"A word that can mean anything has lost its bite."
– Richard Rumelt, "Good Strategy, Bad Strategy"
Throw a rock online these days and you’re likely to hit someone talking about some flavor of digital strategy: Web strategy, social media strategy, mobile strategy, content strategy, search strategy, hottest-topic-of-the-month strategy. You name it, and someone is writing about it, strategically. A lot of smart and experienced people are sharing good ideas on any digital topic you can imagine, often claiming to provide the strategic keys to the digital kingdom of success…But are they really talking about strategy? And if they are, how can you separate the wheat from the chaff?
Digital strategy defined
Richard Rumelt argues quite convincingly in his book Good Strategy, Bad Strategy that the concept of strategy has been "stretched to a gauzy thinness as pundits attach it to everything from utopian visions to rules for matching your tie with your shirt." He goes on to provide ways in which people in the business world have conflated strategy with vision and ambition and mission statements to the point where anything smacking of motivational speaking sounds like a strategy.
Digital strategy is no different, and we should extend his definition of strategy to encompass what’s important for business in the online world – its digital ecosystem. With these two ideas as foundation, here’s a proposed definition for digital strategy:
Digital Strategy: A coherent set of analyses, concepts and actions within a company’s digital ecosystem that respond to an important business challenge.
The hallmarks of a bad digital strategy
Rumelt enumerates four basic hallmarks of bad strategy, all of which apply to the digital arena (see Rumelt’s article The perils of bad strategy for more detail):
- Failure to face the problem
- Mistaking goals for strategy
- Bad strategic objectives
- Buzzwordy fluff
Bad digital strategy adds at least three hallmarks (and maybe more):
- Overemphasizing specific technologies: The digital landscape is constantly evolving, and technologies come and go. Pinning a strategy on a specific technology or platform or device (e.g., Java or Friendster or iPhones) is risky and short-sighted. Strategy should be based on broader digital trends.
- Living in the past: The Internet has transformed the world of communication and human interaction, and has opened up an array of new ways to deliver products and services; the way we consume has changed in concert. The old rules of pushing products and messages to an unaware and disconnected marketplace do not apply.
- Complacency: The pace of change in the digital world is staggering. Disruption can come from anywhere at any time; you don’t always know who your competition is. Businesses, even large established ones, should be wary and not assume their position is secure. Even titans can fall like dominoes in the new world, and digital strategies should recognize this potential.
Good digital strategy avoids all of these pitfalls. It rests on the fungible foundation of our new digital reality, where things can change in a heartbeat, new competitors can come from nowhere, and the old rules of business don’t always apply.
Good digital strategy identifies the real challenges
The first step to formulating a sound digital strategy is to identify the real challenges faced by businesses in the Internet era (i.e., facing the problem). Increasing revenue and reducing cost are the de facto goals of any business; the real problem lies in recognizing the digital trends that impact these overarching goals. Here are a few examples of challenges that I see businesses facing in this new world:
- Established industries are seeing structural changes in their business driven by digital technologies and the behaviors they foster (e.g., newspaper and magazine publishers)
- Companies were not engineered to connect with customers in a meaningful way, but social media and new modes of communication are forcing them to adapt or suffer the consequences
- The hierarchical model of many organizations is broken, especially when it comes to interacting with customers
- People have a new set of expectations about how companies conduct business
Develop a systemic digital strategy
Once the real challenges have been identified, a coherent approach to addressing these challenges can be created (i.e., the actual digital strategy), and a plan of action can be put in place in a way that (hopefully) provides competitive advantage. This approach should be systemic in the sense that it takes into account the touchpoints within a company’s digital ecosystem, and develops actions across those touchpoints. Actions within this system should act to reinforce one another in positive ways; actions limited to single touchpoints fail to harness the potential inherent in the hyperconnected digital world.
For example, an e-commerce company that wants to go to market with a new product needs to think beyond its web site and other digital points-of-sale. It also needs to consider how social platforms (e.g., Facebook and Twitter), and the word-of-mouth marketing they foster, might spread the news about its new product more effectively. It needs to think about augmenting the way it does customer service, anticipating an increase in support requests once the new product launches, and being able to respond across channels. Nothing happens in isolation in the digital world; things are more connected than ever, and good strategies recognize these connections and exploit them.
Adapt or die
The days are long gone when one could lay down a strategy, breath a sigh of relief, and then walk away for two years. Everything changes. Six months after rolling out a shiny new approach to some key business challenge, some punk in a garage in Brooklyn might build a great new service that disrupts the master plan. Companies need to be alert and responsive to these kinds of changes. This is the way of things with digital strategy: constantly adjusting to the shifting sands of technologies and products and services in the digital ecosystem (see my post on Designing for Change for additional thoughts).
Good digital strategy is a coherent and systemic approach to solving one or more business problems in a company’s digital ecosystem. It avoids the pitfalls of bad strategy, which conflate goals and vision and tactics with a cohesive plan to get things done right. It avoids focusing on specific technologies, recognizes the digital present is different from the past, and eschews complacency in favor of action and adaptation. It evolves on a digital business timescale, and understands deeply that many of the old rules of one-way business and push marketing simply do not apply any more.