Britefire CEO, Godfrey Parkin, 16 May 2011
The digital revolution – in which technologies have added enough value to users’ processes to earn their adoption – is forcing most industries to rethink their communications, their supply chains, their competitive strategies and even their business models. But because the digital field is constantly shifting and frustratingly ephemeral, senior executives are required to do two things they are far from comfortable with: climb steep learning curves and acquire an appetite for risk.
Nothing has triggered this anxiety more than the rise to prominence of what is simplistically referred to as “social media.” Marketing conversations are peppered with the clichés of the social evangelists: conversation marketing, customer engagement, fan bases, social media, viral marketing, collective couponing. Twitter, YouTube, Facebook and LinkedIn are on everybody’s agenda and in everybody’s mobile. Every 24 hours another 700,000 people join Facebook, another 5,000 days of video are uploaded to YouTube and another 100 million tweets get posted. There is a sense that the social train is leaving the station and that if you don’t scramble to get on board now you will simply be left behind.
Risk-averse senior managers step back and insist that the down-side threat of social engagement (“people might say bad things about us”) outweighs all the upside hype. Others are paralysed by indecision, hoping fervently that the cosy advertising-centric days of the 20th century will miraculously return. Enlightened executives understand that the balance of power in business-to-customer relations has forever shifted, so it is important to do something. But what? And how?
As our digitally-dominated world spins ever faster, and change becomes more disruptive, all organisations – business, government and academic – find it increasingly difficult to anticipate where their markets are going. The fuzzier the future becomes, the more essential it is to approach business strategically, viewing the future through the eyes and aspirations of our customers instead of through the functionality of our current enabling technology.
In the days when yesterday was a good predictor of tomorrow, strategy often consisted of applying percentages to past data, without taking too much time to evaluate alternative scenarios for the future. Our competitors were well known to us, our markets had formidable barriers to entry, and our customers had few options to choose from. Having an easily defensible status quo dulled our strategic instincts, made us complacent about customer’s needs, and made any move outside of proven best practice seem unnecessarily risky. We could get by without challenging who we were, why we existed, or where we were going. What has changed?
We are living in exponential times, where change is typically disruptive and unpredictable. The simplicity with which credible information can now be shared instantly with millions of individuals overwhelms most of our traditional barriers to competitive entry: big advertising budgets, wide physical footprint, sophisticated supply chains, economies of scale, geographic exclusivity, transportation logistics. Now, the competitive advantages that matter are those that previously were marginal: customer care, user experience, loyalty, personal connections and customer-centric innovation.
Are our 20th century business practices invalidated just because individuals are communicating with each other with a scope, range, precision and intensity that was unthinkable in the 1990’s? Yes, because information is the driver of opinions, and opinions fuel purchasing decisions. A decade ago, businesses controlled information about their products, services and practices. Today marketing messages are only a small part of the stream of inputs available to individuals, and those messages are regarded with scepticism.
Reactively pursuing a “social media presence” in the belief that it will somehow automatically regain your competitive edge is a total waste of time, money and opportunity. Social networking is not a channel through which we can blast messages, it’s a fundamental change in the way our customers want to do business. So of course it requires strategy, a strategy that encompasses business models, organisational structures, policies, procedures. It requires that we make an effort to find out about the individuals who make up our customer base, that we actually care about what matters to them, and that we create the resources which allow us to be helpful to them.
Developing a business strategy takes a combination of art, science and experience. It takes time and it needs a framework or methodology that cuts through the fog of uncertainty and helps to structure a clear path to success. The first thing any organisation should do is rise above the current social media frenzy, and get a clear view of the big picture that is unfolding for their industry, their markets, their competitors and their customers. They need to clarify where this is all heading, and what the most desirable end-game is. Then, by examining the gap between where they are today and where they need to be, they can prioritise and set objectives. Once they have crystallised the state that they are aiming to achieve in terms of sharp objectives, it gets easier to evaluate alternative approaches to getting there. Those approaches form the basis of the strategy. From there, you can put together operational plans knowing that you are planning to do the right things with the right motives and the least risk.
Of course, this is easier said than done. Britefire has been in the business of strategy development for decades, guiding organisations through the shifting digital landscape and clarifying how best to conquer and retain the markets that matter. We’re happy to share that expertise with you. If you want to benefit from our insight and experience, participate in our Doing Business Digitally course, and you’ll walk away with a much clearer idea of how to take control of your future!