Why organizations fail at digital

With many years successfully leading digital or coaching others as they led such, I have often been asked what it takes to succeed at digital. And on occasion I will answer that question straight away. More often, I will answer that question with a twist, I share why organizations fail at digital. So here are twelve ways to fail. Success requires executing rightly on all these, failure can arise by simply failing on any one of these. Pretty scary – huh??

You underappreciated the opportunities (to differentiate))

The earliest commercial entrees into digital were businesses standing information only websites. They wanted to get their brands exposed onto the world wide web. The second step was enabling commerce, the ability to not simply shop, but also buy, pay, and arrange shipment of their products. The next step (and one often missed - see my earlier post titled?Every business is a digital business) is to leverage digital to provide customer service and support. And more recently we have seen the rise of digitally enabled products and services – think IOT. When you stop too early in exploiting digital for all it can enable, you set yourself up for failure. Why, because someone else won’t stop and they will out differentiate you. And they’ll find ways to drive down cost, manage marketing mix, optimize price, maximize profitability, foster customer loyalty and these tea leaves are an easy read.

You forgot who pays the bills

So, who does pay your bills? Who are your customers? And who are your customers tomorrow? Three simple questions upon which racks of books have been written. The fastest way to fail at digital is to enable products, services, and experiences for whom there are no customers. Or to develop and deliver digital experiences that fail to resonate with your customers. We are at a moment in history where we have multiple generations engaging online – The Silent Generation, Baby Boomers, Gen X, Gen Y (the Millennials) and even Gen Z has now arrived. Each one of these has a different technology acuity and set of engagement expectations. My advice, understand who you want to serve and stop trying to serve everyone with singular set of products, services, and experiences. The fin techs are eating the financial services industry alive doing the latter.

You got what you measured

The adage, you get what you measure, is even more relevant in the digital world than in the physical world. What are you measuring? Firstly, yes, you should be measuring your business in financial terms, investors demand it. What are your revenues, gross margin, SG&A, EBITDA, etc. I’m not suggesting you stop measuring these. But these shouldn’t be all you measure. You need a well-balanced scorecard that includes such things as customer satisfaction, employee satisfaction, your DE&I, your carbon footprint, product quality, all aspects of your supply-chain performance, brand recognition (better stop now before I fill the page) - if it’s one thing we know how to teach in B-School it’s how to invent measures until we’re measuring everything and therefore your teams no longer really know what is important. My point is, measure digital! Measure portal usage, measure how many unique and return visitors to your sites, visits to pages on your sites, to widgets on your pages on your sites, abandon rates, conversion rates, latency, satisfaction with your experiences, optimal purchase paths, AB Test, Multivariate Test (better stop now before I fill the page). Pick a few, understand them and action on what you learn from them. Learning is the objective. If you don’t measure, learn and action, you won’t improve. And if you don’t improve, your customers will improve their experiences by going somewhere else.

You disenfranchised your field organization

This is a tricky topic and has held so many organizations from making the leap into digital. Last year I met with a billion dollar B2B enterprise and the Chief Human Resource Officer told me they needed to go digital because the pandemic was taking a toll on the staffing in their bricks and mortar operations and the Chief Revenue Officer said to me, he didn’t see the need to offer his products and services online, his was a relationship business, people actually wanted to call his sales reps to place their orders. And the CIO was frustrated as his top priority was replacing old minicomputers (IBM Series 1) running their supply chain. (Should I confess I know what a Series 1 is and that I at one time could write RPG). I’m not making this up. These were real conversations. This company had recently been taken private. If the old guard wasn’t going to take this firm into digital, the private equity firm was – starting with the management. It’s not a matter of if, only a matter of when and when is now. The challenge – an OCM challenge – is bringing your field operations along with you. Helping them appreciate what digital means for the business and for their individual bottom line and enabling experiences that make them exceedingly more productive. When nonvalue added conversations are obviated with digital, then your field teams can focus on what’s important – helping clients solve problems, not simply taking orders or processing payments. And the tricky part – what if your field reps got just as much credit for an order placed online for an account in their territory as if they had taken the order themselves. I’ve met all too many sales and finance leaders who think otherwise and eventually wonder why they have developed an attrition problem among their sales ranks.

You put a better price online

I smile when I find a better price online than I could get calling a sales rep. I simply call and ask them to beat it and they do. They have numbers to make (and always a measure of discretion). And soon, and in response to the “new” pricing, the online price gets even better and so the spiral begins. The behavior that was intended – get me to place my order online, resulted in a phone call. The objective is not to put a better price online, it is to put your best price online with best meaning, match what I could or would get if I called and is reflected in my contract in the case of B2B. When I know my online price matches what I would get if I called and matches the price I pre-negotiated (again in the case of B2B), I’ll order online because it’s more convenient.

