Research shows you need a digital strategy

A new study shows the value of a digital strategy in driving digital transformation.

I have previously argued that, today, you need a digital strategy for two main reasons:

  1. Digital opportunities are new and evolving. Your business strategy has probably not adequately explored the possibilities.

  2. Digital transformation and excellence require long-term planning, integrated thinking and cultural change.

The findings of the recent MIT Sloan Management Review and Deloitte’s 2015 global study of digital business, "Strategy, Not Technology Drives Digital Transformation: Becoming a Digitally Mature Enterprise", seem to strongly support the case for developing a digital strategy.

Based on a survey of more than 4,800 executives and managers, the report explores attitudes and actions in companies at different points on the scale of digital maturity. To assess "digital maturity", the researchers asked respondents to rate their company on a scale of 1 to 10 against an ideal organisation transformed by digital technologies and capabilities. They then segmented companies into three groups: "early" (1-3), "developing" (4-6) and "maturing" (7-10).

A headline finding was that the digitally maturing companies were more than five times more likely to have a clear digital strategy than the digitally immature companies. Only 15% of respondents from companies at the early stages said that their organisations had a clear and coherent digital strategy, compared to 81% in the "digitally maturing" group.

The researchers also asked people what was the biggest barrier to digital maturity. Over 50% respondents from early-stage organisations said that "lack of a digital strategy" was the biggest barrier. As companies move up the maturity curve, "competing priorities" and "concerns over digital security" become the primary obstacles.

But, still, do you need a digital strategy?

Not everyone agrees that you need a digital strategy. In a post on TechCrunch earlier this year, Tom Goodwin, Senior VP of Strategy and Innovation at Havas Media, argued that "You Don’t Need A Digital Strategy, You Need A Digitally Transformed Company". For Tom, digital is a given. It's so much a part of modern life and business that he argues: “We don't have electrical advertising agencies or have electricity strategists or heads of electricity, It's just a given that everyone gets it. So why is it we allow ourselves to talk about digital the same way?”

With no ambiguity, Goodwin says: "You don't need a head of digital or a digital department. In fact you should banish the word digital as an entirely redundant word. But your company needs to understand these changing times and prepare to reimagine yourself for the near future, based on what new possibilities and threats new technology provide."

In one sense I agree with Tom. He’s right to encourage organisations to see the bigger opportunities. When he asks: "Why didn't a telco invent WhatsApp? Or GM start Uber or Kodak create Instagram? Or Blockbuster, Netflix?" he’s saying that putting a boundary around "digital" can prevent organisations from from making truly transformative, big strategic moves.

But the results of the MIT Sloan study show that for most companies, a digital strategy is precisely what is needed to build momentum towards digital transformation.

Around 80% of respondents from early stage companies said improving efficiency and customer experiences were objectives of their digital strategies. Only 52% said that transforming the business was an aim. In digitally maturing companies, however, nearly 90% of respondents said that business transformation was a directive of their digital strategies.

Cutting right across with digital

We can get bogged down in a debate about whether the business strategy should drive digital transformation, or whether a digital strategy should drive business transformation. Whichever way you look at it, digital strategy and digital leadership must not be siloed. Collaboration is key. Digital initiatives will cut across all parts of the business.

Digital maturity is strongly linked to a collaborative culture. In the study, more than 80% of respondents in maturing organisations said their workplace environments were collaborative compared to competitors. Only 34% of respondents from early-stage companies felt the same way.

Digitally maturing organisations were also much more likely to use cross-functional teams to implement digital initiatives - 44% from maturing organisations versus 16% from early-stage companies.

There is plenty more food for thought in the report, so do check it out.


Adam Cranfield is a digital consultant and director at DigitalFWD. If you are interested in a free introductory digital strategy consultation, please drop a line to hello@digitalfwd.com.