What digital strategy actually does
At Next Mile, we’re not fans of the waste most digital strategy consulting seems to generate. However, one part of digital strategy does help: the core. In our quest to generate sustainable digital successes, we’ve identified the functions a good strategy performs and why it matters.
“Do we need a digital strategy, or should we just keep moving forward?”
Every executive or business owner has asked us this in some way. Tech types may scoff at the idea of a multinational organization without a declared digital strategy, but we fully empathize with the business: digital is not their core value, technology is a means not an end, and strategies about strategy add confusion.
“You don’t need what people call digital strategy, you need the part that works,” we reply.
What is digital strategy?
Digital strategy is a policy organizations enact to guide technology initiatives, decisions, and actions toward desirable business objectives. Importantly, effective digital strategy also deliberately excludes irrelevant targets.
Unfortunately, contemporary consulting thinking about digital strategy is plan-driven and shockingly tactical. When we compare the digital strategy status quo to professional strategists’ thinking about strategy, we’re left with something different.
Conventional digital strategy
Let’s begin with an overview of the industry-accepted definition of digital strategy, why it’s important, and how you’re supposed to build one.
Conventional digital strategy defined
Dr. Dave Chaffey summarizes Gartner’s 2023 definition of digital strategy nicely:
“A digital strategy defines an organization’s priority initiatives for future investment in digital technology to make a business more competitive by digitalization of its processes and review of its business model. It has a broad scope, covering how digital technology can support business goals across the business.”
Synthesizing that into business bulletese:
- Do technology
- Improve performance
- Get efficiencies ($)
Who could say no to that?
Why you’re supposed to have a digital strategy
- You have no direction
- You don’t know your audience or customers
- Competitors will steal your market share
- You need a powerful online value proposition
- You haven’t integrated anything
- You waste money on duplication
- You can’t catch up or stay ahead
- You’re not optimizing
- Digital doesn’t have enough people working on it
Most advice then invokes well-known, big-company parables about the iPhone, Domino’s Pizza Tracker, or Starbucks selling costlier coffee to further spur FOMO and motivate action.
How you’re supposed to create your digital strategy
Exactly how we get to a viable digital strategy varies by source, but most lead with marketing:
- Determine the purposes of the strategy
- Define your brand
- Identify customer channels
- Create adaptable processes
- Create a content strategy
- Choose which tools to use
Some abuse a technology-driven checklist, twisting every potential tool into a thing you need a strategy for (or against):
- Digital goals (brand, objectives, campaigns, disruption, business models)
- Digital audiences (B2B, B2C, C2C, etc.)
- Digital devices (phone, tablet, voice, desktop, signage)
- Digital platforms (FAANG tools)
- Digital media (search, PR, email, social, inbound, outbound)
- Digital data (customer and device data)
- Digital technology (everything from SaaS to AI to IoT)
Others like BCG recommend sweeping organizational objectives:
- Assess the strategic impact of digital. Do a bunch of value chain exercises to gauge your potential impact.
- Set your digital ambition high. Network effects, winner-takes-all, jump in with both feet—the usual encouragement to spend profligately.
- Place big bets. Focusing on two or three of the most valuable use cases to give greater clarity and set priority. This one's good advice.
- Build new strategic muscles. New capabilities, new culture, scarce talent, etc.
- Manage transformation actively. Start a digital transformation initiative.
Don’t forget the what-ifs:
- Does digital technology change the businesses you should be in?
- How could digital technology improve the way you add value to the businesses you are in?
- Could digital technology change your target customer?
- Does digital technology affect the value proposition to your target customer?
- How can digital technology enhance the enterprise capabilities that differentiate you from your competition?
So, will any of this strategery work?
What we confuse for strategy
When we cross disciplinary lines into geopolitics, history, and military science, the true utility of declared high-level strategy becomes clearer. Strategy here has a longer pedigree than digital, matters more than digital, and has a track record of achieving societal change.
In The New Rules of War, Dr. Sean McFate argues that strategy, especially grand strategy, is imperative, though easy to misuse. He identifies five varieties of strategic abuse:
- Grand fluff: superficial babble that masks the absence of thought. Grand fluff reads like Santa's wish list and can't be acted upon.
- Self-aggrandizing literature wherein authors justify past bloopers by claiming they were following a grand strategy invisible at the time.
- Fuzzy scholarship: historical analysis of a success that assumes a master plan no participant would've had at the time.
- Mistaking small strategies for grand strategy. Grand strategy should span and survive leaders and take a long time to effect.
- Mistaking bureaucracy for strategy. Organizations smother strategies by overprocessing them.
