Digital Ecosystems – Part 3: How businesses can close the theory-practice gap

There’s a big gap between theory and practice when it
comes to digital ecosystems, and what it takes to make them a reality for a business. By following the guiding principles below, companies can bridge the gap more easily, and make their digital ecosystems successful.

"In theory, there’s no difference between theory and practice. In practice, there is."   – Yogi Berra

It’s clear that digital ecosystems offer benefits for businesses, but it’s not all wine and roses. It takes effort to design and maintain these ecosystems, which is why many businesses wind up with a more fragmented approach to their online (and offline) activities. After all, a bunch of people randomly doing their own thing is a lot easier than trying to get them to play a symphony.

So what does it take for businesses to move beyond this siloed approach, to operationally deliver on the promise of digital ecosystems?

1. Shift the organizational mindset to systems thinking

The most critical thing any organization needs to support digital ecosystems is the right mindset, one that recognizes the value of thinking about digital activities holistically. Executives need to get it. Business unit leads and product managers need to get it. Customer service needs to get it. The organization as a whole needs to understand the way the dots are connected online (and offline), and that individual efforts in different areas all act towards the company’s greater purpose. Mindset shifts like this can only happen if there’s an internal evangelist who has the ears of the right people (ideally in the C-suite and at the product management level). Without an evangelist, or at least someone trying to lead the charge, it’s unlikely old mindsets will change.

2. Develop objectives and a strategy, then execute

"Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat."  – Sun Tzu

"Ready, Fire, Aim" won’t work if a company wants to be a player in the world of digital ecosystems. The "perpetual Beta" mindset applies in the sense that ecosystems are constantly evolving, but some objectives and a little planning aren’t an option. Companies have to identify their objectives and a plan to reach them.

Objectives answer the question, "What are we trying to accomplish with our digital ecosystem, and how does that support our overall purpose as a business?" Once objectives are in place, a digital strategy lays out the plan for achieving them. In the context of digital ecosystems, a solid strategy needs to address many issues, from experience design to operations. Here are just a few questions a good strategy might cover:

  • What’s the plan for the way digital touchpoints connect to and reinforce one another (e.g., linkage, promotions, shared content)?
  • Should user experience be unified across touchpoints, or are there other branding requirements that require things to be more unique?
  • How will CRM systems and customer service and community managers work together to deliver great end-to-end customer experience?
  • How will investment be divided between the different pieces of the digital pie?

3. Build the right team

Digital ecosystems go beyond the basic company web site, which means building teams that go beyond what got businesses by in the .com era. Once things move into mobile and social, and who knows where beyond, companies need to start thinking about adding new competencies to their teams (e.g., community managers, cross-functional business analysts). Without the right team, any business’ digital ecosystem is destined for oblivion.

The worst thing I’ve seen, and unfortunately I’ve seen it a lot, is when companies try to use their existing teams to extend further into the digital world. Imagine a senior executive looking at a resource shortfall, while still trying to expand company presence on Facebook: "The web guy? Oh yeah, he can manage the Facebook page, too. It’s pretty much the same thing, right?" Wrong. It’s not the same thing. Get the right people for the right job. If you’re going to have extensive public-facing interaction on Facebook or Twitter or other social platforms, or have robust customer feedback on your site, hire a community manager.

4. Foster communication and collaboration between teams

A holistic approach to digital activities means more collaboration, and the nature of this collaboration is inextricably linked with organizational structure. Based on my experience, companies usually pursue hierarchical structures that follow a “matrixed” approach:

  1. Product lines (or business units): It makes sense to break things down by logically related products, which then have teams devoted to the success of those products. These teams contain people with the right functional expertise to deliver the product or service (e.g., product design, product marketing, engineering).
  2. Cross-functional needs: For some companies, needs will cross lines of business and products (e.g., technology platforms, global marketing, customer support). This often leads to the creation of teams that address these needs for the entire organization, in some cases acting as internal service bureaus (e.g., an internal experience design team charged with helping all product teams when it comes to UI work).
  3. Regions: Geography adds one more layer to the structural picture. Whether it crosses regions within a country, or spans multiple regions and countries around the globe, sometimes companies break things down to allow for regional levels of control.

Of course, the product-focused element of structure is what leads to the siloed thinking that exists today; people keep attention on their product, and don’t need to concern themselves with anything else. While this may lead to completely awesome individual products or services, it misses the broader opportunity for one product or service to ring the cash register for another. In other words, if the different lines of business are marching only to the beat of their own drum, it’s difficult to get in step with the broader objectives and strategy and reap the benefits of digital ecosystems. It’s just a noisy mess.

