Digitisation of business explained by Google

Digital technology is transforming business. Google’s Joris Merks works with companies to embed digital-first thinking in their strategies. He reveals the key dos and don’ts.

In association with Squared Online

What does digital transformation mean to you?

I look at digital transformation as a chain reaction of experiments that continuously helps companies to understand how to make the best use of new technology.

In this way they stay in tune with their customers, who are also using digital technology, keeping their businesses ready for the future.

What should the first steps be in a process of digital transformation?

It starts with a clear vision from company leaders of where technology is going and how that could affect the business.

Then these leaders need to give strong signals to people in the company about which challenges need to be fixed and a culture that rewards experimentation and entrepreneurship needs to be created.

Without this culture, people aren’t very likely to invest in new experiments. This is because any experiment with new technology is always more work and more risk compared to just doing what you always did. People won’t be willing to pick up more work and risk if there is nothing in it for them or if they might even risk losing their job or bonus when an experiment fails.

Should companies centralise digital functions, or should these be distributed across various teams / departments? What are the pros and cons?

I think it depends on the stage of development a company is in and on the type and size of organisation.

Companies with a digital-focused business model obviously should have centralised digital functions.

Smaller companies tend to have functions where digital and traditional marketing are embedded in the same teams.

Large companies that have heritage in the offline world and are in transformation tend to start out with specialized digital teams, which is good to make sure you ramp up fast enough. However, at some point in the digital transformation new and old teams must break through their silos because they are in the end serving the same customer and should provide a seamless journey across channels.

I believe eventually the differentiation between the two worlds will go away and all marketers will have a digital mindset. For the sake of ramping up fast it can however make sense to have a period where digital is a separate skill set in the organization.

How much of digital transformation is about technology and how much is about culture?

I’d say it is equally important and next to technology and culture there are also factors such as creativity, knowledge, organisational structure and strategic processes.

For example, if new technology arises, creative people are needed to find out what cool and useful things you can do with that technology.

The people that are our creatives and the people that understand tech are however often not the same type of people, so the art is bringing them together to come up with new ideas to experiment with.

The big trap with digital is that it can be treated too much as a technological development and that focus is a lot on data. With that focus, digital will always stay a specialism in the company and the company will never have a fully digital mindset.

There are many obstacles facing organisations as they examine new digital tactics and technology (e.g. legacy systems). How do you drive digital transformation in such an environment?

I think sometimes big tough decisions need to be made in many areas at the same time. That is definitely true for legacy systems.

For instance, brand and digital departments might be using different tools to manage their campaigns. That means you can never have a single view on the customer, which again means you can never be customer friendly in your advertising.

Someone then needs to make the decision to go for one holistic approach. That will require short term investments of time and money but is a crucial decision in order to be ready for the future and not lose your business in the long run.

Those decisions typically require strong leadership and vision. Without that it is very easy to keep focusing on those things that deliver you short term business without making the efforts needed to keep your long term business.

Which companies do you see as great examples of businesses which have embraced digital? What are the common factors in their approaches?

There are many such examples. I think the key thing they all have in common is strong visionary leaders.

If people we work with find they are getting stuck in digital transformation, that is almost always because the way they are incentivised, their targets, their bonuses and career opportunities are driven too much by short term business results.

Those are the companies that will one day get an extreme wake-up call because a new competitor will come out of nowhere with a new business model using new digital technology in smart ways and winning customers at high speed.

Where does data fit into digital transformation?

Despite the fact that I think the focus has been too much on technology and data, data definitely is becoming more important – no-one can deny that.

I always advocate the balance between data, mind and heart. Data to measure everything you can measure, mostly the proven successes so you can optimise them further.

Mind is needed to look ahead into the future, assess how your business may be affected by new developments and craft the right experiments to be ready for that future.

Data isn’t very good at helping you with that because data is always based on the past. Even when models make predictions they are always based on past data.

The heart is needed to recognise the moments when someone comes up with a great creative idea of something cool you can do with new technology.

On those moments you shouldn’t ask how much money you will earn from it. If the idea is fundamentally different from anything you tried, you can’t know. If, however, your heart starts pounding, that probably means it is a great idea worth exploring. You can bring the measurement in afterwards, but don’t kill the idea upfront due to lack of good data.

Download the whitepaper to learn how you can drive digital transformation in your business.

Joris Merks is head of digital transformation for northern Europe at Google

This article previously appeared on HRD Connect’s sister title ClickZ.

HRD Connect Curators of the New Business Landscape. HRD Connect produces industry-recognized content for senior HR leaders. Through articles, case studies, Q&As, podcasts, events, and more, we offer truly progressive and cutting-edge insights designed to help people leaders address core HR challenges and add greater value to their business.

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