Organizing for Digital Success

We digital agencies should do more to help clients build these new capabilities. Our visibility into many types of organizations gives us real-time insight into what’s working and, more often, what’s not. For this reason, savvy clients are increasingly seeking our advice as they consider how best to organize and manage the digital function. Most are hoping for a set of clear-cut best practices. But for such a young and rapidly evolving business discipline, obvious answers are few and far between. Defining a “correct” structure for digital requires a tailored solution that accounts for each organization’s unique structure, culture and existing practices. To date we’ve collected far more cautionary tales than genuine best practices, but looking across multiple industries and organization types, a few general patterns start to emerge. Specifically, in debating how best to structure for digital, we’ve seen many organizations get stuck on solving one or more intractable problems that are actually less relevant to long-term progress than they initially seem.

Here are five common pitfalls to avoid on the way to digital leadership:

1. Obsessing about ownership

Many organizations fret about which senior executive should “own” digital. Usually this comes down to the CMO or CIO. And while this is indeed an important, sensitive decision, we’ve seen that it can work both ways. The CMO versus CIO debate is a bit of a red herring, and if it goes on too long, becomes a dangerous distraction from the real work at hand. For most organizations, digital’s organizational home is ultimately less important than the strength, capability and cohesion of the digital team itself — regardless of where it resides.

Furthermore, in either scenario we believe digital should be more different from its parent organization than it is alike. In general, IT organizations value stability and security, while marketing emphasizes speed, creativity and customer-centricity. The ideal digital organization combines the technical capability of IT with the customer sensitivity and agility of marketing — without getting bogged down by the legacy mind-sets, processes or politics of either function.

At the end of the day, digital is best understood not as a subset of marketing or IT, but as a new, separate animal. With strong team leadership and an effective executive sponsor, digital can, in theory, thrive under either umbrella — depending on the specifics of the organization, of course.

2. Polishing the plan

As with the CMO versus CIO debate, most organizations spend an inordinate amount of time defining and refining their digital roadmaps. We love these roadmaps and consider them an invaluable tool for communicating long-term plans and aligning effort. However, we also know that technology moves quickly, and that today’s brilliant three-year roadmap may start to look pretty silly around month 17. Yes, it’s essential to have a plan to work and measure against. But it’s equally important to be able to track the market, react quickly and adapt as necessary. Over the long haul, the ability to support rapid deployment, testing and optimization of new experiences is far more important than perfect planning — and a far more important determinant of long-term digital success.

3. Chasing the shiny object

It’s unavoidable that as digital technology becomes more and more complicated, digital organizations become more specialized and functionally fragmented. The advent of significant new technologies often requires new organizational capabilities, and additional people to handle specialized tasks. Think about how social media has made social listening and influencer outreach must-haves. However, there’s a limit to the amount of subspecialization any team can afford to take on. More people means more management overhead — recruiting takes time, integration can be complex and specialists are always in short supply.

Instead of building sub-teams around every hot digital technology, smart leaders identify emerging capabilities that will be important in the long term, and find ways to bake these abilities into the broader team’s DNA. Sometimes, this may require adding new people; in other cases, new kinds of cross-training or smart partnering may be more appropriate. Bottom line — If you build your organization around long-term capability requirements rather than current trendy topics, you’ll be better positioned for long-term success (and won’t have to reorganize every time a hot new technology emerges).

4. Steering by committee

A surprising number of organizations still try to coordinate digital activity via cross-functional steering committees that only meet periodically. These are good forums for keeping multiple functions informed of digital trends and initiatives — and to solicit their input on relevant tactics, such as compliance policies. However, they’re not an efficient vehicle for establishing strategy or managing day-to-day operations. Think of them as the “C” and the “I” in a Responsible, Accountable, Consulted, Informed (RACI) chart — not the “A.” Digital teams need to move much more quickly and decisively than cross-functional committees usually can. So while it may be politically difficult to consolidate digital leadership under a single team leader or executive sponsor, the operational benefit is usually worth the pain.

5. Wallowing in legacy IT environments

Here’s an all-too-common scenario: The digital or marketing team wants to deploy a new platform or program, but can’t do so without changing or potentially destabilizing existing enterprise architecture. IT wants to help, but the needed changes are part of a bigger enterprise IT roadmap with multiple dependencies and competing priorities. The requested digital changes may happen this year... or they may not, depending on how budgets and other projects shake out. So the digital team gets stuck in an unwinnable tug of war with other enterprise priorities.

If this sounds familiar, the good news is you’re not alone. The bad news is, the only real way out of this trap is a fundamental replatforming that separates digital experience technologies from other enterprise IT systems as much as possible. For the most part, enterprise IT roadmaps are simply not fast enough or predictable enough to support customer-centric digital programs.

The key takeaway here is that technology architecture affects organizational effectiveness. Fortunately, there are ways to divorce the Web presentation layer from other IT systems, and to develop an applications layer and APIs that allow the digital team to quickly deploy changes and experience upgrades without causing harm to underlying enterprise systems with which they have to integrate. Creating this separation within the technology stack can be a difficult, painful process, but worth the investment. And without this kind of architecture running in the background, your digital team will be working at a competitive disadvantage right from the start.

So what does work?

Every organization is different, and the “right” answer for your business will depend much more on specific personalities and individual skill sets than on any theory of organization. All that said, we find most organizations need to do at least some of the following:

• Implement some greater degree of centralization for digital across the enterprise to better coordinate strategy and realize platform efficiencies.
• Improve connections between digital and the broader organization through effective cross-functional governance structures and enlightened executive sponsorship.
• Build a more balanced, integrated skill set within the digital team, encompassing both creative (marketing, user experience, design, content) and technical (presentation layer development, analytics) expertise.
• Find a strong, versatile, articulate leader to head up the digital organization.
• Allow C-level reporting (or at least visibility) for the digital team’s leader, in order to fully realize the transformative potential of digital as a growth driver for the total business.

In defining solutions for specific clients looking to maximize digital success, we analyze existing organizations across multiple dimensions, including leadership, structure, strategy, funding, roles and skills, processes, incentives and more. Our experience across multiple industries and companies allows us to offer an impartial, comparative perspective that often helps clarify and resolve long-running internal debates. However, at the end of the day, we usually find that defining an organizational plan for digital is actually the easy part. Implementing that plan successfully within an existing structure, culture, and business environment can often feel like the most challenging digital deployment of all. But for organizations truly looking to leverage digital for long-term competitive advantage, the rewards are worth it.