From reactive to proactive: Digitalization's impact on SMBs

Jeff Hayward: All right, let's go ahead and dive right in. So in the setup teaser for this session, we talked about several factors that are contributing towards the acceleration of digital transformation. Some of those factors that we talked about include the introduction of the digital native generation both into the employment workforce as well as a primary consumer. Of course, you have to talk about the global pandemic and the impact that it had. And then you just have the evolution of technology itself, all really contributing to the evolution and the speed by which we're seeing digital transformation. And as the digital transformation mindset has kind of taken hold, we've seen this shift from a reactive model to a much more proactive model of I really need technology to help me drive a smooth, innovative business. So as we contemplate that, one of the things to lead into the first question is we did a survey and we found that three out of five small business leaders surveyed in 2022 in our new state of the workforce. This was a survey done by both TriNet and Morning Consult, said that the pandemic accelerated digital transformation.

Now I know you both lead companies that have been very innovative prior to the pandemic, but we're very curious to find out how has technology helped you kind of stay abreast and adapt to this market shift? As well as kind of the shifting expectations of both consumers as well as customers.

Eileen Mockus: Why don't I kick this off? Coyuchi is a brand that, our purpose is to enliven personal spaces with products that tap into the energy of the Earth and regenerative practices. That means we sell home goods for using organic cotton and other organic fibers in sustainable practices. We're an e-commerce business with one physical retail store and about 300 different retailers across the country. So the digital transformation for Coyuchi was really focused around how do we service customers differently? And particularly during the pandemic in physical retail. E-commerce was a little bit easier, although needing to have a customer service team that was working from home was a little bit different. But in the physical retail store, I think that's where I was really excited by how quickly that group transitioned to wanting to use digital tools that in the past they wouldn't have looked at. They were, and we still are about a connection with our customer. And that connection shifted to digital means. It was using an iPhone to shop in the store with a customer.

It was a lot of posting on social so that people could still see what was available. Then it evolved into appointment setting for customers to make an appointment to come into the store. All different ways of using technology to service a customer that we wouldn't have looked at prior to 2020.

Jake Goldman: So the company that I run is called 10up. We're a digital agency. We've actually been remote since 2011 when the company started. I think we might bring a bit of a different perspective to the panel because we also see all the ways that technology is accelerating change across our customers. And I would echo a lot of what you just said about accelerating trends that are already happening in a remote workforce. I think you combine a new generation of expectations and the further acceleration of something like a pandemic. And we work with a lot of companies that have been used to having a very in person presence. We work with, in some cases, organizations as large as, here in California, help the DMV through a transformation. A lot of those organizations are not normally accustomed to really breaking old molds, breaking old trends where you're used to coming in person and taking a ticket and standing in line. And they have a whole bunch of ingrained beliefs around, "It has to be done this way.

It's for security. It's for privacy." And when you suddenly can't have people come and show up in person, it forces you to say, "Well maybe it's time to cut the cord." And so we saw a acceleration toward using bots for online communication initially. Moving to even something like Zoom or similar sort of enterprise solutions for conducting business online that there was not an immediate available fully built application alternative where you used to have to come and see someone in person, that you could quickly move that to online. So I think a lot of what we've seen is the emergence of these high bandwidth video conferencing, of mobile technology, has really forced customers to sort of cut ties with old ingrained ways. And move faster into full online commerce, into full online experiences. Even if those have an in person element.

Jeff: Excellent. So there's another study that was done in 2022 by McKinsey. And I can definitely relate to this study because one of the challenges that they highlighted in digital transformation is access to frontline talent. And how hard it's been to find that talent. But one of the interesting things in the article is that it also identified the importance of leadership in technology evolution and technology adoption, which I can also relate to as CTO of TriNet. So the question I have next is what are some of the biggest challenges that you faced in your organization with the adoption and really moving through your digital journey?