You got hacked

Cybersecurity is probably the hottest topic in the digital anything today. Your customers want and need to believe that information they share with you is private, safe, and secure. So, make the investments to assure it is. Or they will run away so fast it will make your head spin. Of course, the response so many corporations have taken especially in the dealing with the issue when their lack of investment has failed them, is to assure you it won’t happen again, invest in what they should have in the first place, fire a couple of executives, hire some cybersecurity consultants, create a CISO role (if they didn’t already have one and they got fired) and give you free credit monitoring for a year or two. Realizing how powerless individual consumers are in this battle for privacy, governments are getting engaged and making it financially painful for companies who fail to properly protect their client’s information.

You let your content atrophy

Take my challenge and go visit a dozen or so web sites and check the copyrights on those sites. If the copyright is 2020 or earlier (meaning the company is not paying attention), then how can you trust that the content on their website is current and accurate. Or visit a site’s blog postings. When was the last post, three months ago, six months ago? Same with press releases. Amazing to me that executives would allow their content to atrophy, as it raises suspicion about the accuracy of even other content on their sites. If you’re going to enable blogging or posting news releases or financial statements, keep them current. Even more importantly, refresh your product pictures and descriptions and pricing etc. And, this does mean that when you put these digital experiences into place that you should engineer for easy update (buy and implement a Content Management System), and the processes to assure your content is kept fresh. I’ve often been quoted as saying, most organizations don’t wake up in the morning and say, let’s go out and buy a CMS, but they should. Visitors and customers who question the integrity of your content will go elsewhere.

Your digital experiences timed out

How often do you experience a website that seemingly takes forever to load or a page within a site that either fails to load (can’t find the page) or is itself sooooooo slow to load. You can’t build and hold your digital properties together with string and bailing wire or power them by hamsters in cages running on exercise wheels. You really do need to invest in infrastructure to assure your digital experiences are fast and always available. Again, it's all too easy for your customers and prospects to simply go somewhere else.?

A second piece of advice, assure your backend systems are also fast, real time (or very near real-time), and well-integrated. Another quote of mine – the fastest way to show the whole world, yes, the whole wide world, how crummy (I use a different word when I present versus write) your backend support systems are is to go digital. The internet is essentially ubiquitous and so are your experiences – good or bad – so the whole world gets to experience them.

You couldn’t be found

In bricks and mortar retail, you’ve heard it said, it’s all about location, location, location. This adage makes so much sense. Are you positioned on a customer’s commute to or from work? Or, are you a short drive (or maybe walk) from home or office? In the digital world, it’s called the worldwide web for a reason, or it could have easily been called the worldwide maze. There is no equivalent to the evening commute home where you pick up dinner on the way. When it comes to digital, it is all about search, search, email, portal, partner, search. In other words, it’s mostly about search. And understanding this, it’s in turn all about search engine optimization – SEO (your site, brand, products are found organically) and search engine marketing – SEM (buying search terms – your products are found inorganically). So, if you want to fail, don’t invest in either or both. Failing to do so, and your prospects / customers won’t find you when they go looking. And believing that you will be found by your brand terms alone without investing in buying these terms, is a huge mistake. Your competitors can and will buy your brand terms and disintermediate you.

You looked long or you looked short

Another way to fail at digital, is to invest short or long and not both. Investing short means investing in evolution – changing your experiences a little at a time. You should certainly do this. But, you also need to look long. Investing long I would characterize as revolution, looking at blowing up your experience and putting them back together. In the latter, it means challenging yourself to completely reimagine your then digital experiences. Many if not most of the disruptive experiences that have arisen in recent years are the result of small teams backed by venture capital that reimagine and reinvent rather than evolve legacy experiences.

You were complacent

In the spirit of the last paragraph, you need to admit (or you should because failing to do so is a set up to fail) that you do not have a monopoly on smarts and that fast following is even faster in the digital world. In other words, presuming that you have innovated some differentiable experience and much like a patent, you’ll be protected for seventeen years, is a huge mistake. First into a market or first delivering an interesting experience used to mean a competitive advantage at least for some defined timeframe. However, fast following has almost always meant you didn’t have to pioneer the opportunity and bear the costs associated with developing and introducing the experience. In no more than a metaphoric blink of an eye, your competition will match you or out innovate you. The Bobism: a handful of smart kids, a website, some supplier relationships (and worse case a warehouse halfway between Memphis, TN and Louisville, KY) and you’re in trouble. Did you get the latter – worse case and if so, why that location????

You forgot the golden rule of digital

The Golden Rule of Digital (as coined by yours truly – there are variations on this offered by others) reads:

While technology isn’t necessarily easy, it is the easiest, delivering the right client, customer, citizen, student, faculty, employee, investor, board member, regulator experience is harder, and managing the organizational implications is the hardest of all. Or said a little differently, It’s not only about legacy systems, or legacy experiences, it’s also about legacy mindset. You can modernize your back-end systems, take them to the cloud, reimagine and deliver an engaging commerce experience, but if you don’t change how you think, how you act, how you measure, how you decision, how you hire, digital will not stick. It will be a necessary evil, you’ll manage it that way, invest in that way, and miserably fail.

This was a long post but answering the question “what does it take to succeed at digital”, or “why do organizations fail at digital” is simply not a short answer.