A few years back, I was working at a company whose French subsidiary ran a survey on “digital transformation.” The focus, as I recall, was on marketing departments and how “digital” they were or were not becoming.
To be honest, I found the whole premise puzzling. In 2013, who the heck hadn’t “gone digital” already?
I was reminded of that question when I saw a tweet from Deloitte’s Diana O’Brien which referenced her own “digital transformation journey” and pointed to a sponsored post – “Tech Fluency for CMOs” – that Deloitte had published in the Wall Street Journal.
That post recommended that CMOs “undertake a digital transformation,” illustrating that suggestion with the following quote from Ed See, principal in the technology practice at Deloitte Digital:
We are in the post-advertising age, and companies are becoming digital-first out of necessity. This requires an actual transformation, in which marketers are using technology, data, and analytics to reach their target audiences across all devices to deliver the relevant offer or call to action in the moment.
What Actually Needs Transforming?
To be fair to me, I’ve been reading (and writing and talking) about marketers “using technology, data, and analytics” to reach audiences and drive engagement for a long time. So, I still wasn’t clear on what, if anything, I was hearing here that was new.
I did some more digging and came across an article, “Strategy, Not Technology, Drives Digital Transformation.” It’s a lengthy piece (which you can still buy as a PDF) based on “The 2015 Digital Business Global Executive Study and Research Project by MIT Sloan Management Review and Deloitte.” A 2014 survey of more than 4,800 business executives, managers, and analysts from organizations around the world provided the original research for the study.
In the article, the authors write, “[Maturing] digital businesses are focused on integrating digital technologies, such as social, mobile, analytics and cloud, in the service of transforming how their businesses work. Less-mature digital businesses are focused on solving discrete business problems with individual digital technologies.”
In other words, digital transformation isn’t about how you improve or upgrade elements of your business using technology. Instead, it’s about how the capabilities of digital technology might be harnessed to make the business new.
To illustrate their point, the authors use an interesting example. With the help of a consultancy, a travel company discovered that employees who sit together at lunch exchange important information that helps everyone become more productive. They also found that this increased productivity actually rose with the number of people who sat together at any given table.
Finally, they discovered that the number of people who sat together was either 4 or 12. Why? Because all the tables in the cafeteria sat either 4 or 12 people.
This story offers a window into what digital transformation really entails. This travel company was able to use technology to analyze something they had not noticed but that had a measurable impact on their business. Thanks to this analysis, they were able to make a physical change – increasing table sizes to increase the number of people who sat together at lunch – that in turn improved operational performance.
In other words, they were able to achieve a strategic goal – increasing productivity – thanks to an innovative application of analytical technology.
What Does This Mean for Marketing?
I believe that my initial confusion about digital transformation arose because I had for many years worked for a company that prided itself on being forward-thinking when it came to technology. The leadership firmly believed that we should take every opportunity to leverage technology in order to improve productivity, increase the efficiency of operations, and, above all, make it easier for customers to do business with us.
That is, it was normal, as far as I was concerned, for a company to perpetually seek out ways to employ technology for strategic ends.
What’s more, for the last ten years I’ve worked in a function – marketing – that is heavily digitized. Not only that, I even worked at a company, MarketingProfs, that was, for all intents and purposes, a website. We had no physical offices. Everyone worked remotely and all our interactions took place through web-based tools. Work, there, was totally “digital.”
Given my experience, digital transformation struck me as something that had already happened, not something we had to plan for or pursue. And then I read something by Scott Brinker.
This past December Scott published a series on Disruptions to “Marketing” – Part 1 of which was devoted to “Digital Transformation.” Scott’s thesis is that, digital transformation is disruptive because it “redefines ‘marketing’ beyond the marketing department.”
Scott’s argument is interesting. First, like many others, he stresses that digital transformation affects the entire organization. He then points out that “digital” has been, traditionally, “the domain of marketing.”
