The past 18 months have taught us all to be more resilient in the face of unexpected challenges. In my firm West Monroe’s most recent quarterly pulse of 150 C-level executives, respondents cited the Delta variant, the Great Resignation and material delays and shortages as the issues that have affected them the most.
But our survey projects positivity overall: 75% said they were bullish about the U.S. economic recovery and have aggressive plans to capitalize on it. That said, we’ve also seen that things can turn on a dime. As I write this, the emergence of the Omicron variant has casted new uncertainty over the beginning of 2022.
While managing through the unexpected is important, it’s prudent to stay focused on the future and what we know is coming. Following are the five trends we believe are especially relevant in the CX and Digital worlds and about which we are talking most with our clients. Each of these has implications for engaging and interacting with your customers. Think of them as building waves that can propel your organization forward — if you’re ready to catch them.
1. The War for Talent
A great customer experience starts inside with your own people. The trouble? Many companies have their hands full simply maintaining enough workers for full operations — let alone focusing on employee experience. With a smaller labor pool and notable skill shortages, everyone is working extra hard to find and keep talent. This is magnified in the digital space.
With venture capital on pace to hit a record level of liquidity, startups are raising twice as much capital as in the past. They are deploying these funds to aggressively recruit designers, engineers and product managers. The startup path can be quite lucrative for top tech talent — for example, a senior-level designer can command a significant premium contracting with high-growth startups. On the other hand, some people are leaving the traditional labor pool to join the gold rush in cryptocurrency. When you could make $1 million in a month with little to lose, why not?
These developments have cascading effects. Enterprises that want to hire — and according to our poll, 71% of companies intend to hire more people this quarter than last — must find new strategies. Among those polled, 51% are approving higher contingent labor levels, 68% are increasing wages, 46% are investing in retention and 57% are granting more “work from anywhere” policies to broaden the talent pool.
Where to focus now: Certainly, understanding what you are competing with is important. But few companies can keep pace with startup compensation. To counter this pressure, make sure you have a clear and compelling employee value proposition that articulates what’s in it for your people.
Second, make sure you are delivering an amazing employee experience — and continue to invest in it. Finally, accept that people don’t want to be in the office full-time and build a hybrid strategy that reflects new expectations. Otherwise, you risk losing out to those that do.
Related Article: Align Your Customer Experience With a Higher Purpose
2. Gig Economy Goes Mainstream With 'Liquid' Teams
Thought leader Packy McCormick writes about the concept of the cooperation economy and “liquid super teams.” These teams are purpose-built for a specific task and for a finite period — a very different mindset than being part of a permanent functional team. People can define the work they do and the companies with which they do it more fluidly: “I will spend two months with ABC doing XYZ, take a month off, and then go somewhere else.”
The gig economy, which made it easy to drive for Uber and Lyft or shop for Instacart, is now becoming mainstream, and the possibilities are endless. Agile businesses see this as an opportunity and build it into their workforce and talent model. Think fractional chief marketing or product officers with a freelance mentality, coming in to tackle a specific business phase or need rather than running a function long term.
For digital natives with the right skills, this may feel like a more “normal” and attractive path. They can build the business of me: one part engineer, one part designer, and one part content producer who can find cool people to work with for a period of time. Many have seen it work — with friends who have great lifestyles and incomes. And the pandemic has only advanced the possibilities.
This year, we could see the first $1 billion company with one employee. That’s because MrBeast has used liquid teams to expand his empire beyond YouTube to philanthropic and other ventures such as MrBeast Burger.
Where to focus now: The concept of liquid teams makes it easier to bring on great talent for immediate needs but harder to recruit full-time talent. If you haven’t looked at building freelancing/contract labor into your talent model and staffing plan, it’s time to do so. Respondents to our poll said they are considering increasing contingent labor levels: for 86%, up to 20% of their workforce; and for another 13%, to between 21% and 35% of the workforce.
Related Article: What Gig Workers Bring to Forward-Looking Companies
3. Web3 and the Decentralization of the Internet
A lot of hype surrounds Web3, short for Web 3.0, a future internet with a different and more decentralized governance model. While we don’t know exactly what a Web3 future looks like, we do know decentralization is coming and driving change. For those looking for “fairer” ways to control and consume content, decentralized ownership enables that. In fact, this has been building for some time. Blockchain was the first wave. The second wave is now here, bringing new products with memberships via non-fungible tokens (NFTs).
Where to focus now: This wave hasn’t hit the enterprise space or big tech yet, but tectonic change is occurring at levels below them. Even if you believe NFTs are untenable or bitcoin and DAOs (decentralized autonomous organizations) are a hoax, it’s important to educate yourself and your organization, understand what a growing number of people care about, and keep an open mind. With every movement — and this is no exception — there will be some elements that stick and drive change.
Related Article: Blockchain Will Stall Until it Finds Its Killer App
4. Creativity as a Differentiator
Forrester has written about the role of creativity in fostering differentiation and a growth mindset — for example, here. We wholeheartedly agree.
But creativity has always been important, so why the focus now? We see it as this: With technology becoming increasingly plug-and-play, it has never been easier to build on top of existing technologies and platforms. Those that can do so rapidly will win in the market. For example, four of this year’s notable IPOs — including Allbirds — grew up in a relatively short timeframe by building their ideas on top of Shopify. Increasingly, the ability to foster creativity and then use existing platforms to deliver ideas rapidly will be crucial to future survival.
Even big, established companies have shown they can propel new growth through creative thinking. Starbucks could have said, “We’re a place to connect the community through coffee” forever. But someone challenged that, and now it derives a significant amount of business from locations devoted just to picking up coffee. Volvo explored the question, "what if someone doesn’t want the long-term commitment that comes with car ownership?" That led to a subscription service with everything, even the insurance, in one monthly payment.
Where to focus now: It’s not so easy to flip a switch and make an organization creative. You’ll need to make the time and space to embracing creativity — not just in visual design, but in the intersections. Consider bringing someone in from the outside to help explore questions around your core business. The answers could unlock change.
Related Article: Why Curiosity Is the Key to Business Transformation
5. The Intersection of Physical and Digital
Even before COVID-19, Target was well known for its ability to connect the physical and digital. The pandemic accelerated this trend — although the driver was more about need than vision. As we move forward, companies need a clear and compelling vision for building this intersection. No one will survive on the extremes in the long term. Even digital-first organizations need a place to play in the physical world. So, just as we’ve seen local restaurants establish online reservation and ordering capabilities and a national presence on Goldbelly to support its physical locations, we now hear talk of Amazon moving into department stores.
Where to focus now: Regardless of where you are on the analog/digital spectrum today, the right answer for the future is somewhere in the middle. Think of it as a pendulum swinging from one side to the other and then coming to rest somewhere in the middle. In addition to establishing a vision for unifying experiences, you should also move rapidly to establish a digital operating model — grounded in multidisciplinary teams with a clear vision and unfettered access to the right data — that allows you to execute on that vision.
Related Article: Forget Digital Transformation – Just Become Digital
Are You Ready to Ride the Waves?
Regardless of what this next stage of the pandemic may bring, these five trends will continue to build momentum throughout 2022 (and beyond) and shape the future. And as fast as things are moving, the companies that are prepared to act swiftly, with confidence, will be best positioned to catch the waves.