Management

DIGITAL
TRANSFORMATION:
Leveraging Digital Technology with Core
Values to Achieve Sustainable Business Goals
BY IRA KAUFMAN AND CHRIS HORTON

Digital is changing the way business operates, forever alter- following statistics from a 2013 research report issued by
ing the content of messaging, control over brand, interac- Adobe (aptly titled Digital Distress: What Keeps Marketers Up
tion with customers, and communication with stakeholders. at Night?) reflect the “digital dilemma” facing marketers:1
We are all, to some degree, students of the digital evolu- • Only 9% of respondents strongly agree with the statement, “I
tion – executives and non-profit managers, owners and en- know our digital marketing is working.”
trepreneurs. Below Ira Kaufman and Chris Horton discuss • 82% of marketers admit that they don’t have formal digital
how clarifying and aligning an organisation to a successful training and are learning on the job.
digital strategy can help a company achieve its sustainable • 76% of marketers are struggling to keep up because the mar-
business goals. keting profession has changed more in the past two years
than it has in the past 50.

E
ven though we each may have different experiences and
responsibilities, we all face the same overarching chal- These sentiments are underscored by comments from leading
lenge: to rapidly prepare for the Digital Tsunami already marketers operating on the front lines of digital transformation:
reaching our shores and learn how to effectively respond to the “Marketers are facing a dilemma: They aren’t sure what’s
rapid digital transformation following in its wake. Doing so re- working, they’re feeling underequipped to meet the challenges
quires individuals and organisations have the confidence and of digital, and they’re having a tough time keeping up with the
understanding to make digital integration and transformation a pace of change in the industry… What’s worse no one hands you
strategic imperative. a playbook on how to make it work,” says Ann Lewnes, CMO,
Adobe Corporation.2
Digital Disruption Clark Kokich (former Chairman of Razorfish) admits “There
One doesn’t have to look too hard to find evidence of the pro- are hundreds of thousands of people who were trained and men-
found impact digital is having on the marketing function. The tored, and studied classical marketing, and they got good at it…

www.europeanfinancialreview.com 63
 Management

The Digitally Integrated Organisation A company’s journey towards a DIO (digital, sustainable,

values-driven organisation) evolves through three stages.6
(DIO) integrates digital technology and • PASSIVE STAGE – there is formal compliance and support for
marketing strategy with core values minimum requirements like corporate social responsibility
initiatives and environmental regulation. There is no impetus
to drive organisational goals that lead to drive positive change.
to sustainable outcomes for both the • PROACTIVE STAGE – company leaders define the custom-
organisation and its stakeholders. er experience and their employee and community/environ-
mental goals and practices and set minimum requirements.
• SUSTAINABILITY STAGE – company leaders transition to a val-
Unfortunately, the world has changed – and that education is no ues-driven, sustainable business strategy that serves to drive
longer relevant.”3 social and economic benefits for the organisation and its con-
However, marketers are not the only ones who must grapple sumers, employees, shareholders, and the greater community.
with the demands of digital transformation which permeate
all levels of the enterprise, as Capgemeni Consulting notes on The speed and movement between stages is affected by
the “digital transformation” section of the company’s website: competitors’ changes, consumers and employees’ challenges,
“Although the impact of digitisation is not new, the digital and company crises. For example, the Barclay Group UK Wall
economy is entering a new age that presents unprecedented Street scandal forced the bank to transform its company culture.
challenges for all CEOs. Digital tools are invading the busi- After the impropriety, Barclay’s new CEO Antony Jenkins said
ness environment, provoking significant changes in the way the bank would commit to the five values of respect, integrity,
we work, communicate, and sell. This has given rise to new service, excellence, and stewardship. “We get it. We are chang-
opportunities and challenges, and has triggered the Digital ing the way we do business, we are changing the type of busi-
Transformation of enterprises.”4 ness we do and we are setting out a new course.”7
On a strategic level, the transparency and mindset of the
digital age is challenging the C-suite to reconsider busi- Digital Transformation: Preparation
ness outcomes in the broader context of creating social value.5 Digital transformation is the impact of digital on the organisa-
According to the 2012 Edelman goodpurpose® study, 87% tion. Digitisation transforms the organisation on three levels:
of consumers worldwide want business to place at least equal • EXTERNAL – The customer experience or the external com-
weight on society’s interests as its business interests. And in the munications of the organisation.
digital age it becomes increasingly clear when a business does • INTERNAL – The business operations, or the internal com-
not do that. Former President Bill Clinton suggests that “In the munications and decision making of the organisation.
future, corporations will care less about maximising profits and • HOLISTIC - The entire organisation; therefore the transfor-
more about employees and society.” mation strategy must be holistic and inclusive of all business
segments and functions.
The Digitally Integrated Organisation
In the global marketplace, three forces are converging to trans- In recognising the disruption – i.e. the challenges and op-
form the organisation – core values, digital technologies, and portunities – of the digital marketplace, the C-suite needs to
sustainable outcomes (for both society and business). prepare their executive team, and ultimately all staff, for the
Core values are commonly held as the foundation of many step–by-step transformation of the organisation. In truth,
an owner’s business philosophy. However, all too often they many top executives are not prepared for the tactical chal-
never go beyond a framed list on an office wall or an “about us” lenges associated with organisational digital transformation,
page on a website. By contrast, a transformed organisation in- such as how to properly combine digital technologies with
tegrates and activates its core values through its strategic plans core values and business goals to create integrated digital
and operations. marketing (IDM) strategies that optimise business outcomes
We suggest that the truly transformed organisation will have for all stakeholders.
the characteristics of a Digitally Integrated Organisation (DIO). Managing digital transformation includes a total re-exami-
The DIO integrates digital technology and marketing strategy nation of an organisation’s business model, from how it is de-
with core values to drive organisational goals that lead to sustain- signed to how it operates and implements. As global search
able outcomes for both the organisation and its stakeholders, in- and advisory firm Forrester reports in its Six Steps to Become
cluding the greater community to which it is connected. a Digital Business, “You must think of your company as part of

