Digital technology has brought about an unprecedented scale and pace of change. Business leaders are increasingly concerned about their organisation’s ability to keep up.
So how do you increase your organisation’s ability to adapt to ongoing change? Spoiler alert – the answer is to build digital capability – which we define as the sum total of a team’s mindset, behaviours, skills and experience.
Once we’ve explored what digital capability is, we’ll look at how you can build it in your organisation. Finally, we’ll look at the real business benefits of investing in the mindset, behaviours, skills and experience of your people – not just in technology.
We all know that digital technology is creating fundamental change in customer expectations and business processes. As well as entirely new business models and methods of value creation. But digital transformation isn’t just about technology. Digital transformation is about the ability to adapt to ongoing change. As Darwin observed, it’s not the strongest of the species that survives, nor the most intelligent, but those that are most adaptable to change.
CMOs are under increasing pressure to demonstrate customer value and deliver against growth goals. To meet this challenge, marketers are investing in powerful technologies, tools and platforms. But to stay ahead of the curve over the longer term, smart marketing leaders are also investing in human-centred transformation. They aren’t just putting consumer data and insight at the core of their organisation; they’re equipping their people to act on it in brave and creative ways.
Getting to grips with the challenges
The clients we work with are facing a range of strategic marketing challenges:
- How do we become more customer-centric? Both customers and marketers want improved customer journeys that are more personalised, transparent and flexible.
- How do we plan integrated campaigns around a single view of the customer? Marketers want to know how to understand customers and treat them as individuals rather than touchpoints.
- What is the right data to model to predict and improve performance? In a recent 3Q survey, 49% of marketers said they aren’t satisfied with how directly data is tied to marketing decisions.
- How do we prove a return on innovation investments? Nearly a quarter of CMOs now have budget specifically for innovation projects, according to Forrester.
- How do we work more effectively with our agencies? In the same 3Q survey, 41% of marketers said they’re only somewhat satisfied with their agency experience, and 36% aren’t at all satisfied.
- How do we establish a digital culture? Marketing leaders are looking to enable their teams to work in more agile ways.
All of these challenges have one common element – a need for people with the right mindset, behaviour, skills and experience.
But digital talent is massively in demand. And with huge competition from the digital sector – from start ups through to the likes of Amazon, Facebook and Google – many organisations are growing their own talent, and striving for a culture of constant innovation and improvement.
Digital capability – the foundation of marketing success
Continuous disruption requires a new approach.
As the Global Digital Transformation Director at Unilever, says:
“It’s not all about the strategy. Or the technology. It’s about the people. How do we get the people who are good at delivering the today, to deliver the tomorrow better?”
We believe that digital capability is the vital ingredient for long-term marketing success. Ambitious companies are growing their marketing people; how they think, what they do and how they do it. We’ve been helping our clients do this since 2011 – working with brands as diverse as The Financial Times, Universal Pictures, TUI Group, adidas and Diageo.
What is digital capability?
A person’s digital capability – and by extension an organisation’s – is the sum of:
- Mindset – what we think and believe
- Behaviours – our default behaviours when it comes to work
- Skills – what we know how to do
- Experiences – what we’ve done or have seen others do
How does your organisation shape up against these elements of digital capability? Do you have a capability gap? And do you know how to fill it? In the next section, we’ll help you work out the answers to these questions.
How to build digital capability
Digital capability doesn’t grow by chance or in isolation. It needs the right conditions to flourish. It can easily be suffocated by the wrong sort of leadership, stunted by lack of strategy, or starved by the wrong culture.
You need to know what is powering or thwarting digital capability in order to design an effective change programme.
Our digital maturity tool Sonar measures digital capability and how it is enabled or limited by the business strategy, leadership and culture. We also use it to measure programme effectiveness against a benchmark and to create the business case for ongoing change.
Four factors of digital capability
1. Creating a digital mindset
Mindset is the most important element when it comes to an organisation’s ability to reinvent itself. If you want to reinvent the future, start with how people think – not what they know.
Our client, Diageo’s Global Digital Director, Marketing, Isabel Massey, explains:
“Driving change comes back to mindset – our willingness to question everything, to try new things, to learn as we go.”