Digital now, though, matters to the entire organization. As a result, Scott says, two operational possibilities have arisen:
1. Marketing and product effectively merge organizationally.
2. Product and marketing remain separate organizationally, with product owning customer experiences and marketing’s scope contracting back to communications.
When discussing the latter possibility, Scott puts forth an intriguing proposition: What if marketing underwent the same “democratization” that IT has gone through?
That is, what if every function could manage its own marketing the way every function currently manages its own technology (often acquiring technology with no input from IT whatsoever)? Think about it: Would that be “good” for marketing as a discipline? Or would it be the end of marketing?
Digital Transformation and the End of Marketing
Call me naive, but when I first got into marketing, I was told that this discipline had four mighty pillars: product, price, promotion, and place. Call me double-naive, because I then worked for a company for which marketing was (and remains) almost exclusively “promotion.” (Product there was more or less the purview of the CEO/founder, while price and place were covered by sales.)
In other words, I had been taught that product belonged to marketing, especially when “product management” – as in, owning the P&L of a product – was explicitly a marketing role. My experience (in the B2B world anyway) has shown me otherwise: that marketing is there to serve product (and, by extension, sales).
The problem for marketing in this scenario is this: When marketing becomes a service (and many marketing capabilities are already purchased as services), “marketing” ceases to be a unique and valuable thing. No longer considered a source of differentiation, marketing merely becomes a cost to be managed and a process to be optimized for efficiency. (Question: Should “efficiency” be the hallmark of a great marketing department?)
It’s happening already, Scott says, with this approach to marketing “more common in digital natives, who created and grew their digital products outside of the marketing department to begin with.”
Can Experience Save Marketing?
What about the other alternative: a world where product and marketing converge (or, as I like to think, return to their original Four Ps state)? Scott sees this development in companies where the CMO “explicitly owns digital commerce or customer experience.” He also says you see this in companies where either a Chief Digital Officer or a Chief Customer Officer “orchestrate” customer experiences.
If marketing truly “owned” customer experience – from capturing the voice of the customer to the actual orchestration of customer experience – I would feel more optimistic. As a discipline, marketing should be best positioned both to understand the types of experiences that customers want and to drive the creation of those experiences.
Unfortunately, I see the trend going the other way. With the spreading digitization of the marketplace, engineering, as the master of product, has led the way. From an engineering perspective, customers (users) should be the domain of the human factors people and the user experience (UX) designers. As a result, in a world where product is pretty much divorced from marketing, the UX people come to own the voice of the customer.
And from the UX perspective, with their intense focus on the user, “marketing” is the last thing they are looking to do. (The disdain that product and UX people have for marketing has not been lost on me over the years.)
Death and Transformation
Having seen this happen with my own eyes, I gave a talk in 2015 at MarketingProfs’ B2B Forum telling marketers, “What You Don’t Know About UX Might Kill You.”
In that talk, I outlined the trend I was seeing and told the audience (consisting primarily of marketers) that, if they wanted to continue to have any strategic influence, they must become more like UXers, especially when it comes to listening to and learning from customers.
I realize now that I was talking then about what digital transformation actually means for marketing. As the Deloitte/MIT study shows, true digital transformation is not about using technology to solve more and more organizational challenges. Instead, digital transformation involves figuring out how technology can be used to transform the business (or, in this case, the business function) itself.
Marketing as a service – that function that sends out emails, builds and maintains the website, and produces product-related content – assumes that the marketing function is, essentially, a kind of technology. As a result, the goal is simply to find more and more innovative ways to make it efficient.
Focusing on efficiency in marketing, in this way, leads to the marginalization of marketing. Focusing on the customer and the customer experience, on being the the advocate and collaborator with the customer, makes marketing a core function.
The question, however, remains: Are those companies where “product + UX” has already relegated marketing to a “service” a window into the future? Does “digital transformation” means a dissolution of marketing proper, its disappearance as a critical, differentiating function driving business goals through customer insight?
I tend to think so. What do you think?