Eileen: I'll go ahead. When I think about how we've been able to adopt technology across the organization, one of the things that is always present is that you've got a range of different backgrounds, skill set, interests. And how do you collectively allow for everyone to learn how to use that new technology. Because you've got people learning at different rates, a willingness to adopt at different rates. And really needing to take a step back and make sure that you're bringing everyone along together. And that's a level of training, but it's also a shift in the processes that we're using. And giving some time and space to allow those processes to evolve. And make sure that you're bringing everyone along so that we get the outcome that's desired. And for a business like Coyuchi where we're servicing a customer that has high expectations. If they're shopping online, they are already using a certain level of technology.

And what I find works well for bringing a focal point to your employee base that there's a willingness to make those changes, is really giving it a central focus. So for us it's how do we better service a customer? And what are the ways that this technology is going to help us serve that customer faster, easier, get to resolution? Just help them with whatever they're trying to do. And to my earlier example in the physical retail store, I think that's really the tie in. Our sales associates, they want to service their customers. And we aligned technology and they were more than willing to use new technology to be able to deliver to the customer.

Jake: I would echo that. I'd also say one of the more startling challenges I think presented over the last few years has been in an area that we see a lot with a lot of our customers. And we personally experience. Which is how you do marketing in that area. And I don't mean like buying ads on Google or Facebook or wherever people buy ads now. But a lot of small businesses in particular or a lot of medium businesses, even some larger businesses, they really were used to using conferences, using in-person networking events like this one to grow their business. They were used to being able to put on a conference or go to invite a bunch of people to a speaking opportunity. I think shifting out of that mindset into different ways of reaching people that are more asynchronous, that are more on people's own time, that are more from the comfort of your own home or from your phone, has been critical.

So I think we've really seen a sharp increase in using content marketing through digital means. So things like online newsrooms. Things as simple as blogs or engaging with social media in a different way. I think the shift to how do we asynchronously make a connection, the shift to how do we let people on their own time in their own locations make a connection with us, hear about our stories, be engaged by what we have to offer the world, has been a pretty large adaptation.

Jeff: So I'm hearing a theme as you're talking about your experiences on this digital journey. And it's an exciting theme, because I think a lot of what really resonates with me is that you're talking about putting the customer at the center and finding new and different ways to service the customer. And we were speaking earlier, you had given kind of a real interesting example of some of these companies actually just used to set up tables in front of the Home Depot and that was the way that they reached their customers. All of a sudden we have a pandemic and now we can't interact in the same ways, much like what you just mentioned we're doing here today. And by the way, this is super exciting to see so many people in the room and have a chance to interact with so many people at the same time. But as you look at these technologies and you've mentioned several of them that's allowed you to interact in new and different ways. Are there other technologies in your company that you've seen kind of growing and becoming more important over the last couple of years?

Jake: I can maybe start with that one. Maybe a bit more internally focused than externally focused, although our application's externally as well. I think one of the most interesting areas, not just because of the accelerant of remote work but also a different kind of digital generation. We can be cliche about the gap in culture between some of those generations. It's a lot of sentiment tracking tools I think have been really interesting. So really, I think TriNet has some solutions as well. We've also, being a cliche, a digital agency, we built one of our own tools. But, the need to move away from counting on, "I walked by Joey's office and he seemed to be smiling today, he must be doing well." Moving out of the mode of, "I can read the room in my business." And into a mode where you have tools that do things like, on a weekly basis on Friday, probe everybody on your team, "How productive did you feel this week?

How are you just feeling in general this week? What was the hardest part of your week? What was the worst part of your week?" And be able to roll that up into key analytics, and for the top level of the organization to track sentiment and shift. But also at lower in the organization to be able to see on a very individual base what's going on. I will also say in addition to seeing a lot of these tools popping up, a lot of these sentiment trackers coming online. I don't want to just look at it as like, "We have to do it this way." I actually think the data's better, the understanding of your team is better when you're not relying on a way of thinking that as, "I can sort of read people's minds. I can sort of read people's room." Maybe just briefly sort of germane to that.

The other big area that I think has really been exploding, and some of this is technological change, some of this is more businesses moving online and depending online. Some of this is frankly just large players like Google changing their tactics in the space, is there's been just an explosion of new analytics platforms, new data platforms, new tools. Whether it's for online or just aggregating other data sources. To get really interesting visualization, to get a really interesting lens into what's going on, both in digital and in other channels. So I'd say technologies that are in analytics tracking, analytics understanding for digital, for other like BigQuery kind of metrics. And then very specifically in sentiment tracking and understanding sentiment and morale in your team have been two big areas that have exploded that I think are huge.

