e-commerce at some point, CEOs, you know, AI, their voices. We know there are many languages that you can speak now. So anyway, this will be front and center, kind of the first experience like it. But yeah, I wanted to introduce a little levity to this, but on a more serious note. 

Brian Beck: Well, it does sound like a bit of a train wreck, but let’s see what happens. Yeah. It’s going to be interesting. Maybe I can replace you with AI at some point. 

Andy: We’ll see. Maybe this is AI. How do you know this is me? 

Brian: Yeah, exactly right. Okay, well, serious note, yes, this was some breaking news this week. Amazon Business introduces new technologies to save time and reduce costs for business customers. You know, Andy, this is my world, right? Amazon. with my Enciba business. And this research Amazon produced recently found that close to 49% of procurement teams felt that business buying is cumbersome, convoluted, and time-consuming instead of convenient and intuitive. So ultimately, they’re looking at one of the key reasons they gave for that was really it was about the tools they were using was causing them a lot of challenges. So Amazon Business is head on after this and what’s fascinating about these tools they’ve introduced it really is about saving the buyer time and there’s three then they they released I want to mention that I think are really interesting. One is they’ve really improved their budget management process, so in other words setting spending thresholds anticipating when a company is going to run out of budget. On Amazon if you’re buying through Amazon Business you can set up spending thresholds that will talk about or predict when the budget’s about to expire. They do pre-purchase approvals. They have options to create pre-purchase orders within this. That’s one big step forward they’ve taken. One of the really interesting things though, Andy, is guided buying. What they’re doing is they’re allowing someone who owns the administrator of a business account, It allows them to actually set the product assortment for their buyers in their organization. So they can say within the Amazon assortment, it’s almost like they’re creating their own mini Amazon experience where they can highlight products that they want their operational people to see, a sort of preferred suppliers. This is within Amazon. This is incredible. And they’ve also integrated quite a bit on the quoting side to allow customers for larger purchases within the portal. So upwards of those above $10,000, they’ve integrated some additional functionality. Anyhow, it’s really interesting to see what Amazon is doing here. They’re all about making the buyer’s job easier in B2B and they’re continuing to raise the bar. 

Andy: Well, the only thing that shocks me about that is only 49% of the people said it was confusing and convoluted. That’s shocking to me. 

Brian: Yeah right, though that 49% still provides a lot about a market opportunity for folks like Amazon. So let’s get to our topic and our topic this week is what is the most difficult part of gaining and sustaining digital buy-in for investments from B2B executives, or for B2B executives leading this effort.  And Andy, this is a topic that came up at our Summit back in early June. This was one that in our pre-conference or pre-summit interviews came right to the surface. And we even did some research around it. But this was a topic we had and we actually had a roundtable specifically about it. You want to tell the audience about that? 

