Nancy Rademaker

Keynote: Survival in the New Normal: the Impact of Digitisation on Customer Behaviour

Keynote speaker Nancy Rademaker, a partner in nexxworks, a digital consultancy, began her address with a question: “Do you know this object?” she asked the audience, showing them a picture of an old-fashioned rotary dial telephone. Every member of the audience agreed that, yes, they did know what the object was. She then asked: “Do you know how to operate this object?” When every member of the audience agreed that they knew how to operate the telephone, she said: “So all of us are ‘old normal’.”

“Whenever you come across a ‘new normal’ person and you present them with an ‘old normal’ object like this, you get a clash.”

The purpose of her questioning then became clear, as she showed a short film of two teenagers trying to work out how to use a rotary dial telephone within four minutes. After struggling for some time, they worked out how to dial a number, but could not work out how to use the receiver.

“We live in this new normal, and that basically means that we have gone from digital being a novelty to digital becoming the new norm,” she said.

Technology, whether that be computing power, networks, data, or the internet of things, has grown in an exponential manner in recent years. In animals, the market for wearable technology (“wearables”) is expected to be worth US $8 billion in five years’ time. “That’s huge,” she commented.

Looking at the extent of digitisation within different sectors, healthcare was close to the bottom; from a positive perspective this meant that there was ample opportunity for improvement.

Ms Rademaker outlined the different eras of digitisation, beginning with the personal computer in the 1980s, moving on to the internet in the 1990s, and to the cloud-based and mobile digital eras of the present. With each era, “we, as normal people, had to get used to it, we had to get used to a PC, or the internet…and we had to get used to smartphones as well.”

However, while technology and innovation developed in an exponential manner, leaders were used to more linear evolution. “If you have an exponential innovation, it starts a bit negatively at first. That’s why leaders fail to see it coming – I would call it ‘corporate myopia’. It starts a bit negative and then it goes ‘boom’.”

This led to disruption within an industry. Ms Rademaker predicted that there would be massive disruption in any sector of any industry in coming years, with new technologies leading to new competition within an industry, and higher expectations.

“The fact that we are so informed has led to the fact that our minds, our heads, are becoming too full with all of the options that we have. We have so many options that it is becoming increasingly difficult to choose. We have this tremendous stress of choice all the time.”

Nancy Rademaker

Leaders are faced with a dilemma: they know that they needed to innovate, but at the same time, they cannot let go of what they had done so far.

“You can’t just let go of the old normal and step full into the new normal,” she said.

Innovation has to take place on three levels – the now, the next, and the beyond. But what does this mean? “You have to improve the now – improve your current business models, your current practice. You have to create the next – think about new business models, new markets…and you have to imagine the beyond – basically daring to look ahead some 30 years, trying imagine what it would be like and work your way back from there to here,” she explained. “It’s not about extrapolating from the past anymore, it’s looking into the future and working your way back to now.”

Technology has changed businesses but, above all, it has changed human beings. She described what she called a “5i” model of human characteristics that were either new characteristics or ones that had become more dominant because of technology.

The first “I” characteristic was “informed” – people are more informed than ever before. Globally, more than four billion people have access to the internet, and this will only increase as projects to improve access came to fruition. Connectivity, and being informed, starts at a very young age, she said, showing a photograph of a five-year-old child’s letter to Father Christmas, in which the child had written out the internet link to the particular toy they had wanted.

People have also become much more mobile, with five billion people owning mobile phones – and a low battery level is now one of the current generation’s biggest fears.

This increased access to information is having an impact on people, she said. “The fact that we are so informed has led to the fact that our minds, our heads, are becoming too full with all of the options that we have. We have so many options that it is becoming increasingly difficult to choose. We have this tremendous stress of choice all the time.”

The second “I” characteristic discussed by Ms Rademaker was “individualistic”. People have put themselves at the centre of their own universes, she explained, and it is crucial that businesses are able to deal with this. In healthcare, people want to check and monitor themselves using technology, and they want to do the same for their pets.

The third characteristic was “impatient” – “We want everything, and we want it now,” she said. The average person’s attention span has decreased from 15 seconds in the 1970s to eight seconds now – and today’s younger generation has an attention span of five seconds. As people have become more impatient, new ways of delivering services have to be developed. In healthcare, this included systems for remote consultation and sending data to healthcare professionals. The same thing was being seen in animal care.

She said that one thing a business should never do was steal time from its customers by having too lengthy procedures or processes.

The next “I” was ‘influenced’ and this was associated with the rise of social media. Research had shown that 75 percent of customers did not believe companies any more, but they trusted their peers much more. “Communities of trust” are being created between people who shared something in common. “We have this urge to let ourselves be influenced by others, by our peers,” Ms Rademaker said.

The final “I” characteristic was “intuitive”. She explained that the brain is divided into rational and emotional/intuitive elements. As the rational brain is now being overloaded with information, people tend to revert to their intuitive brains much more quickly than in the past. Most decisions were made using the emotional brain – people used their rational brain to justify the decisions that they had made – and companies need to be aware that people are now using their intuitive brains much more.

“The next gen is the pet gen. Anyone who is working in this space needs to take this into account – that this next gen is typically a changed generation compared to the previous one.”

