We need you to create a digital strategy

So, you’ve been tasked with creating a digital strategy.  Where to start?

Do you immediately jump to defining the ways in which you will acquire new customers?  The social media you will use?  The app you will build?  The data you will leverage?

There are many paths to defining a digital strategy and some are inevitably better than others.  Important to note, some of these paths may merely lead to a collection of tactics (hint, the things I’ve noted above fall into this category) with no real underpinning strategy!

One thing is certain, whatever path you take to defining your digital strategy, it must help your business make choices. Ultimately, these choices will determine what you invest in and what you avoid doing. 

This article is one view around how you might define a ‘digital strategy’ that will not only provide focus for your organisation but a way to continually optimise your strategy for long term success.

Ask the right questions upfront – it will save you time and grief down the road.

In a recent conversation with a colleague about creating a digital strategy, we discussed how the meaning and outcome are not universal.

Often, a sponsor, group or organisation requesting the digital strategy may have a particular kind of ‘strategy’ in mind. 

Strategy means different things to different people.  Hence, when tasked with creating a digital strategy it is important to start by gaining clarity of expectations. Two questions you might ask upfront are:

What do you mean by digital strategy?

To what end will the digital strategy serve?

Although, rather straightforward questions, how often have you asked these questions prior to commencing building your digital strategy?  How often has the sponsor been able to clearly articulate answers to these questions?

These questions may go unraised or unanswered due to the fear of not intuitively knowing the answer, or because of ego – believing you have the answer already, or habit, going about things as you always have, the cookie cutter approach.

Making the effort to gain clarity around expectations upfront can pay dividends down the track.

Establish the right level of strategic flexibility

Another important consideration is around the expected longevity of the strategy and the willingness to change.

Given the rate of change today, all organisations need greater flexibility in the way they approach defining a strategy and conducting the associated activity to prove this out.  It is no wonder Amazon’s chief, Jeff Bezos, claims that Amazon will always be a ‘day 1’ company.

For a start-up, pivoting on their strategy is a critical success factor.  For an established company at scale, constant change of strategy can be disruptive and potentially value destroying.  In today’s dynamic environment, regardless of the size of your organisation, there needs to be a delicate balance between making hard to unwind choices and being constantly on the look-out for reasons to shift the strategy.

Be clear on what is strategy vs. tactics

Despite what some would define as ‘digital strategy’, are in fact a collection of tactics that serve merely as investment in activity producing short-term outcomes that serve no higher purpose or ambition.

Although the list below are incredibly important components of a digital strategy, they are enablers vs. the defining factors. These things include:

  • Digital channel / ecosystem (Mobile, web, wearables, chat, partnerships)
  • Digital marketing (search, social, email, content, data/retargeting, etc)
  • Ecommerce (lead conversion, digital sales funnel optimisation, activation, retention, etc)
  • Digitisation (turning manual processes into digital experiences)
  • Ways of working (agile practices, continual improvement, lean, etc)
  • Suppliers & partnerships (in house, outsourced, virtual, etc)
  • Digital Architecture (use of cloud computing, APIs, etc)
  • Data and Analytics (insight, monitoring, AI, etc)
  • Cyber Security (making digital experiences safe, sound and secure)

It is a fact that without execution a strategy is nothing.  However, execution is at risk without a firm steer on what you ultimately set out to achieve and how you’ll know when you get there.

To help achieve this, I’ll share a framework that has been useful in clearly articulating a digital strategy and the components that contribute to its success or failure.

A ‘digital’ strategy framework

The framework and associated tools noted below are credited two leaders in the strategic space, Roger Martin and Gibson Biddle.

Both leaders have a simple way of helping your organisation make choices, inform investment decisions and be flexible enough to embrace external trends quickly.

The framework is built around answering six key questions including a hypothesis driven approach to continually test, learn and iterate supporting activity.

The questions:

  1. What is the context we are operating in?
  2. What is our winning aspiration? (this should be as customer oriented as possible)
  3. Where will we play?
  4. How will we win? (how will we delight customers in hard to copy margin producing ways)
  5. What capabilities must be in place?
  6. How will we evaluate success or failure?

The below is my attempt to translate these questions into a visual framework to aid you in establishing a digital strategy and an actionable program of work based on a continuous learning approach:

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A more granular view of each of these six areas follow.

1.    What is the context we are operating in?

A simple way of assessing and articulating the context is through using the ‘Context Canvas’. I first came across this in the book ‘Design a Better Business’ written by Patrick van der Pijl, Justin Lokitz and Lisa Kay Soloman.

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2.    What is our winning aspiration?

A winning aspiration can be defined in many ways. It may originate by a founder or business unit leader based on their personal vision of how the organisation can win.  In establishing the winning aspiration, it will be important to articulate this from a customer point of view (vs. product). 

To do this, several customer centered frameworks and tools may be used including:

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A less common approach, but one that I’ve found interesting in defining a vision (in particular one that looks into the future across a 3 to 5 year timeframe) is Gibson Biddle’s ‘GLEe model’ where he recommends asking three questions:

  • What will enable your organisation to “Get Big” over the next 3 – 5 years. What are the trends for your company and products?
  • What will you “Lead” 3 to 5 years in the future, what is the next wave your company will ride?
  • Assuming you establish a leadership position, how might your organisation expand further?

3. Where will we play?

In answering this question, there are range of traditional strategic analysis tools that help to understand some of the following:

  • Industry structure and attractiveness – including competitor analysis (think Michael Porter)
  • TAM – SAM – SOM – Helping to understand how big is the opportunity – consider the total addressable market (TAM), serviceable available market (SAM) and the resulting target market (most likely buyers)  
  • Customer analysis including persona development, customer journey mapping, value proposition canvas design
  • Digital channel and ecosystem assessment – this involves considering the various channels the target segment use i.e. web, mobile, chat, wearables, etc.  Also, worth considering is how these complement or compete with the other channels customers interact with including bricks-and-mortar channels.

4. How will we win?

This is where most of the fun begins in developing a digital strategy, in particular through applying a continuous learning mindset!  This is where strategy definition and execution may bleed into one another through the use of frequent, iterative learning activity that continuously transforms the business model / product as these learnings crystalise. 

This approach takes courage to be open and honest about defining hypothesis and then committing the time and effort to validating these.  Some of the tools to progress through this stage include:

5. What capabilities must be in place?

6. How will we evaluate success or failure?

In considering the way we might win, a number of capabilities will underpin this, specifically, the technical competencies, resources, systems, activities etc.  These will become even more clear when devising the associated initiatives aimed at delivering on the strategy.   This is illustrated in the table below outlining how the various strategies may be tested using metrics with defined success measures and the associated tactics/projects aimed at proving/disproving the strategic hypothesis.

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By aligning the tactics and initiatives to measurable proof points, you will have an objective way of evaluating the performance of the strategy and quickly make decisions around whether the strategy needs to be changed, abandoned or scaled.

So what are you waiting for?

The next time you’re asked to come up with a digital strategy, my recommendation would be to pause and consider the following:

Ask the right questions upfront – it will save you time and grief down the road

Get the level of strategic flexibility right

Be clear on what is strategy vs. tactics 

Apply a structured approach that is measurable

Hopefully, the above and associated tools will help you define a succinct, well evidenced digital strategy that informs investment in some solid tactics to win.

Good luck!

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