According to Scott Klososky, business leaders need to understand the critical philosophies behind technology and better use their data. // © 2014 Scott Klososky
Technology is becoming the critical “X factor” for business success.
“It doesn’t matter if we’re looking at the travel industry or banking or insurance,” said Scott Klososky, an international consultant known for his innovative take on the transformative application of new technologies. “What’s common is that technology is having a growing impact on two things: how organizations drive revenue and how they lower costs by improving their back office processes — what we call digital marketing on one side and digital plumbing on the other.”
Technology is simultaneously becoming more complicated and difficult to master in practice, according to Klososky, who had helped myriad businesses across a wide swath of industries implement technology makeovers.
“Technology has a huge impact on our businesses now, and it’s not going to stop,” he said. “When we look at all the new things out in the world — including Google Glass, pervasive computing and machine-to-machine connections — it’s clear that technology is going to change companies more and more and more. There will be winners and losers, it doesn’t matter what industry you’re in.”
Klososky outlined several guiding principles for travel industry business leaders who want to be in the winner’s circle in 2014 and beyond.
What’s the most common mistake most businesses make with technology?
A lot of business leaders think that if they just buy better software or better hardware they’re going to be good with technology and that just isn’t true. They think that will fix everything and they ignore the philosophies or the concepts they need to learn and apply.
What do you mean by the philosophies of technology?
Business intelligence is the philosophy of using data as a powerful asset or as a weapon in the market. That’s all business intelligence is.
Big data is another example. We have the ability today to gather and harvest huge amounts of data. Big data is the philosophy that more data is better, and that by gathering those huge amounts of data we can see things we’ve never been able to see before. That’s a philosophy. You don’t go out and buy a big data software app; it’s a philosophy.
How would that approach to technology look in practice?
To use an analogy, if you came to me and said you wanted to be a better golfer, what if I told you all you had to do was go out and spend $1,000 on clubs and you’d be a fantastic golfer? Would that be true? No. You might have the best clubs, but if you don’t understand the philosophy of how to swing a club, if you haven’t gotten some really good education and advice, and if you haven’t practiced a lot, you’re not going to be a good golfer.
It’s exactly the same with technology. Way too many people think that they’re going to be great at digital marketing or great at the digital plumbing side of technology just because they write checks for new software or hardware, or hire an agency or an outside firm to help them out. I see a lot of companies saying, “We need to catch up with digital marketing so let’s go hire an outside firm to do it for us.” I suppose the analogy there would be hiring someone to go play golf for you. You haven’t really solved the problem of how you can become a better golfer.
What’s the bottom-line takeaway here?
Until business leaders understand the critical philosophies behind technology, they’re never going to have technology mastery. It doesn’t matter if you are talking about a huge multibillion-dollar international firm or a smaller firm like a travel agency. It’s the same thing. You can’t just write checks or bring some vendor in and think you’re going to be good at technology. You have to learn what’s behind it as well as understand the philosophy of digital marketing and the philosophy of business intelligence.
How about customer service? How can businesses use technology to improve in that area?
Whoever your constituent is, whether that’s a customer or a client or a voter, technology today gives you an entire toolbox to build tighter relationships with millions and millions of people in a cost-effective way. You’ve got to use that toolbox to gather more data on your customers so that you know more about them, and then use that data to build much closer relationships with them.
Today you have to know your consumer, and you have to be able to have a conversation with them. When you want to drive demand, when you want to build loyalty, when you want to build trust, you’ve got to be able to use technology to talk to people directly.
Don’t most businesses do that already?
Too many organizations think that the relationship with the customer only happens when you do a transaction. I’m platinum with Delta and United and American because I fly all of the time. I have tons and tons of points with each of them, but generally the only time I have a relationship with them is when I buy a flight and show up at the airport. When I’m not at the airport, we don’t really have a relationship. I’m not picking on airlines. I’m just using this as an example.
If an airline cared to learn about me, they would learn I’m not the normal business traveler. I speak for a living, so that means I fly because I have to be at a certain place at a certain time, and I cannot fail because I’m under contract. That means I’m a different type of flyer than a vacationer or a typical business traveler. But does the airline know that? Does the airline care about that? If they just asked me two questions — what are the main reasons I fly, and what are the unique things I need as a traveler — they would see I’m a different kind of dude.
You mentioned big data earlier. Are most businesses using all the data available to them to best advantage?
Data is powerful raw material, and it shows you the truth with a capital T. Most organizations don’t understand the truth. If a Hilton in Orlando has 500 people registered, do they have any understanding of the demographic breakdown of those people, why they are traveling, or why they registered at a Hilton? We could go through a whole list of things they don’t know.
Let’s take another step. It’s going to rain in Orlando. Does the hotel have any idea if the rain will impact the lives of the 500 people that are going to be at the hotel? No. Because they’re doing nothing with the data, nothing with information that could tell them that 300 of those people are coming for a conference so weather isn’t going to matter to them. They’re going to be meetings all day. But 200 of those people are vacationers or in a golf tournament, so we should give them a heads-up before they fly here — it looks like there’s going to be rain, so be sure you pack something to deal with the rain when you get here.
That sounds great, but wouldn’t it require pretty advanced technology capabilities?
As a data guy I can tell you that nothing I just talked about is hard to do. That kind of predictive analytics is something that would help build relationships with customers using data.
But these aren’t technology issues. All of the technology exists to do this stuff today, but we have people who don’t understand the philosophy that data is a powerful raw material. Data can help you see the truth, and you can leverage that truth to do a lot of cool things.
Who should be responsible for technology inside a business?
You’re never going to achieve technology mastery unless all the leaders in your organization become educated. In the past a business leader would say, “Oh, technology. That’s a CIO or a CTO thing. That’s theirs.”
That isn’t true anymore. There are a lot of interesting statistics indicating that within a couple of years, half of all technology spend will be in the marketing department. That is certainly going to be true at an airline, a hotel company or a cruise line. Technology is now a tool that augments every part of a business, which means every business leader needs to become much more sophisticated with technology and what it can do.
Are you seeing more of a company’s top business leaders getting involved with technology?
Over the last two or three years we’ve seen more executives throughout an organization getting serious about how to use technology.
For example, the CFO used to just do the books. Now the CFO is heavily responsible for business intelligence and that means they have to be into what’s going on with technology. Marketing is moving so much more toward digital marketing that the marketing team has to be very good at technology. Technology has invaded so many different parts of a company that the leaders in those parts have to become experts with technology.
What’s the motivation for a business to get its leaders more involved with technology when everybody is already so busy with their direct responsibilities?
When all of the leaders in a company understand technology philosophies their top-line revenue increases and they improve against their competition.
It’s not like I’m just making this stuff up or I think it’s a cool idea. On the ground in the battlefield, where it really matters, I see that when the generals get smarter about all of these technology tools and philosophies, they make smarter decisions and better investments, and their companies prosper.