Changing mindset is not a one-off, classroom-based training event. It requires inspiration, reflection, challenge, reinforcement and effort.
Our brains are effective habit-forming machines. They have evolved to help us perform routine tasks easily. But the age of disruption requires us to break out of our routine thinking.
A digital mindset is a growth mindset. It’s a way of constantly challenging our businesses and ourselves; a way of thinking critically and striving to do things better. Without this, no matter how many skills your people learn, they’ll do what they’ve always done.
As Sienne Veit, Online Product Director at John Lewis, explains:
“The key thing is being really comfortable with uncertainty. A digital mindset is an experimental mindset. It’s about focusing on your customers’ problems and working out the tools and methods to solve them as you go.”
Read our book Culture change in the digital age for more on the power of mindset to underpin organisational agility.
2. Embedding new behaviours
A growth mindset results in new behaviours. Behaviours symptomatic of advanced digital capability are collaborative, silo-breaking, agile and disruptive.
For many organisations, these types of behaviours are hard to realise. Like mindset, you simply can’t mandate new behaviours. So where do you begin?
Firstly, define the behaviours you want to create. How do they fit with existing values and principles communicated throughout the business? Often our clients already have a behaviour suite that is well understood. It might be that we just need to focus together on one or two to unleash something new.
When we know what behaviours you want to unlock, we look for the bright spots – examples of where they’re already being demonstrated. Recognising and celebrating these behaviours will make the change tangible to everyone. Telling stories around the impact of these behaviours is a powerful way to inspire others to follow suit.
And let’s not forget leaders.
The opportunities and challenges presented by rapidly evolving technologies push decision-making closer to where the actual work occurs. This challenges hierarchies and requires cross-functional teams to rapidly assemble and disassemble.
Visible leadership that models and empowers this change is vital to encouraging the behaviours that will transform our business. Culture is the biggest enabler – and blocker – of change. To a large extent it is owned by CEOs and leadership teams.
So if we’re asking people to challenge the status quo, leaders need to be part of the same journey. They need to be out there visibly challenging themselves and empowering their teams to do things differently. They need to tell the change stories that inspire people, and make the case for change that is so compelling, it’s unavoidable.
3. Building digital skills
A lack of digital skills among employees and leaders is seen as the most common block to digital transformation efforts. Two-thirds of organisations are currently investing in improving their digital skills according to Altimeter.
Improving digital skills is important, but it’s not the silver bullet to building capability that many think it is.
According to the 70/20/10 rule (accredited to Morgan McCall and colleagues at the Center for Creative Leadership in the 1990s) 10% of learning comes from formal training, 20% comes from peer-to-peer conversations, and 70% comes from learning on the job.
Everyone needs a base level of digital knowledge to create a shared language around change, even if not everyone will be practically applying the more advanced digital skills.
Learning and development investments now account for up to 4.2% of total marketing budget, according to February 2018’s CMO Survey (an increase of 55% on 2014). However, according to a recent survey by the Technical University Munich and backed by SAP, only 16% of organisations have a digital skills strategy.
Our clients are doing a number of things to tackle their skills gaps: training for digital skills at scale with e-learning programmes; hiring aggressively from digital agencies; working with specialist digital talent in boutique agencies and consultancies. Meanwhile they are upskilling their existing marketing teams to ensure everyone becomes a digital generalist with a growth mindset and an appetite to drive change.
We work with marketing teams that want to deepen and embed their digital skills to make transformation business-as-usual. Our action-based capability building approach uses innovation pilots to cement skills, create peer-to-peer learning and on-the-job experience of new skills in action.
4. Creating developmental experiences
So, you’ve got the mindset. You’ve got the skills. Now to create a space for people to experiment with new behaviours. A digital mindset needs exercising if it’s to become a habit.
Disrupting, failing fast, rapid testing and learning…these radical behaviours can be toxic in traditional, hierarchical organisations. Unleashed without protection, the organisational immune system will soon kick in.
