Business Strategy before Digital Strategy

Do you have a digital strategy? It’s a loaded question that gets asked frequently these days. Before we can jump into this question, we have to ask the question before the question. What does “digital strategy” mean?

If you ask 10 professionals this basic and fundamental question you’ll likely get 11 different answers. What do some of those answers sound like? Here are some examples:

  • It’s a way to find more leads using paid search advertising
  • It’s selling products and services online
  • It’s banner ads desperately trying to get people to click on them
  • It’s an digital CRM system that allows my sales team to track prospects and turn them into clients
  • It’s developing a website that naturally draws traffic through organic search and quality content
  • It’s mobile technology that allows users to find restaurants and quickly read reviews and ratings
  • It’s equipping a salesforce with tablets and personalized presentation content so they can better conduct face to face selling
  • It’s using big data and predictive analytics to find out when a fleet of machines is about to break down so you can proactively service it before it gets really costly
  • The list goes on and on….

And you know what? All of these are correct inasmuch as they all use digital technology for the purpose of creating beneficial business outcomes. The problem we often encounter is that “digital strategy” is often used in a way that relegates it only to a subset of business areas…it doesn’t see the entire interconnected reality.

That brings me to the first heretical point of this post. “Do you have a digital strategy” and all of its derivatives (“do you have a big data strategy?”, “do you have an IT strategy?”) is actually the wrong question to ask. The right question is more fundamental…”do you have a business strategy?” Because, in essence, “digital” is merely a medium through which you make your overall strategy come to life.

Jeffrey Immelt from GE summarizes this insight well when he stated that “every organization needs to be a digital organization”. It’s become the fabric of business more than any other medium.

And that brings us back to our image of the body and the digital nervous system that is being developed all around us. In fact, digital capabilities mimic several bodily systems. DIgital wallet, payment and banking tools act as the circulatory system. Connected devices and integrated software act as the sensory system. Machine learning algorithms and predictive models act as the cognitive center of the nervous system. Digital is a pervasive connected tissue.

So if “do you have a digital strategy” isn’t quite the right question and instead we turn our focus to applying digital to meet the objectives of our overall strategy, how might we do that?

The first step is to start in a very analog place – humans. Great strategy is always empathetic and is focused initially outside of the walls of the organization. What do your customers want? What does their journey look like in the world as well as with your brand? What are their goals, motivations, and pain points. It’s in understanding this context that the rationale and frame for applying digital begins to manifest. Contextual design tools like personas and journey maps are very helpful in this fundamental understanding.

I’m working with a client now that was quick to answer the “do I have a digital strategy?” with an answer that was focused on creating digital advertising impressions…they were trying to impact customer acquisition and wanted to fill the funnel. Who could blame them? In working with them, we discovered that, as a B2C service company, they had a lot of data on their customers that was going unused within the context of the service delivery and communications. Questions like “Did a customer just buy the service that I’m now advertising to them?” were never asked. We helped them shift their POV toward digital strategy to be more expansive and to align better with their desire to create ongoing relationships with customers, not just utilizing digital for acquisition efforts.

That being said, digital can be used to tell powerful stories and interact with customers unlike other forms of media. Other forms of mass media are properly labeled as “broadcast” because they only talk to customers…whereas good digital marketing also invites a dialog…an interaction. But the beauty of digital is that it can go beyond storytelling and beyond campaigns to deliver ongoing value and utility. Want to get a new insurance quote in 15 minutes – digital utility helps Geico deliver that. This is the power of digital platforms. Put them together and you have a PB&J moment – campaigns that inspire emotion and action and platforms that deliver utility and ongoing value. Think of it like a retail store: the sign on the window or the attractive endcap presentation is the campaign whereas the store itself is the platform that delivers value to you all the time.

The second step is to realize that effectively leveraging digital for your business strategy is a team sport. It’s suboptimized or even wasted when applied in silos. When looking at how digital can transform your business, you need to look across silos at how the entire organization delivers products and services to the consumer. Look for gaps in coverage across functions, look for information gaps and process breakdowns that could benefit from leveraging digital tools. And by all means put all of your digital tools on the table and share what you use an why  you use them cross functionally. it’s amazing how many orgs can benefit by opening up existing tools to other functions. Another great evaluation tool in this phase is a service blueprint because it shows how a service is being delivered from the customer’s eyes with attention to operational processes and systems.

Finally, another wise step in becoming digitally competent is to continually test, learn, and iterate. The space moves too fast to put rigid plans in place and hope for the best. Continually build hypotheses around how digital could impact your business, set economic and learning goals, and create digital experiments where you can place small bets and increase your effectiveness over time.

Put these steps all together and you’ll be well on your way to having a strong answer to that frequent sub-optimized question of “do you have a digital strategy”.

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Categories: Capability, Communication, Culture, Process, Strategy, Structure

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