64 The European Financial Review December - January 2015

Blueprint for Digital Transformation integrating core business values across
the entire organisation. All of this will
Path to Digital Strategic Priority Action Strategies help in achieving the eventual goal of
Integration developing a sustainable and competi-
MINDSET Determine vulnerabilities/ Digital audit
tive organisation.
opportunities
Digital Transformation:
Agree on values and goals Values clarification/ goal
(C-suite) prioritisation
Implementation
Once the C-suite has determined its
Adopt a digital mindset Digital mindset and culture - priorities, it needs to develop and im-
company manual
plement action strategies that have
Design digital vision and strategy Digital transformation strategy agreement from their executive team and
– communicate the vision across buy-in across the organisation. Digital
organisation
transformation is not a linear progres-
Prepare Digital Leaders Digital preparedness training sion; the leadership team must respond
to the challenges of the competitive en-
Digital Acceleration teams vironment and the needs of the organ-
MODEL Rethink business model and CX Lean canvas isation by implementing select action
strategies that reflect digital transforma-
Apply Digital Involvement Cycle tion best practices.
STRATEGY Integrate values into strategy Internal and external
across silos communications audit Managing digital
Apply IDM Strategic Analysis transformation includes a
IMPLEMENTATION Acquire digital integrators Talent Management total re-examination of an
Launch digital skunkworks Digital Innovation Unit organisation’s business
projects
model, from how it
Monitoring and Evaluation
is designed to how it
IDM Strategic Model operates and implements.
CX/DIC/SCRM
After completing a digital transforma-
Align organisation Organisational structural change
tion assessment to ascertain where the
Multigenerational collaboration organisation is on the journey to becom-
ing a DIO,9 the next step is to ensure that
SUSTAINABILITY Develop sustainable and SROI; Sustainability audit
executives across the organisation agree
competitive organisation, i.e. and benchmarks
Digitally Integrated Organisation on a set of core values and business goals
that will inform a comprehensive digital
transformation strategy. Once the execu-
tive team has agreed upon such a strategy,
a dynamic ecosystem of value that con- areas of vulnerability and high risk in it must be rolled out across the organisa-
nects digital resources inside and outside the organisation, and then by adopt- tion. A good way to ensure the whole of
the company as needed to compete. You ing a digital mindset to tackle those the organisation is aligned to this strategy
must harness digital technologies, both to areas. At this stage, it is critical to have is to develop a company manual outlin-
deliver a superior customer experience C-suite agreement on values and the ing the new digital mindest and culture.
and to drive the agility and operational definition of social return-on-invest- More process-orientated steps should
efficiency you need to stay competitive.”8 ment (SROI). Doing so better enables then be taken, like digital leadership train-
The first step is to set priori- the executive team to design a digital ing and business model adjustments.
ties. This can be done by determining vision and strategy that is conducive to Examples of the latter include the Digital