Without a safe environment, people won’t challenge because they won’t feel empowered to. They won’t take risks, because they’ve seen the price of failure. They won’t ask questions, because they’re not compensated for learning new expertise. They won’t take on something they can’t succeed at when only success is rewarded. Above all, they won’t innovate.
Our capability programmes create opportunities for people to quickly apply their new-found digital mindset, behaviours and skills within agile innovation sprints and pilot initiatives. We call it action-based capability building. It develops and embeds skills and new ways of working and begins to challenge the predominant culture of marketing teams. And with demonstrable impact. According to McKinsey, when genuinely agile ways of working are embedded across marketing teams, they can result in a revenue uplift of 20-40%.
Investing in digital capability
Our capability programmes have created tangible business results across a number of areas, where new skills are underpinned by the right mindset and behaviours:
- Improved business and communication processes
Increased efficiency and effectiveness, plus a better experience for marketing teams.
- Greater adoption of technologies, platforms and tools
This not only improves ROI for CMO investments, it also demonstrates marketing’s role in driving growth and value creation.
- Better performing content
This ultimately leads to increased brand relevance among consumers and B2B customers.
- Streamlined customer journeys
Customer journeys that deliver better experiences at every touchpoint.
Getting the basics right – a brilliant change story
We worked with a global FMCG company to help the marketing leadership team understand the digital capability of its people, and how this was (or wasn’t) supported by the business strategy, leadership and culture.
With this insight we created a strategic digital capability roadmap. Starting with digital skills building, the roadmap then creates opportunities for teams to apply their newly acquired skills to business and brand challenges.
By starting with a discovery diagnostic, the business has been able to understand its capability and target resources to maximise the pace of change. In addition, the insight has enabled the CMO to have a different conversation with the CEO, changing perceptions about what is needed to drive transformation.
Growing a digital mindset – a brilliant change story
For the last year we’ve been working with another global FMCG client on a digital capability and marketing transformation programme. As it is a marketing-led organisation with award-winning people, innovations and campaigns, we were starting from a high place. However, the transformation lead knew there was something missing.
To unlock the power of digital transformation, they wanted global marketing teams to embrace the energy of critical thinking. Through a highly experiential and practical three-day intensive workshop for change leaders, we introduced the key elements of the digital mindset. The mindset content was highly provocative and impactful, and has now been taken to the whole of the marketing organisation.
As a result, 100% of the attendees said that they want to be part of a change community to accelerate transformation, and 91% believe they will see an impact on their work in the next 12 months.
Creating new behaviours to drive customer experience – a brilliant change story
When a large automotive client wanted to create a customer-first culture among its global marketing, sales and service function, we started by looking for examples of where this was already happening. We wanted to champion the stories of people who were making a difference everyday, in ways both small and large.
Over a two-year period, we’ve captured hundreds of examples of people changing what they do to better deliver on customer needs; one conversation, one action, one transformational step at a time.
As a result of the programme, 79% of employees have been encouraged to make a positive change in their behaviour.
Using pilots to enable new ways of working – a brilliant change story
We worked with an international film studio to develop connected ways of working across global markets. We collaborated with market representatives on a set of pilots to improve communication, workflow and outcomes.
Working directly with both head office and markets enabled us to identify what would have the most impact for the business and co-create solutions quickly. The resulting change has enabled us to embed new behaviours and scale the success across the rest of the organisation.
The pilot process has helped the marketing teams challenge each other more effectively, experiment with new behaviours and take ownership of more agile, efficient and impactful ways of working.
Building digital capability is the key to digital transformation and securing long-term marketing effectiveness.
Once you are on this path you’ll have a clear, inspiring vision that speaks directly to people’s needs and motivations. Take the time to understand the current state, and develop a focused strategic roadmap to realise your vision.
Invest in developing all four elements of digital capability – mindset, behaviours, skills and experience. Continue to nurture all of these elements and recognise that capability is a journey, not a destination.
Get in touch
Talk to us about building digital capability in your organisation. We can develop the right mindset, behaviours and skills to create the experiences that will deliver rapid change.
Check out our Sonar tool to help understand the current state of your team’s or organisation’s digital capability.