Defining Digital

Five short years ago, if you were to ask organizational leaders to define their digital strategy, the answer would either pertain to their digital marketing efforts or be synonymous with IT. Today, “digital” refers to a more all-encompassing approach,  impacting technology choices, customer experience, organizational culture, leadership styles and of course business models. It’s no wonder organizations are struggling to define their digital strategy.

The latest PwC Digital IQ report suggests that in order to keep up with Canada’s growing commitment to innovation, Canadian executives must gain a better understanding of what it means “to be digital”. While 47% of Canadian leaders see “digital” as a holistic strategy, covering technology and innovation related activities as well as cultural and mindset shifts, 30% of them see it mainly as a customer facing activity.

Therein lies the shift. Organizations are still grappling on how to “do digital” – how to effectively leverage digital channels (web, social media, email, mobile) to support business goals, while simultaneously learning how to “be digital” – developing a culture of innovation, adapting to the ever increasing demands of always-on customers and a changing digital workforce.  So how to strike the right balance, where to start?

First, let’s differentiate Digital Marketing from Digital Business Strategy

A Digital Marketing Strategy is a plan to market your business through various online tactics (e.g. SEO, SEM, content marketing, social media, email marketing, online campaigns). Some of the most common goals are to increase awareness of your brand, attract and convert prospects into customers, engage post purchase, influence or reach various stakeholders.

The digital marketing strategy should be fully integrated with the enterprise marketing strategy, which is aligned to the business strategy.  The first step is understanding the “why” behind your efforts. A common pitfall is to focus on vanity metrics without truly identifying the outcome. For example:

• Grow our database (to what end?)
• Drive more traffic to our website (for what purpose exactly?)
• Grow our social following (in order to achieve what specifically?)

A Digital Business Strategy on the other hand takes a much broader view. It typically outlines how an organization will leverage and deploy digital technologies to create value for the business and its customers and improve overall performance ­(i.e. implying both back end, bottom line improvements and front end, top line revenue goals). This strategy must address other performance drivers such as required changes in business processes, shift in organizational culture, and development of innovation practices to help the organization compete effectively in a digital world.

Understanding the difference between these two strategies (and ultimately who will lead them) has two important implications for leaders according to a recent MIT Sloan research on digital maturity. First, it means that digital business strategy is fundamentally about “how your business responds to digital trends that are occurring whether or not you initiated them, like them, or want them.”  This all-encompassing strategy involves adapting to customer expectations, changing business models and market dynamics.  Second, it means that technology is only one part of the equation. Other factors such as collaboration across the enterprise, organizational structure, leadership and talent management are just as important, if not more so, than technology on the success of a Digital Strategy.

This is in part why the term “digital strategy” in and of itself seems inadequate and the word “transformation” is favoured by many larger organizations. As MIT offers “organizations don’t wave a magic wand and instantly become digitally adept.”  Instead, it is better envisioned as digital maturity or a gradual process that unfolds across the organization over time.

Where to Start in Defining your Own Digital Strategy or Transformation

Here are three key steps at the outset to identify the depth and scope of your digital business strategy:

1. Focus on outcome vs. technology and build consensus. Start a conversation with your key stakeholders focused on the problems you need to solve. What outcomes does the organization need to achieve? How is our industry changing and what trends must we respond to? How do our customers want to engage with us? Note this exercise will likely yield a mix of larger business challenges along with more tactical operational issues. And that’s ok. You can’t build a sun roof without fixing the foundation. Often, incremental improvements will be the cornerstone of the strategy but this must be anchored in a broader vision. The key is to frame the challenge and have a common understanding of your starting point.
2. Define your vision. When you have a clear picture of your current state, define your vision – “Digital” means different things to different groups. Defining your Strategy requires an awareness of the challenge, knowing your starting point and deciding the ideal end state. This step is critical in identifying the scope and depth of the strategy. Take the time to socialize your vision, get the required input from customers, stakeholders, suppliers and staff. The vision must be specific enough to give direction but have room to grow and give employees flexibility on how they will meet the vision. You’ll know you’ve achieved alignment when the executive team can clearly articulate the shared vision with a common language and shared goals.
3. Build the roadmap; prioritize investments. Your road map will likely contain major pillars such as customer experience, data and analytics, digitization of operations etc. Each will have a set of prioritized initiatives and projects aligned to your vision. These should not only be technology projects but also skills training, programs tied to emerging technology, new business process mapping etc. An integrated road map across functional areas helps to balance the investments across the pillars and move ahead on a shared agenda.

Undoubtedly, the elements of a digital strategy will continue to evolve in coming years with emerging technologies and a growing digital workforce. Defining what “digital” means for the future of your organization and developing a common working language will facilitate the ability to move forward at scale rather than incrementally, in silos.

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