Eileen: I would agree with both of those. And in particular we've seen the use of analytics and needing data visualization. And an understanding of data and visualization tools in a way that wasn't necessarily as necessary in past years. And I think that's really exploded in a way that is really beneficial to individual roles. But it also again needs to come with a fair amount of training and understanding. And there's a learning process which we have to recognize as part of adopting different new technologies. And then I'll kind of mention the obvious one, but within Coyuchi, the use of Slack, the use of Zoom. But Slack was really the tool that I think replaced the in-person best, because it had that casual side to it. It moved quickly. It felt more like a conversation. And that was really, certainly, just essential over the last two years with so much remote work. And then figuring out the way that we want to use Slack go forward versus other communication tools.

That sort of opens up another element of, as leaders, how do we guide the use of different tools and keep it appropriate. And appropriate, meaning it's the channel that you know where to look for something. Which I think, then becomes part of your cultural norms of how you're using these different tools, that really impacts how employees feel about their jobs.

Jeff: And I think those are both great examples. There was a report done in 2021 by the Society of HR Management and it talked about just the increase in HR-related technologies. And that in 2019 only about 56% of companies were looking at those types of tools. By 2021 it had exploded to over 75% of organizations are looking at that. And I think we as employers have new responsibilities that we didn't have several years ago. And I really like the examples that you gave of sentiment tracking, just how do our employees feel, how engaged are they? And the example of collaboration and how important that is to feel connected as an organization. And I think us as employers have responsibilities in areas like mental health that we didn't have previously and just making sure we understand how our employees are doing.

I think it's also put more responsibility on us, not only for the collaboration. But the ongoing learning and making sure that they understand how technology's changing in the organizations. And the new expectations of our customers and our consumers as they continue to evolve as well. So you mentioned some of this, Eileen in your introduction on the importance of the adoption of technology and the training and some of the things that we have to do to make new technology successful in the organization. So do you have advice to share with the audience here in terms of, what do we really need to do from a training perspective to have these new technology tools be adopted?

Eileen: I think it starts the moment the employee walks in the door. And I have to give a compliment to our people operations manager, who I hope is here tonight. But she really revamped our onboarding process so that we were clear about a number of different things. But one component of it was the technology that we're using, why we use it for different things, how we want to use it. So that we're kind of starting from the moment an employee joins the company to make sure that we're guiding them along the way. And then I think that's an ongoing challenge, is to make sure that the technologies that we're using get broad adoption. And if they aren't getting broad adoption, what's the retrench and reeducate so that the tools that we're putting in place to try and make work flow more smoothly, use people's time more efficiently. That those things are really happening. And it's a constant assessment.

If one team is working well with... We've got teams that use Asana at Coyuchi and some teams were really adopting it more aggressively than other teams. And creating the opportunity for them to see how they were using it and just that kind of cross pollination of ideas. I think that is another kind of more organic way to allow for training and learning without it always having to be a very formal educational process.

Jeff: It's an interesting kind of dichotomy in terms of what we face as employers. There was a study done by Gartner in 2021 that said since the pandemic, 72% of employees report having to use more digital tools than they had ever used before. But unfortunately the flip side of that same study said that 45% of them struggle to really navigate the complexity of the new tool landscape that they're responsible to now be able to be proficient at. So I think the advice that you've shared is so important for all of us to understand that technology adoption is about the business process. You had mentioned when we were discussing previously that there's a cultural aspect to the adoption. And that you had spent some time kind of thinking about the culture and the way that the tools impacted the culture. Could you share a little bit more on that?

Eileen: Yeah, so I think that we were an in-person organization and we're hybrid today. But as we all started working from home, really needed to find ways for personal connection. And that's a little bit different than the pivot to using a lot more technology to interact with one another than we may have in the past. And I think there's a level of kind of fatigue that comes with that of the all day on Zoom. Then you're on Zoom, but you've got other messages coming through and you're trying to do both at the same time. And so we really had to pause, again, looking across the organization to figure out how do we rebuild some of those personal connections again. And that it introduced different ways of interacting, trying to make sure there was a little more one-on-one. A little more of the ability to opt out of certain things in the moment, because you just need five minutes away from your screen.