Nancy Rademaker

These five characteristics meant that customers have changed dramatically; they are now moving in unpredictable ways. The next generation is typical of this unpredictable behaviour and, she said, “The next gen is the pet gen. Anyone who is working in this space needs to take this into account – that this next gen is typically a changed generation compared to the previous one.”

Any sector that has to deal with this uncertain, complex, volatile combination needs to move fast and be agile to survive. The rate of change is accelerating and businesses need to ask themselves whether they are changing at the same pace as the world around them. Startup companies tend to be both fast and agile, but the thing that they really get right compared to other businesses is that they do not start from the product or service they are offering, they start with the customer that they were serving.

This also holds true for the veterinary industry, but the relationship with the customer is atypical in that the patient is not the one paying for the treatment. “You have to carefully align with the owner or keeper of the animal to decide together what’s best for the animal. That makes your profession a bit different from any other customer relationship that we have out there,” Ms Rademaker said.

By starting with the customer, disruptive companies put customer experience first. But what is customer experience? It is, she explained, the customer’s perception of an interaction with any part of an organisation. In human healthcare, for example, this means that there needs to be a shift from “just products and pills”, she said, to complete patient solutions.

The other thing that disruptive companies do well was making optimal use of all the emerging technologies, such as artificial intelligence (AI) and big data, to optimise the customer experience. In healthcare, such technology offers the opportunity to move from reactive to proactive healthcare, from treatment to prevention. Every possible health parameter that could be measured would now be measured by new technology, and there will be a move from episodic measurement to continuous measurement, not only through wearable technology such as wristbands or belts, but also by technologies such as ingestible capsules that could send data wirelessly from inside the body to be displayed on an app.

There is also a lot of research going on into wearable technology in animals and how it could be used to monitor and improve wellbeing. The limiting factor currently is the cost of the technology, which exceeds the value of the animals it was being used on.

However, in human healthcare, the dramatic decrease in the cost of sequencing a human genome has opened up an opportunity for companies to offer a genome sequencing and disease diagnosis service. Genome sequencing could also be used for precision medicine, helping to determine appropriate treatments or optimum doses.

Vast amounts of data were being collected, Ms Rademaker said, but it was how data were used and how algorithms were created that would impact a profession and its clients.

“In the medical profession, this has become the doctors’ data dilemma,” she said, adding that by 2020, the volume of medical data facing doctors will be 200 times greater than the volume the human mind could process. Doctors would therefore have to apply algorithms/machine learning to make sense of all the data that they had.

“You can fight diseases with machine learning,” she said. “You can use machine learning to find them, to medicate, and to continuously monitor them as well.”

Google has developed an algorithm that could diagnose eye disease with the same accuracy as a human being. An app has been developed for the Apple watch that could collect data on heart rate. Ms Rademaker explained that variation in heart rate may be a good predictor of diabetes, and that an algorithm could predict this with 85 percent accuracy.

It is time for every profession to embrace algorithms and AI, she said. AI will not replace doctors, but it will revolutionise healthcare once it was widely accepted, particularly in the area of preventative healthcare. Ultimately, AI will allow healthcare professionals more time to deal with their patients with real empathy and care.

Optimising the use of available data would be key – at present very little available data is being used and she suggested that healthcare would benefit from ‘co-petitive learning’. This means collaborating with competitors and sharing data to feed in to a model to improve its performance. An alternative form of learning is ‘federated learning’, in which it is not the data that are shared, but the models that have been derived from the data.

Ms Rademaker then turned to new horizons – developments in healthcare that would arise as a result of the new technology. In-home digital devices such as Alexa are being used in healthcare, for instance with patients who need to log their health status on a daily basis. They are also being used by pet owners to discuss concerns about the health of their pet.

“Convenience is the new loyalty… you need to make it simpler on your customer.”

Nancy Rademaker

She discussed virtual and augmented reality, and 3D printing, and how all three had applications in the healthcare space. 3D bio-printing was in the “beyond” space in some instances but corneas had already been bio-printed and used in people with sight problems.

Embracing such technology would offer huge opportunities, she said, and AI would change jobs massively.

Businesses have to be prepared to deal with the new consumer, who expect extreme transparency in areas such as data security, privacy and pricing. They expect personalisation, too, whether that was in fashion, food or precision medicine. Consumers also expect convenience: “Convenience is the new loyalty,” she said, “you need to make it simpler on your customer.” She discussed a number of examples of new technology that offer greater convenience to its users.

While most things are going to digitise, not everything will, and there will always be a need for a human being. AI will help people augment their own intelligence: “It’s not man versus machine, it’s man with machine,” she said. “We have to embrace this technology and it will eventually get us to a higher level.”

Traditional hierarchies within companies could prevent change happening, or could lead to change happening only slowly. Companies have to move to a structure that encourages collaboration between all levels, and this is something that will take time to achieve.

She saw five major barriers to innovation – too many processes and procedures, too many policies and regulations, too many unnecessary gatekeepers, a culture that did not support innovation, and a lack of tolerance of failure.

“You need to dare to make a big leap every now and then. After all, the electric light did not come from the continuous improvement of candles.”

Concluding, Ms Rademaker encouraged her audience to “think in opportunities, instead of boundaries or limits”.