While there are internal elements, such as new social collaboration tools for employees and the adoption of more agile ways of working, much of the desired transformation relates to customer-facing activities, especially sales, customer service and marketing.
But what do we really mean by ‘digital’? What is a digital organisation? Clearly we have gone beyond the words ‘online’ or ‘internet’ because they do not adequately encompass mobile and other channels, or increasingly digital media.
But I think digital stands for even more. An organisation is digital if it exhibits two things: it focuses on the customer experience, irrespective of channel, and it has a digital culture.
If you have read Marketing Week and Econsultancy’s Modern Marketing Manifesto (mwlinks.co.uk/momama), you will know that customer experience is a crucial part of what we believe marketing to be. In this regard, digital, as defined by a focus on customer experience, is very much the domain of marketing.
Many quintessentially digital businesses show this focus on customer experience, although not necessarily through digital media. Luxury retailer Net-A-Porter focuses a lot on customer service, personal shoppers and packaging; Amazon now impresses more through its delivery and fulfilment than its digital properties; and the Gov.uk strapline for its digital transformation programme is “Digital services so good, people prefer to use them”, showing its commitment to customer experience.
So, on the second point, what is a digital culture? Over the years, by talking to organisations with sophisticated digital marketing and ecommerce, and through primary research, I have observed recurring characteristics of a digital culture or mindset. And – no surprise – these correlate highly with our definition of modern marketing.
A digital culture is commercially minded, irrespective of job functions. Decisions are data-driven. This does not mean there is no instinct or creativity, but ideas are tested and decisions based on the resulting evidence. A digital culture is customer-centric. It is transparent, with data – including commercial performance – widely shared. It is collaborative, with multi-disciplinary teams that often change by project.
A digital culture is empowered by a ‘permission to fail’ and ‘ideas can come from anywhere’ mentality. It is hungry to learn, embraces change and has agile working practices. There is an entrepreneurial ‘growth hacker’ mindset with technology and marketing closely aligned: the marketers tend to be tech-savvy and vice versa.
The working environment, both physical and virtual, is also important. Office spaces within a digital culture are open plan with spaces to huddle. The organisational language used is subtly different: you tend not to hear about ‘departments’ but ‘teams’. The working tools tend to be cloud-based and collaborative. Many larger organisations which are creating digital or interactive teams are creating new office environments very different from the corporate headquarters, specifically to nurture this digital culture.
Long-established brand Burberry is a good example of digital transformation. In 2006, it was significantly underperforming compared with its peers. Angela Ahrendts took over as chief executive and instigated a programme of change, focusing on customer experience and driven by digital technologies.
She says: “Digital has been a catalyst for everything in the company and, when we got everyone on board with this concept, they were clamouring to become even more connected.”
Burberry is now doing very well and Ahrendts will move next year to Apple, arguably one of the finest exponents of customer experience.
In the end, as shown by Burberry, the real opportunity for digital transformation is in fact the transformation of an entire business, its culture and its financial results.
Ashley Friedlein is chief executive of Econsultancy, a sister brand of Marketing Week