It's a lot of educating when to be online, when to be offline. And really sharing that across the company and kind of allowing people the ability to recognize that the company knew that they were working on adapting. And we would allow them that space to learn a new... It's more than learning. Adjust to a different work environment and the tools that came with it. But it's a constant shift and I think as we bring hybrid back that cultural evolution needs to continue to be a focus for the leadership team.

Jake: I definitely agree with the cultural point. The only thing that I might add is I do think it's critical for businesses, especially if you're more than just a small five, six person team, more than that medium business size. To allow and encourage experimentation across your team and across your players. I think, the way that I see this often go wrong is, "We have now decided as upper management, this is the new tool." Maybe go into your Asana example with different levels of adoption. "Thou shalt all immediately read the documentation and start using this and we know what the right tools and solutions are." The most adopted, the most effective tools both within our own company and I would say looking across our customers, is where they allow some small teams to experiment. To try it, to be excited, to run an experiment of how does it work for your group to be the champions for it expanding out in the business.

So I guess if there's one maybe pithy piece of advice I'd leave it's, when you're trying these new technologies or you're curious about these new technologies or you think it might be the answer to a problem, don't succumb to the temptation that it's got to be all or nothing. It's got to be a total sudden digital transformation across the organization or it's not worth it. Try it in a small subgroup, try it in one team. Give that team a chance to become a champion, to weigh in, to be brought into it rolling out elsewhere in the organization. And don't be afraid to let that experiment fail either. Don't be afraid to say the team tried it, they didn't jibe with it, they didn't find that it worked for their team. It didn't work for your culture. I think that ingredient of experimentation is key.

Jeff: I think that's a great point, because one of the things that we see in organizations going through digital transformation is a shift. It used to be the IT department would go out and choose your technologies and bring the technologies in and help train. Now what we're starting to see in this digital age is employees at every level in the organization, they might come from the business side. They're out there identifying new technologies, they're assessing those technologies and sometimes they're even implementing those technologies. So I think we can't shy away from that kind of test and learn type of mentality. And one of the things I thought was so insightful about your comments about culture is that we often try to go out and assess tools that we think will fit within our culture. But we don't necessarily always look at it from the inverse way that I think you've been looking at it. From the perspective of, "How will this tool actually change our culture? And what will be the implications of that?"

And I thought that was a really insightful point. Because unfortunately if you look at some of these studies like McKinsey actually echoed what Gartner found, is that 80% of the employees that were surveyed said they enjoy using technology. 87% said they'd be willing to learn more technology. But 45% are coming back and saying, "I just don't have the skills to do that." So I think that test and learn type of perspective is so critical in not being afraid to try new technologies as we go forward. So as we look at technology and as you look at the future ahead of your organizations, what are some of the new technologies you think you're contemplating? Or you think might have an impact in your businesses?

Eileen: I think for Coyuchi with a mission towards sustainability, the one that I'd like to mention is a platform that we just started working with, which is Watershed based here in San Francisco. And they are a platform for managing climate goals. They have measurement tools for your greenhouse gas emissions and then programs to continue to measure them. And then measuring them allows you to bring them down. And I think that's a really applicable component of technology that it's not just unique to Coyuchi. It will be hopefully all of us. But that a different approach to how you can make something measurable that can add to the impact that we have as a business. And then allow other companies to realize that the impact they can have as well. So that's one that we're excited about. It's very much tied to our mission and it's very new to the market as well.

Jake: From a digital content creation and agency standpoint, a bunch of tools that I think quite a bit about. One is we're starting to see, I think for the first time, emergence of good technologies for sort of no code marketing, storytelling, microsite implementation tool. Tools that I think are going to become even more accessible to the enterprise like Webflow at the moment. It's a scary time of change in many ways for an agency, because you're starting to see things that were like, if it was sort of front page 20 years ago, making shaky sites, you're actually seeing new, more powerful tools come back to put more control in the hands of designers without making so many compromises. I think it's both an incredibly exciting technology and be able to put more focus on content and spend less on the actual technology implementation. The other I, again, feel almost cliche talking about things like AI, but it is hard when you're in the content marketing space to ignore generative content.

