Why you should abandon the idea of having a digital strategy
The biggest buzzword being tossed around business schools, incubators and startup communities is “digital strategy”, and everybody has to have one, or so it is thought. Today’s dotcoms, emerging cloud and Internet companies, and high-tech startups of all kinds are being misled into thinking that “digital strategy” is some separate, mystical domain they must create to be successful.
Howard Tiersky, CEO and founder of digital product development company Moving Interactive, takes the opposite view. That’s not to say that digital isn’t important; but rather, it’s so important that it shouldn’t be relegated to a separate and isolated strategic corporate silo. Companies with “digital strategies” will often have a separate centralized department which hands down digital strategies to everybody else, and the result is often disjointed and chaotic.
“We have seen over the years, that Digital has had a different relationship with the rest of IT and business,” said Tiersky. “In the early days, it grew out of IT and Marketing, then digital was more segregated. During the dotcom boom, we said, ‘let’s create a separate digital team’. Then after the bust, we said, ‘let’s fold them back into Marketing and IT’. Then there was a tendency to separate it out again.” What we’ve seen since then is that Digital has become more mature, and more successful companies today see that “digital” simply cannot be isolated or segregated into an all-encompassing “digital strategy”.
Tiersky continues, “We’re at a point with digital now, where it has to be thought about not as a separate activity, but something that is integrated into just about everything we do. That’s what we mean when we say you should throw away your digital strategy, not that you shouldn’t be strategic about digital, but that you should stop thinking about a segregated digital strategy and just bake it into everything you’re doing.”
Incorporating the digital component back into individual initiatives, rather than seeing it as a separate domain, does bring some challenges. One of the biggest challenges is budgetary. Suppose for example, a centralized “digital” group has a fixed budget. That group is going to make decisions about how to allocate that budget. Suppose then, that another group within the company has a project with a proposed digital component, and they go and pitch the idea to the digital group. The problem there lies in the fact that the digital group—which is not core to the project—gets to make the decision about where the digital dollars go. “We don’t believe that makes sense,” says Tiersky. “We believe what makes more sense is a model where each individual initiative can say that they have a certain amount of dollars for a product launch. And they can spend it on marketing, on doing things in the distribution channel, or on digital. Rather than trying to define the amount of money an enterprise will spend on digital, the budget should be allocated to things that are going to actually drive business, and let those initiatives determine what percentage of the total digital spend should be.”
Besides the budgetary model, a centralized digital strategy creates a “bandwidth” issue in terms of time. A central digital team will only have so much time and can only take on so many projects, and that can create a bottleneck in digital development. “Digital capability has to be dispersed across the enterprise, and you need digitally mature executives in every area,” said Tiersky. Corporate management strategy has gone far beyond the point where it can operate with a separate “brain trust” of digital people in an isolated management silo, while all other groups in the company take an approach of foregoing development of a digital strategy in favor of delegating it to a group that is unrelated to the core task at hand.
Given that every team has to have an organic digital component grown from within, the next issue to resolve is governance. With multiple teams working on multiple digital strategies, there still needs to be a unified theme, lest you have a situation where you have ten different groups going in ten radically different directions. The solution is “digital governance”.
The role of digital governance can take on many forms, and from a marketing perspective, this starts with a brand architecture. Typically emanating from the Marketing Department, this architecture provides guidelines and rules on how to use logos, corporate colors, key messaging, and taglines. Additional governance will be in the tools, software and hardware realm, which may impose standardized content management systems or development tools, for example.
“There are three key activities you need to engage in to impose digital governance,” says Tiersky. “The first is defining standards—how to agree to operate in a consistent way throughout the organization. Second is what we call ‘support for the law abiding’.” This involves providing a support network to help interpret rules, and offer assistance in how to implement them. “And third, is some kind of escalation.” The latter point is where enforcement comes in. “It’s great to say, if we all agree on something, everyone will follow those rules. But in most organizations, there is a benefit to instilling a sense of competition and performance-based reward. If you have governance, it’s important to maintain a process to monitor it, and see whether people are actually complying with those rules, and then we have to have a strategy for rewarding people for actually complying with those rules, and addressing those who step beyond that. Figuring out what makes sense for an organization in terms of the amount of constraint or liberty and independence you provide with individual initiatives is really an important strategic recipe.”