WORKING BACKWARDS FROM THE CUSTOMER

Marco Argenti, Godman Sachs’ current CIO and former Vice President at Amazon Web Services, sums up his approach to digital transformation with “working backwards from the customer” in a recorded interview by Forbes.

Argenti’s approach to designing digitally-enabled products and services for external customers and clients is to begin with these questions: Who is the customer? What customer problems are we trying to solve? What opportunities are we trying to capture? What is the current customer experience?

Although the concept of customer-centricity is not new and many companies apply design thinking to innovation initiatives, Argenti describes in this interview how he applies working backwards from the customer at Goldman. He highlights new ways of organizing, operating, and thinking. The interview served as the starting point for a recent virtual discussion among Advanced Practices Council members, all of whom are heavily engaged in digital transformation journeys in their companies.

Argenti embeds engineers in revenue-producing businesses and divisions to help them understand the business and its customers. Goldman engineers “build and deploy the innovations that drive … business and extend boundaries.” Categories of engineers include quantitative strategists, cyber security analysts, software engineers, and systems engineers. And although engineers are scattered across Goldman’s business units, they all have access to a developer portal that contains highly reusable services or software that can be used across teams to facilitate effectiveness and efficiency.

Argenti created a new unit entitled Platform Services. The concept of offering services as a service via a platform is also not new. In a recent research report sponsored by the Advanced Practices Council, Dr. Gabriele Piccoli called the concept “digital resources,” which are modular assets or capabilities exposed via a digital interface. He cited BBVA’s Accounts API, which exposes customers’ account and transactional data as modular components to be reused and recombined easily by internal staff to support mobile banking as well as external third parties, and McDonald’s meal preparation capability, which combines ordering, preparation, and delivery.

Goldman has expanded the concept of customer to include competitors. Marquee, a digital storefront for institutional client services, provides unique market insights, analytic tools, and other data services through its integrated digital platforms. Marquee services are geared to other financial institutions that are competitors. Thinking of competitors as customers is an example of rethinking the competitive landscape where competitors become customers and form ecosystems with business models that couldn’t be achieved independently.