On February 12th, Yoke’s Digital Strategist Sina was part of an expert digital business panel at Pause Fest, which is the annual creative tech conference for Asia Pacific.
Prior to taking questions from the audience with her panel comrades Tony Lee of Ntegrity and Mark Cowan of Cowan, Sina set the scene for the audience by mapping out where Australian businesses currently lie in their journey to digital adoption and innovation. The picture wasn’t pretty.
If you’d prefer to listen to the talk, you can do so below.
Is your business a digital laggard, try-hard or a savvy operator?
There are three distinct groups of businesses in Australia that display varying levels of success in digital. Based on each group’s rate of digital adoption, we gave them descriptive nicknames; the laggards, the try-hards and the savvy operators.
It probably doesn’t come as a surprise that most Australian businesses fall under the laggard or try-hard labels, either ignoring digital altogether or alternatively dabbling in a few occasional digital areas, but not really knowing what they’re doing.
Out of the three groups, only the savvy operators stand out as the star pupils who have figured out how to adopt digital and actually thrive in the digital landscape.
In the following sections, we’re exploring the three groups in more detail and we’ll look at some of the key topical areas in each digital adoption phase.
The laggards a.k.a. the dead
According to a recent report by Microsoft, 67 % of Australian SMEs don’t have the right culture to drive innovation. These businesses form the largest group, a.k.a. the digital laggards, and are critically behind the adoption curve.
They don’t have the needed capabilities to get started in digital adoption and sometimes even make a conscious decision of avoiding digital completely.
Consumers have become the drivers of innovation
It’s no secret that a significantly large portion of consumers are shopping, making important decisions and interacting with others predominantly online.
In effect, consumers have become the drivers of innovation, leaving the laggards out of the race to capture the interest of the increasingly digital consumer. The laggards have failed to recognise and acknowledge the importance of this trend and, in the meantime, the smart, nimble operators that are more than comfortable navigating the digital landscape are reaping the benefits.
To get back into the race, the laggards would need to invest heavily in digital at a strategic business level and map out the journey that will lead to new chance for growth for the business.
Disrupt or be disrupted
It’s a cliché, but if a business doesn’t disrupt the marketplace, it’s more than likely that there’ll be a disruptor right around the corner ready to shake things up for everyone.
Having said that, there is no conclusive research that states being a disruptor and first-mover unequivocally spells success. Despite this, the fact remains that, in the digital space the pace of innovation and disruption is so much faster than in the non-digital environment. Because of this phenomenon, the gap between the digital innovators and laggards is growing at an incredible speed.
The problem is that many business models make it difficult to adjust to this accelerated speed, and as a consequence, there is a strong need to update 40-year old business models. Many of the models that were a success before the emergence of digital simply do not work in the current digital environment where everything moves at the speed of light.
Worship the data
Everyone’s talking about big data. But only few know how to really handle the data, let alone draw actionable directives out of it.
What makes the big data trend interesting is that despite the recent data explosion, all the hype around it, and the easy access to it, today’s businesses are actually using data tools such as Google Analytics less in decision-making compared to five years ago.
This is a worrying development because many businesses don’t necessarily understand just how metrics-driven the digital environment is. Needless to say that it would also be a lot easier to prove the value of digital incentives with a bit of help from the all-mighty data.
There really is no excuse for not basing important business and marketing decisions on cold, hard data. Using an analytics platform is not exactly difficult and business performance will be all the more robust if executives were to stop basing their decisions on guesstimates and personal opinions.
The try-hards a.k.a. the barely surviving
The second group, a.k.a. the try-hards, are businesses that understand the value digital can bring to their business, but are getting lost in the digital maze. They’re trying to survive by tinkering with a few digital initiatives, but lack the strong strategic direction so crucial for digital success.
It’s a (digital) jungle out there
It’s true that digital can seem like a large, unexplored jungle to the uninitiated. Indeed, the digital environment functions just like a real jungle; it’s a complex ecosystem where its parts are interconnected, with changes in one part having an effect on other parts of the system.
This is something that not many businesses, nor external parties consulting them, understand well enough. It’s impossible to see success in digital with a siloed approach, which is why many try-hards feel disappointed with the results they’ve seen from digital.
The situation is made more difficult by the fact that the digital service provider landscape is currently going through its ‘Wild West’ period. This means that it’s extremely difficult for a business that’s looking for a digital service provider to separate the good apples from the bad.