Dr. McFate acknowledges that cynicism is understandable given the misuse of strategy and grand strategy for years. Much of what we’ve seen presented as business strategy is neither strategy nor grand strategy but grandiose tactics—large lists of nebulous tasks.
Digital strategy is grand strategy
Strategy and grand strategy differ primarily in scope. In geopolitics, a military would employ a strategy, but an entire nation would harness all its resources to pursue its grand strategy. In business, our analogs would be the IT or product development departments’ strategies versus the whole company’s grand strategy.
Digital strategies are grand strategies because they:
- Have a practical intent
- Extend thinking beyond the short term
- Encompass internal and external needs, goals, and impacts
- Require resources or participation from most of an organization
Critical “what-by-whens”, SMART criteria, prioritization exercises, and other operational strategy thinking comes next, subordinate to your digital strategy.
What makes a good grand strategy?
Grand strategy's purpose is to identify, engage, and protect an organization's interests—and not all interests are equal. According to Dr. McFate, grand strategy is a policy that governs how an organization behaves. Good grand strategy has five characteristics:
- It is not restricted to trends, business cycles, or your day-to-day, and accepts that success and failure can coexist.
- It's dynamic and flexible, requiring a constant balancing of resources. Strategy is not a checklist, but rather a platform that facilitates your teams’ daily improvisations.
- It harnesses all of your instruments of power.
- It can be offensive, defensive, or both.
- It can endure over a long time relative to your typical operating horizon.
Done well, grand strategies guide an organization, coordinate its resources, and synchronize its actions in the market. Without it, organizations are rudderless and become reactive.
Any examples of successful grand strategy?
History’s chock full of effective strategies both grand and petit. We remember the big ones but never think about them because they seem so simple and obvious in retrospect:
- Fortress Europe
- Focus on victory in Europe (WWII)
- Containment (of communism)
- Primacy/U.S. hegemony
The success driver behind any historic grand strategy was never its secrecy, cleverness, or some supervillainy if-then master plan, it was its simplicity. Those strategic statements above each provide the what and infer the why to their intended context-aware audience. They’re a policy, a touchstone, a test, and a slogan all in one.
Now apply grand strategy to digital
Grand strategy is grand not just because of big goals, but because its simple message can align more teams and move more individuals toward the same broad goal.
Six tests determine your digital strategy’s veracity. Does it help:
- Keep distracting or bad ideas off the table?
- Aid prioritization?
- Guide change away from worse ideas?
- Clarify avenues for everyone’s participation?
- Endure beyond one champion’s force of will?
- Focus attention on a desired experience?
Even a generic barebones strategy like “our digital properties must create confidence in our products” checks each box:
- Keep bad ideas off the table Does feature x create confidence?
- Aid in prioritization. What creates the most confidence?
- Guide change away from worse ideas. Feature x isn’t creating confidence!
- Clarify avenues for everyone’s participation. “In QA, I create confidence by…”
- Endure beyond one champion’s force of will. “What if so-and-so leaves?”
- Focus attention on a desired experience. ”If users have a positive first experience, they’ll gain the confidence to try our product’s other features.”
Obviously there’s a “because x, y, and z” missing from that confidence strategy statement. Barebones works, though, because your strategy has to be communicable, easily understood and retained, communicated through a chain of people, and communicated and understood over a long period of time by participants who enter and exit. It cannot be thoughtless fluff (“let’s champion aspirations for all humans”).
How will digital strategy policy help us execute?
Policy enables effective planning, planning enables meaningful action. No matter how magnificent or intricate you make it, strategy ultimately guides behavior and decision-making over time, so it’ll devolve to its basest form by necessity. If you don’t have that strategic core defined up front, you lose control before you begin.
Dwight Eisenhower's famous quote, “In preparing for battle I have always found that plans are useless but planning is indispensable” cuts straight to the heart of digital strategy. The guiding light provided by your grand digital strategy clarifies planning and ensures that planning activity stays relevant. Focused, declared digital strategy that meets our six tests will:
- Prevent wasteful make-work
- Preclude the larks and pet projects common to digital
- Guide the small decisions that comprise a large project, speeding progress
- Channel the impact of a collective effort toward something intentional and meaningful
Again, think simply: “contain communism” or “create confidence in our products”. Anchor your digital strategy in a meaningful what with an inferable why, then move to planning, then action.
With every digital project we touch, Next Mile helps customers shed the complexity that creates ambiguity and results in waste. We're naturally skeptical of anything that sounds oversimplified, but unless you can control everything personally, only simple strategies work.