Andy: Here’s some pictures from it, but it was led by Steve Martinez, who was formerly of Univar. He was also at Grainger for many years. And they literally talked for an hour about, hey, what does it take to do this? And Steve was kind enough to memorialize all that they discussed, and he put together a document, which… Very long and very detailed and very impressive. If you want a copy of it, let us know. We can get you a copy of it. But what we thought we’d do today is summarize or highlight some of the more important things that stood out from it. But before we do that, we thought it’d be interesting to tie this into what we’ve seen recently in the research. So what we saw… in our recent research, we did a report… second phase of a maturity model report called Taking Your Strategy to the Next Level earlier this month. And what we found is that it is now the case in B2B e-commerce that leadership is on board. So 94% of respondents said that basically the CEOs get it. They get digital is important. That’s a new thing. It’s very important. It’s also eliminated the need for people to persuade others in the organization about why digital is important. It’s also the case that budget is now finally available. This is maybe the biggest insight that we’ve found, and overwhelmingly so. Companies are now saying, look, our executive team is giving us budget. So they’re on board with it. They’re giving budget. But before we’re all ready to dance in the streets and say, hey, this has finally been solved – budget authority is now bringing pressure on ROI. So companies are saying, yeah, do the digital. Here’s the money, but it better produce a return. Why is this relevant? Because Steve’s conversation was all about how you get people on board with this and how do you sustain it? Yeah. There were really three phases that he talked about. Literally, like I said, building the case, which is identifying approaches to influence key leaders for investment and support. That was perennially the difficult part. Two… Measuring the value. This is a biggie. Defining and measuring success for digital initiatives. Well, you can get everybody on board, but if you can’t measure what’s happening, then you’re inevitably going to get to this ROI discussion where you can’t prove there was an ROI and you’re back to square one. The last one, and not to be diminished here, sustaining the alignment. So let’s say you convinced everybody, you’re able to measure the value, people are on board with that idea, but then the CFO changes. Right. Or… The price of the digital goes up dramatically or the price of hiring people goes up dramatically. Or there’s a new thing like analytics that you need to bring on board or AI. How do you keep people on board? And this is really about ensuring continued support and awareness. So it’s a multi-part effort. These are all the insights they came up with – it was 11 of them under “building the case”.  What we want to do is actually just talk about three that support the same idea.  

Brian: Andy, this came out of Steve’s roundtable… so for those of you listening on the podcast we have a sheet here that shows 11 different things that came out of the roundtable in terms of this particular element.

Andy: But again, there must have been a hell of a lot of things discussed in like 15 minutes because this was just one third of it that had 11 insights. So for those of you watching, you’ll be able to go back and watch this again and kind of digest all 11. But the three that we want to talk about here, all have the word champion in them. Identifying somebody early on who’s a big champion, finding a customer as a champion, and then also identifying internal constituencies or champions. Why is this so important? Well, you and I have been through this a lot. We work with a lot of clients over the years. You have the greatest business case on the planet, but if you don’t have somebody there to make it, it’s not going to happen. So that’s really the takeaway from this is when you’re building the business case, find the people internally and externally who are going to be your champions, who are going to make the case for you. If you don’t have these advocates, you’re not going to get very far. That’s really, I think, the important insight here. 

Brian: If you go back one slide there, Andy, I have this case study in my book, and I remember this vividly because I worked with this company called Illumina, they were a leader in biotechnology, about $3.5 billion manufacturer, one of the things that drove them, the champion argument was really key. They’re getting more than half of their revenue from digital channels this is a genetics equipment manufacturer – this isn’t like a fashion apparel company. It’s not what you would suspect to have the kind of penetration digital they have. But one of the key things in building the case before they got started with all of this back seven or eight years ago was that champion – and that champion in their case was the customers saying we want this capability to order via e-commerce and other digital channels. We need it or we’re going to shift our spending. It was almost existential in some ways.

Andy: Well, I’m glad you mentioned the shift thing because that’s actually a great segue to this slide, which is about the metrics. Now, we all know this is critically important and maybe the first thing you should do is identify exactly and precisely what you’re going to measure and how are you going to justify it. Because there are metrics around revenue and cost reduction, customer satisfaction. That’s the first one around alignment on metrics. And you got to get people on board with it because if they’re not on board with those metrics, you’re going to end up failing.  But the one I want to spend just a second on here is measuring channel shift. You and I have talked about this extensively – you literally just mentioned that Illumina had customers defecting to other channels. If you don’t identify this group and understand in detail – I always joke about the people coming in the front door are incremental and people going to the back door are the channel shift. So it’s a lift and shift thing. You’ve got to be lifting. So you’ve got to have new revenue coming in. But you also can’t allow people to walk out the back door. So put a process in place to make sure you’re measuring channel shift and that you don’t just ignore the fact that while you’re bringing people in the front door, a bunch of people are going out the back door. 

