The trend of digitalization of the workplace is challenging businesses across the country to adapt quickly to meet the needs of their talent and customers. While a simple solution is to update current business technology to the latest and greatest, business leaders quickly find that it is not a sustainable practice in the long run.
Digital Transformation Threat
In fact, it is clear now that digital transformation is posing a direct threat to traditional business models and companies that take risks and adapt their businesses to the capabilities of these technologies, such as social media, mobile applications, analytics, the cloud, and IoT are the ones that succeeding in attracting and keeping talent and customers.
It may be though, that we have gone beyond digital transformation. Certainly, recent research from Gartner appears to suggest that many organizations have reached scale on digital projects and that business leaders need to focus on managing business, rather than digital goals.
Gartner' 2020 CIO Agenda, which surveyed 1,070 CIOs and senior IT leaders, found that 40% of organizations are now reporting they’re at scale for digital endeavors.
The report explains that how an organization deals — or is prepared to deal — with “turns” and disruption will dictate how that organization succeeds in the future. These turns can take the form of acquisitions, cost pressures, shifts in consumer demand or other challenges, but the reality is that unprepared organizations will sustain permanent damage.
Given that much of the reported digitalization involves optimizing existing business models and not actual digital transformation, even digital organizations are vulnerable to turns. “Turns disrupt. Enterprises that came out behind or far behind where they were before a turn were robbed of their ability to respond by the turn,” said Andy Rowsell-Jones, Vice President and Distinguished Analyst in Gartner's CIO & Executive Leadership Research team. “Unless enterprises are fit, turns deaden their ability to flex as the environment changes.”
According to recent research, email, social media, and paid ads all had a response rate of around 1% in 2018, shared Richie Pusateri, marketing associate with San Luis Obispo, Calif.based Postal.io. Mail sent to house and prospect lists in the same year saw response rates around 5-9% (5-9 times higher). Engagement provided by personalization and sensory tactics in the offline world is far more effective than anything digital channels can offer as well. Even these elements can be automated at scale with new technology.
The push to digital really comes down to attention, Matt Erickson, marketing director for Los Angeles-based National Positions told us. He believes that the lion's share of daily attention happens online in some form or another — from social to search. So, the questioning isn't really moving beyond digital but how to better use digital.
He cites the example of cloud-based marketing automation software. It can be a great tool if utilized correctly - if not, it will end up being another software stack that collects dust. “Running social media ads is a tactic that can pay dividends if the organization is willing to put the time in to test, optimize, and target efficiently. If not, it is just another hole to throw money down,” he said.
So, leaning into uncertainty really comes down to digging into whatever digital avenue you are considering and really pushing to use everything it has to offer. “Many brands try to hop on the bandwagon when something new comes out, then they try it once, decide it is not for them without really testing the waters. Whatever new trend is next, it's likely spinning off a current trend — and what you learn in the face of uncertainty will leave you better prepared for what is to come,” he added.
Execution Not Knowledge
Vern Weitzman of Cambell, Calif.-based Cira Apps pointed out that execution trumps knowledge every day of the week. This is just as true for mature digital enterprises as for the smallest start-up. Even if your product is digital, without doing market research and thinking about how to market the product, the technology may not continue to find customers. “The mistake successful organizations sometimes make is thinking, well, we’ve arrived — now we’re the big dogs on the block, we can take our foot off the marketing gas pedal. Big mistake,” he said. “The resilience you built as a growing, younger company can easily become fragility. Then you’re unprepared for new developments in consumer taste, acquisition opportunities, or other kinds of business surprises.”
The goal of all organizations should be to lean into uncertainty and come out stronger and more successful on the other side. A subset of organizations successfully navigates these turns to come out ahead.
“Fit” organizations — those that came out of a turn stronger, as defined by Gartner— outperformed “fragile” organizations in key areas. This enables fit organizations to invest and maintain profit margins, while fragile organizations shrank. What is interesting is that they all demonstrated ten qualities that are applicable to all organizations, not just digital organizations. They include:
- Clear and effective leadership
- Disciplined IT investment decisions
- Articulating a clear and consistent vision
- A clear and consistent overall business strategy
- A strong CIO and CEO relationship
- Using IT to gain competitive advantage
- Anticipating opportunities and threats *
- Being willing to take on risks for long-term growth
- Enabling the enterprise to navigate change
- Fostering and changing the culture in IT
They are elements that we have seen on numerous occasions in the past and indicated that creating a business strategy is as important, if not more important, than building a digital workplace that is founded on technology alone.