Sometimes events get ahead of you. Did you have intentions of implementing a business continuity plan for your business but perhaps it just never got the priority needed to get it defined and operational? Because of events like COVID-19—events we can’t control—now is the time to make it a priority and make it happen.
The adoption of “digital” in your business may be another of these initiatives with great intent and little traction. With the need for increased abilities to manage your employees, and your customer acquisition and relationships more virtually, you may be behind the curve.
In 1386, when Geoffrey Chaucer turned the phrase “better than never is late” in The Canterbury Tales, he captured some excellent business advice. It’s interesting that the second part of Chaucer’s phrase rarely gets mentioned, but it may be even more important. Chaucer continued, “never to succeed would be too long a period.”
So, if you feel behind the digital adoption curve, let’s roll up our sleeves and get to work!
I’d like to make a case where actual market data on digital technology use will be useful to set your business planning context:
-How far along are small- and mid-sized businesses (SMBs) along the digital adoption curve?
-What are they planning to do now to prepare for a post-COVID world?
Since businesses have had the potential to get their business on the internet for 25 years, you may think that the overall maturity of digital initiatives is pretty advanced across the board. Here are some statistics to add context to your planning.
You can benchmark your progress against these statistics from the 2018 U.S. Chamber of Commerce study on the impact of technology on SMBs: U.S. Chamber of Commerce-SMB Technology Use
So far so good, but you might be surprised how few small- and mid-sized businesses (SMBs) are effective users of digital technologies. By effective, I mean proactively setting goals and measuring performance and ROI. If you ask SMB executives about what value they get from their digital investments, too often you get shoulder shrugs.
Now let’s take a look at digital initiatives in the context of the COVID-19 virus and the need for increased digital and virtual interaction with customers and employees. Here’s data which has just been published as a joint research study between the Association of Corporate Growth (ACG), and our firm, Chief Outsiders: https://contact.chiefoutsiders.com/the-great-commercial-engine-restart. Even if you are not part of a PE firm’s holdings you will find this useful as it has applicability to CEOs across multiple industries.
How will the role of digital marketing and ecommerce change for your portfolio companies going forward?
With 71% of respondents saying digital marketing and Ecommerce will be even more important, it may be time for you to review and reconsider your digital plans and investments to remain competitive. In some markets, having a well-developed digital plan will get you growing faster than your competitors, and this is an excellent opportunity to realize less expensive market-share gains.
Here’s a simple spectrum of digital technologies. I offer this model to provide a starting roadmap for your business. My recommendation is two-fold: first, that you move left-to-right on the spectrum and second, that your priorities are digital initiatives which bring value to your customers.
Focusing on value creation is critical. I’ve seen companies, big and small, which have invested heavily in non-value-added digital technology and as a result, have lost their competitive advantage. Spending on digital infrastructure like a new ERP/ERM can be especially dicey as business impacts, investments, and diversion of management focus can have large negative impacts.
Use this model to complete a self-assessment. Wherever you are on the spectrum, ask yourself these questions:
There are many business drivers that “acting digital” supports and enables. Profitable growth is often a primary driver for digital initiatives. As the economy starts to strengthen—and it certainly will—having a growth strategy and plan will be critical to your ongoing success.
Here’s are three areas for your “Act Digital” initiative to consider. As you evaluate each option, what could digital do for you that you are not doing today?
Improve Your Go-to-Market Strategy and Performance
Where can you go for short-term profitable business growth? This model, which has survived the test of time, remains effective in thinking through your options.
Ecommerce can take you into new markets or help launch new products. Ecommerce is great for testing new product or market initiatives. Ecommerce provides real-time feedback which helps you test new products and iterate to quickly discover what markets value. Perhaps that’s why our research shows Ecommerce as a critical business initiative going forward.
Improve Your Customer Experiences
Here’s another excellent place to start: existing customers and existing offerings. You may think you are effectively servicing your existing customers, but are there ways you could engage with them digitally that would improve your relationships, improve their satisfaction, and improve your Net Promoter Scores?
Digital technologies can add value to your products and services through more personal customer interaction. Digital technologies replace ineffective interactions with real-time, higher quality interactions. Customer experiences become opportunities to cross-sell, upsell, and understand what additional features customers desire. These interactions support faster, higher confidence product iterations.
A year ago, I worked with a chemical business with a goal of increasing and improving customer engagement and improving their competitiveness by “becoming more digital.” Since there were many options for activities we could digitize, we started with a survey, providing clear guidance on customers’ views of priorities. Then we mapped those priorities against the company’s priorities for reducing cost and increasing productivity, and finally against the technology platform options we had. What resulted was a clear multi-year roadmap.
Improve Your Distribution Channel Presence and Performance
Digital technologies have another major contribution to growth: expanding your reach. Greater reach translates into more sales. Constraints on your customer acquisition activities due to personal contact and geographical limitations are quickly eliminated with a well-constructed website supported by digital marketing programs.
All three of these potentially profitable growth areas can be effectively enabled and improved by digital technology. But this is important:
“Business First, Digital Second.”
When someone uses the phrase “digital transformation,” I always ask them: “Isn’t it the business that needs transformation, and aren’t the technologies secondary?
I believe it is important to start defining your digital activities by identifying those business processes you feel technology can bring value to. Then, once you have that working list in hand, you can start by simplifying and then automating those processes.
If you’d like a deeper exploration of the process and value of “Acting Digital” you can download this free eBook.