www.europeanfinancialreview.com 65
 Management

Involvement Cycle or the Lean Canvas savoured, sometimes faster. Always full
method.10 At this stage talent management, of humanity.
which encompasses internal training as • OUR NEIGHBOURHOOD – We can be a
well as talent acquisition, is a strategic force for positive action – bringing to-
imperative. And arguably the most impor- gether our partners, customers, and the
tant step is the research and development community to contribute every day.
phase, which relies on small but scalable • OUR SHAREHOLDERS – We are fully
skunkworks projects and pilot programs accountable to get each of these el-
implemented by cross-functional Digital ements right so that Starbucks – and
Innovation Units to help further along or- everyone it touches – can endure
ganisation-wide digital transformation. and thrive.
The executive team can use the five-
step Path to Digital Integration to serve as Starbucks has been very successful in
the overarching framework to develop and integrating its core values with leading
implement an actionable blueprint for or- digital marketing technologies and strat-
ganisational digital transformation:11 egies – a key characteristic of an emerg-
• Mindset ing DIO. The company has succeeded
• Model in creating the unique “Starbucks expe-
• Strategy rience” both in store and online through
• Implementation its commitment and innovations in social
• Sustainability and mobile media. It has made digital in-
novation an integral aspect of its oper-
Case Study: Starbucks Coffee ational strategy in order to improve the
Starbucks has been a leader in integrat- customer experience.13
ing core values, digital technologies, and Starbucks has also shown an ability to
sustainability into its business strategy. As translate its values and mission into re-
such, Starbucks provides an apt case study al-world actions that serve its employ-
of a company striving to make the transi- ees and the greater community. In June
tion to a DIO. of 2014, the company announced it will
Customer experience is the focal point provide free (online) college education
of Starbuck’s business strategy. “The value from Arizona State University for all on how they can address the challeng-
of creating a superior customer experi- employees working 20+ hours per week, es of digital transformation within their
ence is not just in what it will get you in even if they subsequently launch new respective organisations. To do so, they
return. There is also value in the quality of careers or find a new job.14 Starbucks must develop a digital mindset and learn
your creation.”12 CEO, Howard Schultz, wants to shift how to incorporate digital technologies
This is the standard lived by its em- the conversation to treat a college ed- with core values in order to achieve sus-
ployees as they go about their daily busi- ucation as an employee benefit (like tainable business goals. Though in outline
ness; a set of principles that reflects the Starbucks did with health insurance for form only, the aforementioned Blueprint
company’s core values: part-timers). Realising that an educat- for Digital Transformation provides a
• OUR COFFEE – It has always been, and ed society benefits all, his plan dem- clear roadmap for leaders to evaluate pri-
will always be, about quality. onstrates “the role and responsibility of orities and translate them to action.
• OUR PARTNERS – We always treat each a public company” at a time when ed-
other with respect and dignity. And we ucation matters more than ever and “so
hold each other to that standard. many people are being left behind.”15
• OUR CUSTOMERS – When we are fully
Starbucks has made digital
engaged, we connect with, laugh with, Conclusion innovation an integral aspect
and uplift the lives of our customers – The speed and scope of change in our of its operational strategy
even if just for a few moments. global digital marketplace is a daily
• OUR STORES – It’s about enjoyment at reality. The leadership of multination-
in order to improve the
the speed of life – sometimes slow and als, SMEs, and nonprofits must reflect customer experience.

66 The European Financial Review December - January 2015

 The authors have recently collaborated on the book Digital
Marketing: Integrating Strategy and Tactics with Values:
Digital Marketing: Integrating Strategy and
Tactics with Values by Ira Kaufman and Chris
Horton is an easy-to-understand guidebook
for executives and managers that draws on the
latest digital tactics and strategic insights to help organisations
generate sustainable growth through digital integration. It pro-
vides a roadmap to adopt a digital mindset, incorporate digital
trends strategically, and integrate the most effective digital
tactics and tools with core values to achieve competitive ad-
vantage. Ira and Chris are consulting and offering trainings on
incorporating Digital into a company’s strategy. The guide-
book is available at Amazon and Routledge Publishing.

References
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Chris Horton is a Digital Strategist and Content starbucks-23-04.pdf.
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thousands-of-workers.html?hp&_r=1.
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www.europeanfinancialreview.com 67