Why You Should Pay Attention to Digital Strategy & Corporate Innovation
Digital strategy implementation is no longer a choice, it is a necessity. And a compelling website is now the price-of-admission in most industries. Even in low-tech industries, exploring digital strategies and innovation can revolutionize a business.
June 9 2011 by Tim Bourgeois
This is the first of two articles by Tim Bourgeois on digital strategy. The second piece can be found here: A Low-Tech Case Study: How Mac-Gray Took Laundry Digital
Social media – the blanket term capturing Facebook, Twitter, LinkedIn, etc. – gets an inordinate amount of attention these days and therefore seems to be the driving force behind smart digital strategies. The more applicable story for most companies is the steady drumbeat of continued investment in digital business fundamentals: online advertising, email marketing, website development, community building, and “cloud” solutions. In effect, all of the pieces of the of the digital strategy puzzle: a loosely integrated collection of tools, techniques and methodologies which individually or together help companies do business better, cheaper, and/or faster.
While advancements in the sector over the past decade have made it easier for companies to conduct online business – website management, e-commerce, and online video are a few examples – best practices for managing successful enterprise-level digital strategies remain elusive. For proof, look no further than high-profile disasters at companies like Borders and (ironically) AOL, the cause of which are generally understood to be ineffective transitions to the digital economy.
To be sure, some industries (publishing, retailing) have been far more directly affected by the emergence of the internet than others (oil & gas, professional services). But competitive intensity in general does not differ much across the marketplace; innovation is always at work, and the lure of fortune and fame drives entrepreneurial activity in all corners of the economy. While creative digital strategy has been the tool-of-choice for executives in some instances over the past decade, it’s increasingly becoming a “must-have” for all senior leadership, regardless of industry or geography.
Good Hygiene Versus Innovation
Meeting basic digital business requirements rarely, if ever, results in meaningful competitive advantage. These fundamental principles, however, are sometimes confused with digital strategy. For example, a compelling website that effectively represents a brand, or prominent search engine placement, is now the price-of-admission in most industries and most certainly among the Global 3000.
By contrast, smart digital strategies alter the rules of an industry, at least temporarily, but are sometimes not glaringly apparent. Indeed, few companies are best-in-class across the enterprise when it comes to digital strategy. While Wal-Mart is a whiz at using web-based techniques and systems to reduce costs in the supply chain, its public-facing website is not recognized as leading-edge. Ford’s online shopping experience was revolutionary when first introduced, but the company doesn’t use the web to generate leads effectively. Citibank’s online service tools for its consumer credit card business are outstanding and support customer retention, but its online bill paying option for some types of loans is nonexistent, or downright embarrassing.
Often the biggest challenge companies face when formulating digital strategy is figuring out where to begin. It’s rarely a top-down exercise, and is in fact more likely to swell up from the rank-and-file, especially at larger organizations. Since the digital platform is a multi-purpose tool, applicable across a company – through sales, marketing and operations – innovation often occurs in pockets, and then makes its way through an organization.
Most senior executives spend a majority of their time trying to figure out how to maintain a competitive edge. That involves figuring out how to maximize stock price, squeeze a percentage point of improvement from this line item or that line item, stave off VC-backed press darlings that may eventually prove legitimate but probably not, and – on more ambitious days – brainstorm about leap-frogging the competition to enjoy legitimate supremacy, at least for awhile.
For better or worse, digital strategy has the ability to contribute to all of these initiatives. Web marketing is an obvious pursuit because it’s market-facing, tangible and easily measured; you can see it and feel it. But meaningful, defensible innovation that sticks for the long-term is another animal altogether. Looking for ways to employ digital strategy in unexpected places may be the best way to attack these kinds of opportunities.