There aren’t many companies that are still completely resisting digital transformation. Because any that are probably went extinct a while ago. But this doesn’t mean all companies have worked out what it takes to successfully transition their activities online. In this article, I want to run down seven ways companies get their digital transformation wrong and highlight the dangers of underestimating the disruption that going digital can mean for your business. I’m Svetlana Stanković and, as Team Lead SEO Consulting at the Searchmetrics Digital Strategies Group, I help our clients transform their businesses for the digital age.
The Searchmetrics Digital Strategies Group specializes in supporting the digital transformation of companies. Let our experts show you where your business is on the road to digitization:
Video: Digital Transformation: From Dinosaur to Unicorn
If anyone’s more into watching content than reading it, here’s the recording of our recent webinar about digital transformation. My boss, Björn Beth, Director of the Searchmetrics Digital Strategies Group, and I talk about the pitfalls of digital transformation and what companies need to be aware of to make this transition successfully:
The next webinar in the series is entitled “Pick your battles – stand out as a unicorn alongside the eCommerce giants” and will take place on January 15, 2019. Sign up here:
The don’t and don’ts of digital transformation
There is no one-size-fits-all approach to successfully transforming a business model from the analogue to the digital sphere. Much will depend on your current strategy, where your revenue comes from, who your customers are and what their media diet is, as well as myriad other factors including the internal structures of the company etc.
Whilst the right solution has to be specific to your business, digital transformation is relevant for all industries, with the finance, manufacturing and sectors currently leading the way.
Whatever your industry, there are plenty of mistakes that anyone can make and that apply pretty much across the board. Here, I’ll present seven of the most common things to avoid when planning and implementing your digital transformation:
I’ll look at each of these in more detail below.
1. Don’t think: Analogue company + app = digital company
A lot of people I speak to representing companies say, “Oh yes we’re digital now”. When I actually ask them what they mean by this, it normally turns out they’ve commissioned and released an app. Creating an app to enhance your product or service offering might be one part of a digital transformation – it could be one output that your digital transformation brings with it, but it’s neither the starting point not the ultimate goal. Simply throwing an app into the AppStore and Google Play isn’t going to solve your company’s underlying problems. In fact, apps are often poorly conceived and badly, if at all, integrated into the rest of the consumer’s interaction with the company, in which case they are likely to do more harm than good.
2. Don’t “just do it” for one brand
Even the biggest companies can take missteps. In 2010, Nike owned a digital unit called Nike Digital Sport. They developed and marketed a fitness tracker called Nike FuelBand. After great initial success, 70% of the unit’s staff were cut and the product was discontinued in 2014.
One of the underlying reasons for this dramatic downturn in fortunes was that Nike were unable to work with the data and didn’t have the staff needed to push the product forward. This is an example of where trying to digitize one specific brand or unit within the company can go badly wrong if digital transformation isn’t integrated into the rest of the business’s activities.
Since these early difficulties, Nike has completely revised its digital strategy, making it a core part of the whole business, and can now be considered one of the most digital sports brands in the world.
3. Don’t dig for gold in Silicon Valley
Our next example is Ford. Ford, like Nike, opened a new business segment called Ford Smart Mobility. This division launched to great fanfare in 2016, and was intended to “design, build, grow and invest in new mobility services”. And, with its digital focus, the decision was made to establish Ford Smart Mobility’s headquarters in Palo Alto, California, just down the road from the Googleplex in Mountain View, but nearly 2,500 miles from Ford’s Global Headquarters in Dearborn, Michigan.
Setting up in Silicon Valley isn’t necessarily wrong, but in Ford’s case this was symptomatic of how detached its digital activities were from the rest of its business. If you’re not prepared to let digitization disrupt your existing activities, then you won’t be able to reap the full benefits, and you’ll end up with a half-baked strategy that’s unlikely to succeed. Ford’s share price fell by nearly 40% and the car giant has since changed its company goals to implement digital strategy in the core business.
4. Don’t put your products first
This sounds counterintuitive, but businesses in all industries could learn a lot from more modern ways of product development, like the lean startup methodology, design thinking and agile development. Lean startup methodology and agile development practices are closely linked. They both aim to shorten development cycles and focus on iterative product releases driven by validated learning. This goes hand in hand with design thinking, which begins with the audience and their needs, looks for a creative solution and only then begins developing a prototype. This is a completely opposite approach to that followed by many traditional companies.
5. Don’t forget about people
People might seem unreliable, expensive and all-round old school. I mean, who needs human resources when we have machines to do everything? But, of course, having the right employees working in the right positions is a vital cornerstone of any digital transformation. This doesn’t mean you have to fire your entire workforce that is outside the 18-35 age-bracket. But it does mean you need to ensure that you have digitally tuned people driving change, and that you have staff who are open to adapting the way they work to today’s challenges. To paraphrase Barack Obama, if you put lipstick on a stegosaurus, it’s still a stegosaurus.
6. Don’t go chasing buzzwords
There are so many topics flying around that have some connection to digital transformation, that many businesses, often at the whim of their executives who’ve just read an article about The Next Big Thing, try to jump on the latest digital bandwagon. Blockchain, Augmented Reality and Artificial Intelligence are three things that can be used effectively by marketers, but only if the processes are thought though, done right and implemented in a way which provides added value for customers and is closely integrated into the overall business strategy.
Simply trying to chase the latest trends without a fundamental understanding of what digital transformation entails will only result in wasted resources and infuriated employees. It’s much better to look at where digital technologies can make a real, tangible difference to your company’s work, with Software-as-a-Service (SaaS) considered the most viable solution – more so than some of the technologies that are en vogue with today’s press.
7. Don’t do bits and pieces
I’ve mentioned new workflows, and having the right people and technologies. And the structure of this article might make you think you can pick two or three of my don’ts and focus on them. Wrong! You can’t pick and choose which bits of your culture to transform. Adopting new ways of operating into an existing company is hugely disruptive, but it’s an essential part of fostering an innovative culture. And you need this culture to reach into every corner of your business if you’re going to develop ideas and products that meet the needs of today’s consumers.
Conclusion: Disrupt or Die
A common thread running through these mistakes is companies, in some way or another, not fully embracing the digital transformation. Too often, they see going digital as something to tack onto their existing business, either as a gimmicky app or a separate division, without realizing that digital transformation, to be effective, needs to get into the core of the company, disrupt its current operations and shake up its staff.
Digital transformation can’t be a little budget line hidden away on the fifth tab of your Excel spreadsheet; it has to be something that’s driven and promoted by C-level, implemented by willing, capable employees, and backed up by a long-term, sustainable strategy. It’s not easy, but that’s how to succeed and avoid extinction.
If you’re wondering where to start your digital transformation, or you’re interested in where your company is currently at, you can have our experts provide valuable insights into the state of your business’s digitization: