“We’re going digital”.
Everywhere you look these days, companies seem to be talking about their “digital” strategy or their need to create a digital strategy, partly because it feels that to not have such a strategy is to be labelled a dinosaur, a relic, at great risk of being left behind in this rapidly changing and digitalising world. Sometimes, and rightly so, this is driven by a real fear of being overtaken or disrupted by faster moving competitors, and so “we wanna get there before someone else does” is a phrase that I’m guessing has been uttered more than once in the meeting rooms of incumbents worldwide.
But below the headline phrase, what exactly does “going digital” mean?
The problem is this….going “digital” can mean all things to all people – 50 shades of digital, if you will forgive the pulp fiction reference. Within a single company, there can be a very wide range of understanding about what is required from a digital strategy and what it means to have achieved success. I’ve personally heard all sorts of motivations, including everything from the list below, and more:
- Building a digital brand presence (eg “I need an app/ a website for my company!”)
- Reducing one’s current cost structure by improving the efficiency of internal processes (“I want to streamline my internal processes and remove some costs”),
- Changing a legacy, high-touch, high-cost service model (“I want a self-service, low-cost channel to market”)
- Bolstering a company’s omnichannel experience (“I want my customers to be able to reach me through whatever channel they wish, including online”).
- Communicating with, and engaging with, customers differently (“I need a Facebook page and a social media strategy”)
- Improving a customer experience (“Let’s allow customers to check their accounts online, instead of calling us” or “Let’s stop sending paper bills to people, and send them a PDF instead”)
- Setting up a digital incubation/disruptor unit to completely rebuild the business from inside out (“I want to build an internal attacker model before someone else cannibalises my business”)
“Going digital” can include one, many, or all, of the above. It’s worth mentioning up front that all of these options are potentially valid, all can add value in their own way. But how this diversity of understanding manifests itself in many companies is that each department or business unit runs off, chasing down one, several or all of these objectives, resulting in lots of internal friction, tyre-spinning, piecemeal and uncoordinated efforts, and ultimately confusion.
Sound familiar? It’s really not so unusual for many companies. In the mad rush to quickly deal with the perceived imminent threats surrounding us, it’s so tempting to act first, think later. And more… to go big, making large scale investments in a myriad of initiatives designed to show a serious commitment to your customers, board and shareholders about your digital intentions. While I will never be one to knock the benefits of sometimes following your intuition and taking action fast, this is one area where I think that pausing to build a little bit of alignment in terms of language and objectives, and strategising about your desired approach and outcomes, can pay huge dividends in terms of getting everyone lined up about the objectives of any digital programme of work.
I’m reminded here of the classic definition of “strategy” that was drummed into me in my early days as a young strategy analyst…a strategy is “a plan of action designed to achieve a long-term goal or overall aim”, and being generous, you might even include medium-term goals. But the point is that strategy is to be distinguished from tactics, which may have a much more immediate payback. It strikes me that starting a digital dialogue should be a very “strategic” conversation, and is something that may not yield an immediate, next-year benefit payback, but is absolutely crucial for long-term survival and growth, given the pace and magnitude of the changes playing out around us.
There is an important nuance here also in that “strategy” – in the traditional sense of having a 3-5 year long-term plan – is possibly a luxury that we simply can’t afford any more in an environment that is changing so rapidly, as it’s almost impossible to plan anything with accuracy out beyond 12 months. Let’s face it, back in 2007, the same year that Apple launched its first buggy iphone, who would have predicted the scale of change that would be upon us in the next ten years? The idea of predicting the future with any accuracy for the next five years seems almost nonsensical in that context.
Given all that, your digital strategy may be no more than an aligned understanding about the outcomes you’re trying to achieve and a clear picture of what success looks like. And again, let’s be clear, it’s a big aligned vision, but an incremental, iterative – and tactical even! – approach to implementation. (More on that in another blog).
So back to your company’s objectives. While others have written about how digital should be seen “less as a thing and more as a way of doing things” and others pose that “there is no digital strategy just strategy in a digital world”, one of the most important distinctions to understand is whether you are looking at a particular digital initiative as a means to:
- enhance and improve aspects of your current business model (without changing anything about the underlying operating model itself), or
- using a digital as a vehicle to reconsider and reinvent your entire way of doing business (ie completely changing all aspects of your business, from your CVP (customer value proposition), how you price, offer and market that to customers, your sales and service model, your channels to market, fulfilment and delivery journeys, billing and payment options, through to technology and IT platforms).
Or put more simply, it’s about understanding the difference between digital enhancement to your current business vs digital disruption by building a completely new business model.
To use a very simplistic and generic example,
it’s the difference between slapping a website on the front of your current business, without changing anything else, or building a website as the front end to a completely different CVP (customer value proposition), sales and service, technology and delivery model.
Next week I will explore the impacts of these options in more detail.
MK