Better communication, and possibly even collaboration, between different internal teams (across business units, regions, or even areas of expertise) can do several things:

  • Get everyone with the program: It’s easier to align with broader company objectives and strategy when teams can see how others are doing it. It’s also easier to identify situations where misalignment exists.
  • Reduce the effort for design and engineering teams: Wheel reinvention to some degree can be avoided if teams can share common experience design patterns and technologies (especially platforms). If different teams don’t know what they’re each doing, this kind of sharing isn’t possible. The best example of this is when technology teams are making large-scale platform decisions, which can eat significant time and money. If two different teams go through similar exercises to pick technology platforms (e.g., for content management), then choose different ones, it makes sharing content between their platforms difficult, if not impossible.
  • Make people happier: When people communicate, and are aligned with a common set of objectives, they have a greater sense of shared purpose. This probably fosters more positive attitudes between internal groups, which helps the health of the organization, as well as its digital ecosystem. Happy people, happy company, better bottom line.

5. Designate an empowered owner for the ecosystem

Given the discussion above about the benefits of increased communication and coordination, it’s pretty easy to see that it would help to have an individual charged with overseeing all aspects of a company’s digital ecosystem. "Digital ecosystem Czar" probably goes a bit too far, but you get the idea. If it’s not an individual, companies could create a "digital touchpoint council" to make sure people are talking and collaborating, that everyone is pointed in the same direction as the ship, and that the ecosystem remains healthy.

6. Incentivize based on collective, not individual, performance

Several years ago, I worked with a large technology company engaged in efforts to unify the experience design across many of their products and services. Some people saw the benefit of systems thinking and were trying to make it a reality. Over time, the hundreds of experiences across their devices had become so fragmented that they were basically incoherent. This was damaging the brand, making life hard for customers, and causing massive duplication of effort at the design and engineering level. Why had this situation come to pass? Part of it was a lack of communication between different business units (see the discussion about communication and collaboration above). The other big part of it was related to incentive: the leads of individual business units were being incentivized based on their unit’s profit or loss. That meant they did whatever they could to maximize their own profit, even if it meant cannibalizing the profits of the other business units. While some competition is healthy, this was destructive; people were pitted against each other inside their own company, and it became a bloody profit battleground.

In order for a digital ecosystem to be healthy, people need to get with the bigger program. If they’re not incentivized based on how they help the company as a whole, then it’s all about me and forget about the rest. This is not to say that collectively focused incentives are easy to implement; they come with their own challenges (e.g., freeloaders who reap the benefits of others cranking stuff out and driving company success). Even so, companies have to go beyond an individual incentive model.

7. Create the right technology infrastructure

Technology is an enabler for digital ecosystems. It’s the engine that drives and supports various digital touchpoints, and it’s critical to their success. Platforms should be selected in a way that they enable content and data sharing between different touchpoints, or at least don’t preclude it. Things should be implemented for both scalability and maximum reuse, and should support easy data access through well-documented interfaces (i.e., APIs). They should also support publishing of content to multiple devices, and ideally in multiple languages.

A failure to pick the right technology platforms can lead to all sorts of headaches. As an example, I did some work with a large manufacturer that was trying to integrate several disparate user experiences and share product data across several web sites. Unfortunately, because of a lack of communication and competing internal priorities, their different teams had chosen (or built) incompatible platforms, which made sharing product data very challenging. Their respective systems were hard to use, heavily customized, and inflexible, and it had gotten to the point where they didn’t even really want to talk to each other. As a result, their user experience and brand were suffering, and they were engaged in a massive (and costly) internal effort to either stabilize on a single platform, or at least get platforms that were interoperable.

A few complaints that I’ve heard when it comes to trying to establish a common technology infrastructure include:

  • "We’ve got really unique requirements. Our users are totally different from yours, so we need a completely different system."
  • "It would take us months to switch platforms, and we’ve got to keep product flowing."
  • "As long as we’re still making lots of money, who cares if it works well?"

At the end of the day, these are all just excuses, most of them driven either by laziness or corporate parochialism. Bad technology decisions have a huge cost, both to the company and to their customers, and people need to see through the jargon-ridden smokescreen many engineers lay down in trying to avoid doing the right thing from a digital ecosystems perspective.

8. Measure, measure, measure

Analytics are another key aspect of operational success for digital ecosystems. Clear measurements and metrics (relative to a well-established baseline) help inform whether or not a company’s touchpoints are working as desired. And a good analytics program means more than search-engine optimization (SEO). It means gathering usage and behavioral data at the different touchpoints in the system, analyzing it, and then tying it back to overarching objectives. Here are a few questions a good approach to analytics would be able to answer:

  • How much traffic is flowing between different digital touchpoints?
  • Is the conversion rate different from people coming in from search engines or another touchpoint?
  • Is the money you’re spending to maintain your social media presences justified?
  • How should you change different aspects of your user experiences to increase customer satisfaction?
  • Are your customers satisfied?

9. Embrace mistakes, learn and evolve

No company is perfect, nor is any user experience or web site or mobile application. Mistakes will be made in the world of digital ecosystems, and it’s important for businesses to recognize the need to learn from them and evolve (and to just make them in the first place). Evolution requires designing systems for change, which is a deep enough topic to merit a discussion all by itself. I’ll explore the topic of designing for change in my next post on the world of digital ecosystems.

Other posts in this series:

This entry was posted in Strategy, Web stuff. Bookmark the permalink.