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Why digital transformation is not as daunting as you think it is

When Marketing magazine set out to ask marketers what they thought the future of marketing would be, we knew certain themes would stand out – social media, mobile marketing, e-commerce, integration, and so on.

Certain trends will only strengthen going forward. Procurement will become more important, the pressures on marketing ROI will continue to grow, digital talent will not just remain in the confines of the marketing department, marketing will have to be a lot more collaborative and the CEO’s mandate will be to steer the company towards being more and more consumer-centric as opposed to product centric.

Underneath all the chaos is one common thread – digital transformation, a process which is taking place at varying pace across organisations. While some companies have attained a certain level of maturity when it comes to digital, others are just dipping their toes in this new era which is redefining the way business is done.

A recent Forrester study found that while 74% of business executives say their company has a digital strategy, only 15% believe their company has the skills and capabilities to execute on that strategy. Business leaders don’t think of digital as central to their business because in the past, it hasn’t been.

“A piecemeal strategy of bolting on digital channels or methods is no longer sufficient. Instead, you must think of your company as part of a dynamic ecosystem of value that connects digital resources inside and outside the company as needed to compete,” the study said.

Digital technologies can help companies deliver a “superior customer experience and drive the agility and operational efficiency they need to stay competitive”.

Taru Jain, founder of Maxential, is a coach and consultant to senior decision-makers on digital transformation. He echoes what the study above says about the need to dig deeper to truly embrace digital across the entire organisation.

There are many moving parts when it comes to digital; and that confounds companies. Based on his experience of helping many organisations on their digital transformation path, Taru has created a framework he calls SPARCS.

“My thinking behind SPARCS is to help leaders understand that they need to ignite transformation, spark a change on multiple dimensions to confidently take their businesses forward in an increasingly digital world,” he says. SPARCS stands for:

  • Structure
  • People
  • Ambition
  • Revenue mix
  • Culture
  • Systems

“To understand the true impact of digital change you need to evaluate it holistically, and not just as a marketing channel,” he says. Quite literally, this means reorganising the way businesses operate, but that’s not necessarily as daunting as it sounds.

Forget big rocks, use the “small” snowball effect

Often executives hide behind the fact they are not empowered to change the structure of the entire business. Jain argues otherwise. While some of their concerns may be legit, big organisational changes can start at a very micro level, within the sphere of influence of managers.

However, this requires a cultural shift. Take marketing for example. Marketing needs to work closely with sales and IT now more than ever before. Involving the sales team early on in the planning process of an initiative is an example of change that can happen without needing any approval.

One marketing team simply started requesting someone from sales to come along to the monthly marketing campaign planning meetings to provide a practical perspective on consumer insights. Within 2 months, the collaboration led to some key changes in the way valuable CRM data was obtained – and led to a measurable lift in the next campaign’s performance. That’s the sort of change, he is speaking about.

“You are empowered to make the change. Don’t wait for a sea change in structure,” he says. Reach out and be more collaborative. Digital does not respect departments; it forces you to cut across them.

Let’s take another example from the marketing department – campaign thinking, Jain explains. Brands as well as their agencies are fixated on that one big idea. They spend months trying to make that big idea happen, through research and multiple rounds of checking, and then they launch it. Liken it to throwing that big rock down the hill. And then they turn their backs on it, working on the next “big rock” idea.

Both clients and agencies will only get to know about what that big rock has done perhaps a month (if not more) later when some research results on the campaign’s effectiveness are out.

“That’s traditional, old school thinking,” he says.

As opposed to that, digital as he explains, enables brands to think in terms of small snowballs – small ideas – which can be tested, observed and learnt from. This also takes care of the budget – an oft-lamented issue of marketers.

Here’s a solution, according to Jain. This approach to digital allows marketers to ask for small budgets to work with at regular intervals as opposed to asking for a hefty sum which the top management is generally reluctant to approve.

He proposes the fairly popular 70-20-10 investment strategy; invest 70% in what you know works for your brand, 20% on what’s new in the market and you feel could be right; and 10% on something more experimental. And companies can flex these three buckets according to their needs as every organisation’s DNA is different.

“But having these three buckets is in itself a mindset change,” he says.

“If people ask you to put a million dollars in the third bucket straightaway, it’s risky. You don’t want to be part of risk. No leader wants to take big risk with unknown rewards; but they all want to be seen as investors in innovation. Appeal to this side of them.”

So through the course of the year, if I ask you for just $50,000 10 times – and you learn how it’s spent and you keep learning from the results, you will be more willing to spend, he explains.

That’s when you are investing in innovation and not risking money. It’s a different mindset.

Nothing wrong in being traditional

There is a just reason why companies find it difficult to transform. It took 81 years for cinema to reach a billion people; radio took 53 and TV 48 but social media only 4 years. What’s the marketing implication of this? The marketing implication for this is that people have had 48 years of know-how, trial-error, and benchmarks for TV and, hence, there is much comfort in their usage by brands.

“But it took 13 years for the web, since Tim Berners-Lee invented it, and it took only four years for what we are calling Web 2.0, to reach one billion consumers around the world,” he says, adding that just like a typical human being, when faced with change at such a speed, companies freeze into inaction.

“One of my biggest messages to all leaders is, guys, if you feel like you are frozen into inaction, it is a perfectly natural feeling,” he says.

“If you feel comfortable with traditional methods of marketing, it’s for a reason because you have lots of years of comfort doing this; several attributable points of success. And it’s OK to stay in that comfort, as long as you are knowingly signing up to the reality that you can’t live tomorrow in it.”

And there are bound to be mistakes and learnings on the way. As opposed to jumping to the conclusion that digital does not work for us, companies will have to take those mistakes in their stride and continue to be open-minded, adaptive and nimble in their quest of being a consumer-centric company. As he says:

The roadblocks are essentially just speed bumps – it shouldn’t halt the journey digital transformation is.

Marketing’s special edition The Futurist will be out soon. In the edition you will find what marketers think will be crucial for their jobs in the coming year. Stay tuned!

 

 

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