We all make mistakes. And in a fast-evolving space like digital, businesses make more mistakes than usual. Mistakes can be a great learning experience, but much better to learn from others’ mistakes than your own. So here are a few of the mistakes that I’ve seen businesses make. Hopefully your organisation can learn from them.
1. Setting modest aspirations. Digital leadership requires radical thinking, and radical thinking requires bold ambition. Digital drives winner-takes-all economics, due to low fixed costs. Fast-followership is not fast enough. Modest ambitions drive below-modest outcomes.
2. Failing to provide senior sponsorship. Our surveys tell us that the CEO is personally involved in driving the digital agenda in 55% of organisations. That leaves 45% where they are not. Digital is sufficiently transformative that even a powerful CDO needs CEO help from time to time.
3. Missing the big picture. Digital creates myriad short-term opportunities for every organisation. But a focus on the short-term all too often leads to missing what is really happening. For example in sectors where digital is most disruptive (e.g., banking, insurance, telco, travel, media) a fundamental re-think of the business model is required, not incremental improvement.
4. Underinvesting. As I mentioned in my last post about funding digital, the scale of the digital opportunity is huge. On average companies can uplift profits by 56% by applying digital well. Capturing that value requires commensurate investment. Yet most companies invest only a fraction of what is economically justified.
5. Squeezing out digital talent. Every firm I speak with agrees that digital talent is both critical and scarce. But most companies don’t have a clear value proposition to attract ‘digital natives’. Worse, some companies attract high-potential digitally-skilled workers, but then ‘squeeze them out’ by creating a straight-jacketed environment that doesn’t allow them to flourish.
6. Competing with yourself. In many organisations, digital channels compete for customers, talent and funding with traditional channels (e.g., store or phone). All too often the heavy-hitters in the management team are running the traditional parts of the organisation, so digital get starved of the resource it deserves.
7. Building instead of buying. One reason why digital is synonymous with speed is that there is so much capability available on the market. Why hire when you can contract? Why buy hardware when you can rent space in the cloud? Why build bespoke apps when you can tailor toolkits? Yet many companies persist with a ‘not invented here’ mind-set that is both expensive and slow.
8. Striving for perfection. The search for perfection can be powerful, especially when applied to driving an outstanding customer experience. But perfection can also kill agility, for example when it’s applied to a business case or a beta-version app. Many organisations, especially in heavily regulated industries, have a perfection habit that stifles progress.
9. Undervaluing data. In a digital world data is the new oil. It can be directly monetized, used to upgrade the customer experience, used for better strategic decision making, used to manage risks, and many other applications. Data can be collected everywhere, from every interaction with a customer, employee or supplier. But vanishingly few companies have realised the value of the data they have, and still fewer are driving value from it.
10. Failing slowly. Digital leaders experiment widely, expect to fail frequently, and may attempt the same objective multiple times in different ways. But many companies hold on to ‘failure is not an option’ mind-sets, leading to drawn-out projects that hoover up cash and resource to save executive face.