Bet big on digital acceleration
The other day, I was going through some background research for a client. What struck me, as I waded through the reams of PowerPoint decks and research reports, what how integral digital was to the core functions of this particular industry. Whether it was key influencers in the purchase decision, reasons for doing business with a company or competitive differentiators, technological proficiency was right up there with traditional factors like price, value, convenience and reliability. As potential customers, we expect companies to have their digital acts together. More than this, it appears we’re ready to reward companies that aggressively invest in raising the bar of their own connected maturity level.
Why, then, are companies so loathe to place significant bets on their own digital future? I deal with big companies all the time, and when it comes to investing in their own websites, online marketing, web support platforms and other planks in their digital platform, they seem to prefer hedging their bets, squeezing out miserly budgets at a level that would make Ebenezer Scrooge seem hopelessly profligate. None of them are looking at it as a way to distance themselves from the competition. Instead, it seems that they prefer the security of the herd, nervously watching the pack for signs of movement and only investing when they feel they have to to avoid being trampled by a stampede. It’s Geoffrey Moore’s classic Crossing the Chasm behavioral pattern, writ large.
This isn’t the first time this has happened. The same thing took play about 100 years ago, as Industrial America embraced electrical power. The entrenched manufacturers had all invested heavily in steam power. Despite the obvious benefits that electricity offered (cleaner, safer, more efficient factories) they never did fully embrace it, jury rigging factories and doing ad hoc retrofits, stranding themselves in a competitive no-man’s land between electricity and steam. New competitors built new factories that maximized the advantages, and the old guard never recovered. In a decade, most of them were gone. Economists refer to it as a regime transition. In hindsight, it seems hedging your bet when it comes to new technology is not really “playing it safe.”
To me, it seems obvious we’re in exactly the same place. History is repeating itself. If these companies look at their own research, it’s easy to see the signs. Yet, research tends to be digested in context, and often people see what they want to see in it. What’s potentially worse, they fail to see what they don’t want to see. What makes this even more frustrating is to realize that the cost of making a significant, best-in-class investment in accelerating digital maturity is relatively minimal, perhaps even infinitesimal; given the other operating costs these companies are carrying.
When it comes to digital maturity, I find the real acid test is how effective companies are at connecting with their customers, both present and future, through online channels. Is the website truly effective? Do they have good search visibility? Have they found a way to play in social that recognizes the importance of authenticity and the forging of true relationships? Do they understand how their customers might use a mobile device to connect with them? If a company can do these things right, chances are they’re well advanced in the digital maturity model.
The other thing to look for is how the company is using digital technology to reinvent the traditional ways it does business, especially when it comes to handling relationships with real people. I find sales to be one of the last bastions of “we’ve always done it this way” thinking. If a company is seriously considering how to make its sales force more effective by leveraging digital channels, it’s a good sign for the future.
In my opinion, betting the farm on digital maturity seems to be a no-brainer, especially when, in terms of real dollars and cents, it’s a relatively small farm we’re talking about here.