I'm not going to be the guy up here saying, I think you can write entire articles from something like ChatGPT, but I do think there's an acceleration of what it takes to draft content that's real and prepare content. So increasingly, whether it's routine tasks like using vision machine learning technology to automatically create captions or accessible text for an image. Whether it's automatically tagging for your search content or whether it is even taking five bullets and giving you the initial outline to work with of a more fleshed out story to accelerate how fast you can publish content. I think those are going to be hugely transformational areas of change. And then I'd be remiss not to go back to analytics and say like Google's sort of pulling back from the analytics space partly out of fear of compliance and privacy and GDPR and all the rest.

And again, more organizations being even more dependent on digital for their commerce and their sales and marketing. There is just an explosion right now. If everything was Google Analytics or Adobe not three years ago, there's now an explosion. We're trying four or five different analytics solutions, some targeted at e-commerce, some targeted at content marketing and publishing. Some targeted at sort of conversion flow for B2B and B2C businesses. There's an explosion of really innovative tools outside of the usual suspects that are affordable for small and medium businesses. So I guess those three areas are the ones that have me the most excited.

Jeff: You introduced a concept earlier about, as we implement new technologies and capabilities, we have to be aware of the new working reality. And that we have to spend the time training and helping our employees understand kind of boundaries related to the new work environment that we all work in. And you had mentioned in the previous discussion that there's some exciting technologies that kind of help with setting those boundaries. Could you share a little bit about some of your experiences there?

Jake: Yeah, I feel like it's a little bit anti-climactic, because they're not really revolutionary. It's one of those things that seems so obvious in retrospect. But it's small things like, I think, it was during 2020 or 2021. Like Google to their calendar suite, and I think Microsoft did the same thing in Outlook, added a configuration to very explicitly show in your calendar what you're working online hours are. You mentioned Slack, I think Slack added more explicitly like time zone, much more advanced news controls. Even at the operating system level. Things like iOS adding very advanced like context focus modes and notification control modes. I think those bode well for being able to figure out how we build the right, I don't want to say walls. But build the right balance in terms of context switching and not context switching, as in I walk in my office, I walk out of my office. I walk to the school, I walk home from school.

When you're in the same space creating... When you're in the same space and you're not in the same office, being able to create some boundaries, being able to set different modes and contexts where you can still have a life, to say it plainly, outside of work. And doing so in a way where you can also make it easy for your colleagues to understand that. Even those that are good at setting those boundaries. I mean we have an international team, I can't remember in 280 employees when I'm about to message somebody whether they're online or not. So I think that's what you're referring to. I think those kind of evolutions to many of our current technologies bode well for a more international workforce. Bode well for having that mental health adaptation, fighting that burnout that you were talking about where you just feel like you're on a screen all day.

Jeff: I think all important as we contemplate kind of the future and continue to go through this digital transformation. Well, I want to thank you for your time today. I think this has been a really good session. I think you shared a lot of really important aspects about not just the technologies themselves and the impact that the technology have had. But really kind of the cultural, the business process transformation, the mental health side of these technologies. I think it's all really important for us as we embrace kind of the future and we go through this digital transformation. And I also really appreciate the way you've framed up how we can use these technologies to service our customers in new and different ways, that we might not have thought of a couple of years ago. Your example that you had shared earlier about your sales associates helping people on your e-commerce site, kind of guide them through that experience. Because at one period of time they couldn't go into your physical stores.

And I just think that that whole aspect of technology is so important for us to embrace. And I think you have great advice that we shouldn't be afraid of it. We do need to understand that from all these surveys that Gartner and McKinsey have done, that our employees are very interested in learning technologies. But at the same time they're also struggling, right? 45% of our employees are struggling with the technology, but 76% of them really want to adopt it and really want to learn more. So I think if we follow some of recipes that you've shared with us today, some of the ways to approach this, we can be very successful as we move through this digital transformation. So thank you for the great ideas.

Jake: Thank you.

Eileen: Yeah. Thanks for having us.