Brian: Yeah, I remember talking to Steve Baruch, who we’ve had on some of our podcasts, webcasts, et cetera. Andy, he’s the former CMO at MSC Industrial. He talked, I remember in our conversations, part of it was about this shift piece, and it was really existential, right? I mean, think about it. The business case is always about, hey, what’s the growth opportunity? That’s where the CEO goes, the board goes, things like that. But a lot of this is, and I don’t want to call it defensive, but it’s mandatory. I mean, it’s sort of like this existential thing where if you’re not thinking about it, your customer base is going to move to other suppliers, other channels, et cetera, because the buyer has changed, right? And so you’ve got a different buyer now in the role. They have different behaviors. So it’s an existential thing. And sometimes that can be a little tricky to measure. The way MSC would do it they would look at their customer and understanding what they’re buying from them. Whether they are expanding their wallet share (which is my favorite metric) share of wallet overall in the business not just e-commerce – this is overall share. So when you think about it that way even if they’re shifting channel behavior within your business, you’re still seeing the the overall impact that digital is having because it might lift your sales through your EDI or through your sales force or through your call center through some other channel but it’s an important consideration absolutely.

Andy: Most of the research I’ve seen on this is when people shift to an online channel it becomes a hybrid channel. It’s not going from offline to online, it’s really online influenced offline and online only and they end up spending a lot more. So you shouldn’t be afraid of it, but you sure as hell should measure it. The last part here is how do you sustain all this. So let’s say you got this going but you know people change like I said earlier – customer expectations rise and you’re coming back to the well asking for more money. And they’re like wait a minute – I haven’t really seen this thing succeed. I know we have it but where are we relative to others? Where are we relative to our own KPIs, etc? Here, I think the important point is really around communicating success and failure and not just one or the other, but both. And being honest about it and saying, look, this is where we’re doing well and this is where we’re not doing well. The beautiful part about digital is you can iterate. And so really sophisticated, smart, digital people recognize that this is an opportunity not just to be honest, but also to show people that, hey, if there’s something that’s wrong, this is not decisive. We can fix it. And so the last thing is really about motivating your team internally. and recognizing people who are doing a bang-up job. In digital, a lot of times that’s not well-known. There are people who are writing code. There are people who are producing content who don’t get recognized. But in digital, that stuff is absolutely critical. 

Brian: On the successes and failures piece, do you think, I’m curious, Andy, your opinion: Do you need to have a C-suite, a CEO in particular, that understands that this is an iterative process? Do you have to have some digital native thinking in the C-suite, in order to understand that? Because as you were talking, I’m thinking about the Amazon approach, test and fail and learn, right? And you know, that’s a whole culture that’s grown up with that company for the last 30 years. That’s not typical of a B2B company where it’s business case everything to death. Make sure you get guaranteed you’re going to get the return and all that stuff. Anyway, do you need that digital thinking at the top, do you think, to be successful with that? 

Andy: Ideally, yes, but work with what you’ve got. I think it’ll speak for itself. The beauty about digital is if you’re showing that you’re able to iterate and succeed, even people who don’t have experience with that will generally appreciate it. So I know we’re running short on time here, but final slide. Well, we pulled this as we always do. And we asked the question, which of these phases do you think is most important? And decisively here was measuring the value. 

Brian: Well, the question is, what is the most difficult thing in getting and sustaining executive buy-in for these investments? And it’s measuring the value.  That’s what came out. And fascinating to me, building the case was only 13%, whereas measuring the value, 48% said that was the most difficult thing. And I think that’s true and reflects the complexity of B2B, Andy. Think about it -You’ve got folks that maybe people are researching online, but they’re buying through the EDI platform. How do you draw the attribution? How do you close the loop? These are things that companies are out there looking to solve. So to me, this is a move along the curve. It’s exciting. 

Andy: You want to send somebody into convulsions in digital? Try this phrase: cross channel attribution. This is the stuff that’s hard to do. Five years ago, I think building the case would have been the majority or plurality answer. Today, it’s measuring value. Maybe in five years, it’ll be sustaining alignment. And that’ll show that we’ve made some progress here.