How to design a digital strategy

Overview: A digital strategy is not just the sum total of all the actions your company carries out on the Internet. It involves natively integrating the Internet prior to thinking about strategy even on a company-wide level, and identifying areas of presence and action within each function/job alongside other drivers and means. One way of approaching this is to evaluate the potential impact of the Internet on the business model of the company and leadership methods used by senior management, in order to define the right levels of goals, leadership and organisation relating to various cases. Only then can it be translated into action plans.

 

Can a digital strategy be reduced to the sum total of all the different actions carried out by a brand or a company on the Internet? No, because if these actions are not coordinated and geared towards the same final goal, they may cancel each other out instead of adding up. Everything is connected on the web! All the effort you put in to redecorating your sitting room may be ruined if the kitchen isn’t up to scratch… because many visitors may reach your brand through the back door, or even through your neighbour’s door (unlike in real life).

In order to be effective and to be sure we are working towards the right goal, we need to use the brand or company strategy as the starting point for designing our digital strategy, rather than starting off with operational actions and trying to coordinate them, which is useful but is not enough. Once the digital strategy has been defined, it can be translated into an action plan and the question of coordinating different actions will arise at that point. Thinking about how the company is structured internally will also happen naturally, as natively integrating the Internet in the strategy cannot be done by systematically externalising all digital work (in the broadest sense). The interest of this approach is that is enables you to anticipate and reflect on organisational impact before the production phase, instead of discovering it later as collateral damage: discovering the impact beforehand lets you optimise the allocation of resources and make the best choices when it comes to selecting external partners, whereas discovering it later on is always an additional cost!

 

How to turn a brand or company strategy into a digital strategy

Once we have a clear global vision of the digital space and its different fields of opportunity, we must start at the very foundations of the company or brand (mission, values, positioning, brand assessment…) and break them down first into large chunks, then into the different functional areas of the company, in order to identify whether there is any point in adding a digital element or not, and what such an element might be like. Once the broad strokes of these digital strategies have been put into place, people can be identified internally in each functional area / team who will drive the strategy forward and define how it will be implemented and how it will be coordinated. This approach is aimed not only at those brands which are starting out with a digital strategy, but can also serve as a good diagnosis of how existing actions are working out.

 

This may seem complex, but it isn’t. Simply apply a bit of common sense by asking yourself all the usual key questions for any business, keeping in mind the goal you’re aiming for at all times. Some companies carry out brand assessments, which could provide a useful starting point. As with any strategic reflection, it is essential that these questions be asked early in the process, with the difficulty being in making the distinction between what is essential and what is not. For this reason, it may be useful to go back to the basics of what makes a company: an entity consisting of one or more individuals, selling products or services to clients, within an economical, social and geographical ecosystem that feeds it and to which it contributes in return.

Once this work has been broadly carried out at the company level, it can then be broken down for each functional area/target audience in the company that needs to develop an appropriate digital strategy (for HR, for instance, or for investor relations…). For companies with several brands, the approach could be to first look at the company-wide strategy before drilling down into each of its brands.

 

How to choose between priorities and list them in order

The table above provides a snapshot of the different areas where the web could intervene. It next has to be brought to life, by applying selection criteria to list priorities in order and to make decisions: set goals and assign them a budget and one or more managers, who will then draw up an action plan.

Normally, this selection should be made quite logically if the brand or company stategy has been clearly defined, and may prove complicated if this is not the case, since this approach forces you to pinpoint consistencies and inconsistencies in the strategy and the business plan, hopefully helping you see more clearly.

The following (non-exhaustive) selection criteria may be interesting to apply:

– Quantitatively, by estimating the potential impact of the Internet on the company’s business (from the transformation of the business model to relatively minor, non-strategic contributions).

– Qualitatively, through the affinity that senior managers and decision makers have with the Internet, new technologies and their general management style.

 

The impact on the business model, putting into perspective current issues faced by the company

Can the Internet have an impact on the company’s business model?

What are the key issues faced by the company today, compared to its stage of development and its market?

What is driving the company’s growth and how can the web and/or mobile make a more or less significant contribution?

Will digital activity potentially have a significant, medium or low impact on the company’s business model? In the short, medium and long term?

Is it in a market that is emerging, growing, mature or in decline? Local, national, international?

Leader or challenger?

Does the company have shareholders, or is it family owned?

What growth drivers have been identified in order to achieve the objectives set? A strategy of innovation? Cost reduction? Partnerships?

What are the company’s competitive advantages compared to its competitors? Where and how is value created within the company?

For an international firm in the CAC40 that is well established in its market today, it is likely that the web and the mobile are not going to revolutionise its business model in the short term. However, they could help to give an image of modernity and innovation to the company and enable it to test future models in order to maintain its leadership, or niche models for particular segments of customers. For a small or medium business, however, or a firm that is either losing momentum or becoming a challenger in its sector, the Internet could well become a strategic driver of growth by enabling the company to reach new markets through greater national exposure, export, a strategic repositioning of its business, etc. The sector or category of products is also important: for the press and indeed the media in general, the Internet and the mobile phone could potentially have a major, even critical impact on their business model. The same is probably not yet true for consumer food products sold in supermarkets… If the Internet directly affects the company’s business model, the firm will need to review its internal organisation and how its external suppliers work.

