Why is it that some companies embrace and succeed in digital, while others fail?
I am becoming convinced that the failure of a digital strategy often has little to do with the competence of their web team. It is more to do with the culture of the organisation itself.
You can have the best web team in the world who produce the best websites and apps, but if the organisation behind them is not digitally friendly then the results will be disappointing.
So what makes one company digitally friendly and another not? Below I outline my top ten reasons, but I would be keen to hear yours in the comments too.
Digitally friendly companies are innovators. They embrace experimentation and actively seek out new opportunities.
This characteristic is more common among younger companies keen to capture market share. The more established the company the less likely they are to risk their current position by pushing into new areas.
Of course what these larger companies fail to realise is that digital has redefined the landscape and that in many cases their established position is no longer safe.
Unafraid to make mistakes
There is no fear of making mistakes. Instead mistakes are seen as a necessary part of the process. Employees are not punished for making a mistake and there is no culture of ass covering.
Take the employee handbook at software company Valve(pdf). It reads.
Nobody has ever been fired at Valve for making a mistake. It wouldn’t make sense for us to operate that way. Providing the freedom to fail is an important trait of the company— we couldn’t expect so much of individuals if we also penalized people for errors. Even expensive mistakes, or ones which result in a very public failure, are genuinely looked at as opportunities to learn.
They go on to say:
Screwing up is a great way to find out that your assumptions were wrong or that your model of the world was a little bit off. As long as you update your model and move forward with a better picture, you’re doing it right.
An iterative mentality
Traditional organisations prefer fixed price projects with a finite timescale. They perceive these as easier to manage and carrying less risk.
Although this belief may hold true in some areas of business, it does not when it comes to the web. Your digital strategy is never done, your website never complete.
When companies do try to carry out finite web projects they all too often lead to very expensive failures. Just look at the launch of Healthcare.gov.
Healthcare.gov is a great example of a large web project that was approached with the wrong mentality.
Like people, many older companies become set in their ways. Whether officially (through standard operating procedures) or unofficially (in the form of cultural norms) they are unwilling to adapt to changes in the landscape. As Dr Leroy Hood once wrote:
Bureaucracies are honed by the past and almost never can they deal effectively with the future.
This often means they try and crowbar new innovations into their existing structures. In the case of digital this means trying to fit it into their existing departmental structures. This often limits its potential.
For example, many organisations have placed digital within marketing. Unfortunately this means the web is often seen as nothing more than a marketing tool, when it could be so much more.
This is in stark contrast with digital friendly companies that often work with small adhoc working groups that are formed and disbanded as need requires.
The rigid departmental structures found in many organisations can seriously hamper the successful delivery of digital strategy. This is because successful digital implementation relies so heavily on collaboration between various skillsets across the organisation.
Unfortunately, instead of cooperating to deliver digital services, departments fight over control and come into conflict in an attempt to maintain their own thiefdoms.
In digitally friendly companies people from various parts of the organisation come together to solve specific problems, without being overly concerned with lines of reporting or company structure.
Because many organisations are used to a world where the cost of mistakes is high they tend to be cautious, with many checks and balances. There are committees, procedures and policies to ensure everything is perfect before committing.
Unfortunately these processes make many organisations slow moving. This is fatal in the fast moving world of the web. Just look at how Netflix outmanoeuvred Blockbusters. Blockbusters, when compared to Netflix, was too slow adapting to the new streaming opportunities.
Worse still is that these checks and balances are less necessary when mistakes can be corrected with relative ease.
I am shocked how many organisations still treat their employees like they were unskilled workers operating on a factory floor. Micro-managing, monitoring performance and enforcing a rigid hierarchical structure, it is hardly surprising they are not getting the best from their web professionals.
Too often web professionals are treated as nothing more than implementors of senior managements ideas. Unfortunately when it comes to digital, senior management are rarely the most informed.
Compare this to more digitally progressive companies who empower their employees to make decisions. Not only does this get more from staff but also facilitates much faster decision making.
Investing in staff
Another sign of how many organisations perceive their employees is the poor level of investment they place into training.
Organisations hire digital workers for their expertise of what is a rapidly evolving medium, and yet fail to invest in keeping those skills up to date. It is hardly surprising that their digital offering fails to keep up with the competition.
Not that it is just their training that is neglected. I often encounter digital teams who do not have the right tools to do their job. Digitally friendly companies ensure their staff have the right working environment and equipment to ensure they can get the maximum productivity from their employees (not to mention ensuring they remain happy).
With such a high demand for good digital staff, investing in your staff is crucial to retain them over the long term.
One thing you will notice when visiting digitally friendly companies is there obsession with customers.
If you walk around Mailchimp you will see posters on the walls showing the personas of their different users. This is in stark contrast to many of the traditional businesses I visit. Their walls are covered with awards or photographs of their work and products.
One focuses on the customer, while the other is more concerned about itself. This is a metaphor for how these companies think. One is looking outside and the other in.
Successful digital companies always keep their eye on the end user. As they communicate online the emphasis is on the customers needs, rather than on promoting the company. They are more interested in talking about the customer than they are themselves.
This is a subtle, but crucial difference. Users have such high expectations of online service that taking your eye off of that ball will drive them away.
Digital by default
Finally, digitally successful companies turn first to digital for solutions. Where traditional businesses think of digital as an after thought, these companies see it as the first place to look for a solution.
Where there are services that are currently being delivered offline, they will look to move these services online in order to reduce costs, increase efficiency and better serve customers.
The British Government is a good example of this digital first thinking. It realised that moving 30% of government services online would save the tax payer £1.3 bn each year.
Digital isn’t always the right solution to a business challenge or opportunity, but digitally successful companies will always consider it first before turning to other approaches.
Is this a complete list of all the characteristics of digitally successful companies? Absolutely not. Is the success of companies in the digital field down entirely to the way they are structured?
Again, no. But, what this list does tell us is that success in the digital arena is about a lot more than having a solid strategy and good staff. It’s about the culture of your organisation too.
That means, for some organisations, big changes will need to be made over the coming years.