How to set yourself up to get a positive return on your Digital investments

The digital revolution has opened many new opportunities to reach and engage customers, sell products and provide service. Customer behaviours have evolved, which in turn has shifted their expectations. Marketers have rushed to exploit the opportunities and organisations have invested heavily in the technology to capture and use consumer data to personalise and digitise existing processes. However, our SCHEMA® benchmark base suggests many organisations are not able to grasp new commercial opportunities in this increasingly data-driven digital world and struggle to realise commercial benefits from their digital investments. The focus of this blog is to look at what’s getting in the way and suggest practical steps to overcome the barriers.

The three biggest barriers to success we observe are…

1. Approaching digital in isolation.

Many organisations establish digital teams (often badged as ‘centres of excellence’) that execute separately from the rest of Marketing, often without considering the impact on the existing operating model and how they work with the legacy organisation structure. The result is confusion and conflict, with energy wasted on internal politics and consumers receiving disjointed, often contradictory, communications.

In one extreme case, we observed a business unit of a global organisation having two separate and unaligned marketing plans, targeting the same customers, but with different and competing objectives – one from the Marketing Team and another from the Digital Team. In another, we saw separate media plans for traditional and digital channels, developed by different teams in isolation.

2. Seeing Technology as the solution to all digital transformation challenges.

Very few organisations have absolute clarity about what they want to achieve with ‘digital’ in their go-to-market model. There is often limited or an over-inflated awareness of internal capabilities and maturity levels. Hence, it is all too easy for Tech vendors & agencies to dazzle the Marketer with promises of a simple catch-all solution for everything (and to attach a considerable price tag). These solutions tend to operate outside of the corporate technology ecosystem and don’t require integration with corporate systems (whether they should be integrated is a separate issue). Hence, the involvement of the IT function is often minimal, and the standard governance processes the organisation has in place to protect their technology investments are bypassed.

A recent McKinsey study found that 70% of digital transformations fail because they focus on technology first, wasting a staggering $700bn of the $1.3tn invested in digital transformation in 2018. Conversely, research has also shown that companies undertaking a digital transformation focused on culture were 5x more likely to achieve breakthrough performance vs companies that neglected culture. But culture change does not come naturally in organisations. People can be trained on new processes, policies and systems, but attitudes and established behaviours, built up over years, will remain unless a concerted investment to change them is made.

3. Putting someone who only knows digital in charge of Digital transformation.

Our SCHEMA® transformation work has highlighted the fact that successful digital transformation is more about exploiting the opportunities new channels and tools present to optimise and complement the existing business, than it is about radically rethinking the entire business. It often requires a rework of the operating model, reorganisation to break down silos and integrate new roles and responsibilities into the existing Marketing organisation and always needs strong transformational leadership. Unfortunately, as described in the HBR article ‘Don’t put a digital expert in charge of your digital transformation’, digital natives rarely have the depth of business knowledge or commercial understanding necessary to deliver effective change across the wider business.

Overcoming the barriers and setting up for success

The first critical step is to recognise the objective and correctly frame it as a ‘change’ programme. Many ‘digital transformations’ often start as initiatives to improve capability and performance within a single team or, in some cases, function. However, optimising digital marketing often requires much wider change than a single team. It invariably impacts the entire marketing function and often the broader business (e.g. sales, product, operations, finance, logistics).

As soon as the initiative affects functional areas beyond the immediate control of its owner, managing the change becomes tougher and needs to be carefully executed as, ultimately, success will depend on it.

  • The team and approach required are significantly different from the team that would implement an initiative contained entirely within the digital marketing team.
  • No longer is it enough just to define what needs to change, create a plan to implement it (the “what” and the “how”) and then tell the business what they have done. They still need to communicate the “what”, but often to an audience that is not close to it, does not always immediately recognise the benefit or the need, and will usually judge the change by the limited lens of their own function.
  • Hence, Change leaders need to focus their efforts on personal persuasion; identifying “who” they need to engage, “when” and “why” they want to change things.

To achieve this, the involvement and support of leaders across the business (at least of the other areas affected) is needed.

From our digital marketing transformation projects, there is one common factor that characterises success — leaders understand the change and their role in its delivery from the outset.

There are many reasons cited for not engaging senior leaders early in the process – from a belief they will not want to be involved in the detail, to a fear of the initiative being stopped or derailed because of a lack of leadership understanding. However, all leaders understand commercials and there are no senior teams that won’t be interested in a substantial commercial case. If you are not able to make a case that is sufficiently compelling to grab the c-suite’s attention, consider:

  1. A ‘cost neutral’, step by step programme, carefully designed to generate early benefits to be used to justify further digital investment. It will take longer to achieve full benefit, and there is a risk that excess cash may be diverted elsewhere, but in ‘investment-poor’ or ‘digitally-sceptical’ organisations this can use this approach to build confidence.
  2. A commercial case that comes with a commitment to deliver and where the Leadership can see clear accountability for success.

Once the case is made, adopting a solution design approach that explicitly engages and involves the leadership in setting the vision and agreeing the priorities of their digital transformation will increase likelihood of success and minimise the risk of derailment later in the process. You can then create a team able to provide (1) subject expertise and (2) the ability to facilitate the contribution from other stakeholders across the business. And, if you use external help, make sure they can deliver against both roles.

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For more information, please contact andy.green@thecustomerframework.com