A significant contribution to one or more strategic functions

In this case, the Internet does not put this company’s business model at risk but may have a significant contribution to make in one or more areas of the company: sales strategy, communications or recruitment, for instance. If several different functional areas are concerned, they will need to be coordinated in order to establish priorities and define the internal “leader” and the rules of precedence should a conflict of interest arise (it can happen very quickly: who controls the SEO strategy and which key words send traffic to which part of the site?). This is the case that many companies find themselves in today, at the crossroads where several possible paths converge:

– What type of coordination should be set up internally, and to what extent? Should there be a “lead” function or team for the Internet, with the other departments operating as internal clients?
– Should everything be outsourced to specialist partners, or can some of the work be carried out internally? Which part? Production, creation, community management? Should we create a single internal Internet group that works for all departments, or should there be a specific group in each department? Etc.

Of course, there’s no set answer, but these questions need to be considered as much as possible before decisions are made, or you risk wasting a lot of time and being a lot less efficient further down the line, to say nothing of the internal or external tensions that may arise with the different people involved. Whatever organisation is chosen at a specific time, you can be sure that it will evolve to keep pace with experience acquired and developments in the web and mobile. Even if companies end up choosing to outsource everything, they can’t avoid having to train their teams and develop strong internal expertise in the web and mobile business, if only to be able to evaluate what they’re buying!

If the question does not arise between different business functions, but between different brands in the portfolio, the same strategic logic should be applied: first by looking closely into the specific positioning of each brand in order to come up with an appopriate digital strategy, instead of trying to ensure a return on investment for the e-commerce infrastructure for instance, which will then be applied systematically to all the group’s brands because it has been paid for! This does not mean we need to invest separately for each brand, but it does mean that the tool should serve the strategy and not the other way round.

A minor contribution to one or more functions

In this case, the Internet comes further down the line, as one channel in a communications strategy for instance, and the pattern of activity does not seem to suggest a more strategic role in the future. This could be the case for many local businesses, for instance. The Internet will be confined to the role of being an information and communications “window” for these companies, which could outsource the work without too much prior strategic reflection, provided they keep their managerial wits about them: keep an eye on the different types of tools and services they are offered, keep control of their site and its updates or at least ensure that it can be done easily, etc. Completely outsourcing a service with little strategic benefit (or one which is perceived as such) does not mean giving away your rights to managing your brand or business!

How senior managers / decision-makers feel about the Internet and their management style

This element is the most difficult to determine objectively yet is often the most decisive when it comes to taking decisions: how senior executives feel about the Internet and the idea of embracing new technologies and new ways of managing and developing their company.

Whatever initiatives are taken by the different operational teams, if the Internet has not been identified as strategic by the CEO, and if appropriate measures have not been taken to prove this (reorganisation, assigning budgets and new responsibilities, new hires…), its effective implementation will necessarily be constrained.

The only advice we can give senior executives at this stage is to know themselves, to identify their comfort zones and what makes them feel ill at ease, and to be able compensate for the latter with employees or external consultants. Otherwise, frustration is likely to be created in their teams, and tactical, opportunistic decisions will be taken that do not serve the best interests of the company as a whole but only those who take them. If you are a manager who knows you have some misgivings about new technology, or about the new transparency in customer relations for instance, it might be a good idea to consult other managers who have made different choices, to ask for real feedback on their experiences, or to consult various experts to find the one you feel most affinity with, rather than the one you have heard being talked about the most. If you are at the other end of the scale and something of a geek, you may want to subject yourself to a very facts-based control of investments made, which would balance out the over-favourable bias towards trying out every new thing that comes along, sometimes in a way that is too out of step with your customers or your company’s targets.

In any case, there is no “normal” digital strategy to follow or respect, and best practices and case studies are only there to give insight and ideas: the key to success lies in finding consistency between who we are, what we like to do and what we do do – it’s up to executives and managers to take note of their specific strengths as well as they can!

 

In conclusion, a digital strategy is developed based on the strategy of the brand or company, not by simply adding up all the different operational initiatives. To properly design the strategy and identify the right levels of decision-making, you need to ask yourself about the potential impact of the Internet first on the company’s overall activity and then on the functional areas within the company or its different brands. How positive executives feel about new technologies and their management styles will also have a qualitative impact on decisions made, on the overall success of everyone involved and on how consistent actions taken may be. Once the main strategic guidelines are set and the right leaders identified, everyone involved can then draw up the action plan for his or her specific activity. Even pure web players are not exempt from this type of analysis, which can help them put their development on the Internet into perspective compared to other media and channels that their customers use, and to move away from a way of thinking that is too “site-centric” towards a more “customer-centric” approach.

 

How to turn a digital strategy into an action plan is developed in the following article, with a focus on marketing and communication; however the same approach can be applied to other business functions. This entire series of articles is regrouped in the ebook « Building a digital strategy », available for download in PDF format on this site.

 

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