As the businesses themselves don’t have capable digital strategists or marketers on board that possess a holistic understanding of the digital space, they often fall victim to the fancy-sounding terms used by some external parties that don’t understand what they’re doing either.
The problem can be fixed in two ways, with the crucial point being that all digital incentives should be orchestrated by one entity. The first option would be to build the internal digital capability in a business first, after which it would be easier to identify legit external digital service providers and manage their work from a more all-encompassing point-of-view.
Alternatively, a business could engage a digital service provider that offers and understands the whole suite of digital services and give them the responsibility to act as the digital puppet master.
Most businesses fail at digital branding
The try-hards are keen to have a website up and get going with their digital marketing activities. Like with any promotional assets, this of course requires a clear understanding of the business’ brand and how to transition it into the digital landscape.
Surprisingly many businesses and even branding agencies don’t possess an understanding of how to use their brand in the digital environment correctly, or simply overlook the entire issue. For example, there is a plethora of websites out there owned by businesses with sophisticated, highly regarded brands, but the use of their brand in the digital space is often lacking. This strips away the prestige of the original brand.
Because the try-hards know the value of a digital presence, they should also ensure that their brand works in digital. The creation of digital assets should be executed by consulting the current brand guidelines and ensuring the digital execution doesn’t de-value the brand.
You have to be hungry
Knowledge is power in digital. The more you know, the better equipped you are to anticipate and navigate the latest trends in the digital sphere. This is one of the major stumbling blocks for many try-hards, as they rely on external parties to possess the necessary digital knowledge and execute the digital incentives.
Going back to the example of a digital jungle, a business will stand a better chance of successfully navigating the digital maze of trees, vines and bushes, while avoiding predators, if it has acquired enough knowledge of the ecosystem.
Businesses need to be hungry for new knowledge and keep learning if success is what they’re after. Locating the best source for knowledge is often difficult though, as many larger educational institutions are behind in their curriculum when it comes to all things digital.
Due to the rapid rate of change, it is understandable that universities have a hard time keeping up. Still, the situation is not hopeless for those who wish to take a formal course on digital subjects; there is a recent trend in education that has witnessed the emergence of smaller, more agile educational institutions meeting the needs of digital-hungry students.
The savvy operators a.k.a. the thriving
As the last, and the only successful group of businesses in digital, these are the savvy operators. These businesses are flexible enough to incorporate digital into their organisations and make the needed changes to internal structures as required. They got their business model right and they rely heavily on data when making important decisions.
Go back 3 spaces
The savvy operators aren’t scared of making major changes in their internal structures to accommodate digital. This may often mean that a business needs to go back to the beginning and re-evaluating their business model.
There are multiple business models that work well in the digital space, with a few examples being utility-based businesses, brokerages and merchants.
Robust strategy + right technology = innovation success
Data hasn’t just exploded in the world of consumer behaviour; also internal data within businesses has seen a major increase in volume. Many are surely familiar with an overflowing email box or illogical filing systems that make work efficiency sometimes impossible.
The savvy operators have truly made digital the backbone of their businesses by utilising sophisticated information management systems to streamline the communication flow within their business and to improve efficiencies.
In fact, the importance of such systems have become so pronounced that there is a growing need for external parties that specialise in building change management frameworks and managing internal change.
Look at the right metrics to determine success
The savvy operators use data to drive their decision-making. There are many businesses outside the savvy operators’ group that claim to do the same, but fail to experience success in digital. The difference between these two groups of businesses lies in the language they use to evaluate success.
Many business executives and digital service providers concentrate on metrics that don’t resonate with CEOs or board members. Metrics such as ‘decrease in cost-per-clicks’ or ‘bounce rates’ tell nothing how digital is actually affecting the business’ bottom line.
Instead, metrics concentrating on average customer value, revenue and number of customers are terms that CEOs care about. The savvy operators have aligned their language with those of the CEOs and are consequently able to show value of digital to the entire business.
Digital adoption is not fast, but if done right, it can bring some unprecedented success to a business that’s genuinely wiling to embrace it wholeheartedly.
If you’d like to download the Pause Fest presentation slides, you can do so via this link. Alternatively, if you’d prefer to watch a recorded broadcast of Sina giving her talk on Periscope prior to Pause Fest, click here.