If you’re on the marketing or planning side, and are wondering how this at all applies to you, you should read the first part of this two-part series on how digital strategy translates into digital execution. In the short term, this is about building things, something marketing traditionally isn’t concerned with. But in the long term, this is really about money and making smart business decisions. Building strategically means that you’re building competitive advantage by creating better digital experiences that last longer and are more adaptive to changing consumer needs and market conditions.

Because of our vantage point as digital strategy consultants, we get to see a lot of companies right at this crossroads – facing seemingly small decisions whose full context and consequences are not entirely defined, and at a risk of cornering themselves down the road because of it. Our hope is that that this list will help to shed some light on a few of these treacherous decision points.

It is by no means an exhaustive or definite list – attempting to pen a comprehensive collection of generally applicable, yet sufficiently directional, guidelines for applying strategy to the implementation of digital systems would be a Sisyphean task. In fact, we welcome any and all suggestions for edits and additions. 

A MANIFESTO FOR SUCCESSFUL IMPLEMENTATION

DESIGN FOR FUTURE NEEDS AND TECHNOLOGY

1. Build for current and future web standards

• It’ll keep your solution sustainable. Platforms and technologies that don’t fall under common web guidelines and standards (like the HTML5 predecessor Adobe Flash) are at a risk of being phased out and abandoned by the design and development communities as their popularity wanes. They are met with less support and maintenance and incur higher costs as developers and agencies charge more for longer and more complex production cycles. We’re not absolutist here; there are times when older and less buzzed-about technologies are the appropriate tool for the job. Their application however relies on attributing little dependence to them, in accordance with sound system design principles.

• It’ll make your solution recombinant and adaptive. Building with standards in mind will leave you with something that plays nicely with other Internet things, such as API:s, the communication interfaces of other Internet platforms and services). More importantly, products designed for web standards can also be used by the most number of people in the long run as consumers upgrade to modern, standard compliant, digital devices and web browsers.

2. Build for tomorrow

• Your business might have changed by the time you’re done. Implementation can easily take up to six months or a year – you’ll be better off planning ahead (just make sure you’re being reasonable) and designing for the needs you anticipate at that point in time. Does it seem like mobile will account for a significant share in traffic by the end of the year? Strongly consider designing your digital execution to be accessible via mobile devices – even though no one else is doing this (yet).

Building strategically means that you’re building competitive advantage by creating better digital experiences that last longer and are more adaptive to changing consumer needs and market conditions.

3. Design for scaleability

• It’ll enable you to minimize growing pains. Make sure you’re not constraining future growth by anticipating what is required to scale your product and its associated operations. Prepare a parallel path of production to ease a future switch between platforms or technologies. If you’re a small brand who is only getting started with eCommerce, you’ll do just fine investing in a light and externally hosted turnkey storefront. If your new initiative proves successful, you can start planning for an upgrade to an enterprise solution and know that the transition will be relatively easy. Cloud computing services and cloud-based products are great for this, because they generally charge only for what you need and consume.

DON’T BE AFRAID TO START FROM SCRATCH

1. Don’t compromise your future because of previous investments

• Avoid sunk cost fallacy. This is one of the most treacherous aspects of investing in digital tools and services, because it is so difficult to realize and acknowledge. Defending previous investments is a natural instinct; when we remember the effort and emotion we put into creating something, we’re hesitant to throw it to the side, even though it might have outlived its usefulness. In fact, as psychologists Kahneman and Tversky proved, the more of ourselves we invest into something, the harder it becomes to abandon; loss has a more powerful effect on our minds than potential gain. But poor, previous, investments can hamper progress, leaving the field open for competitors to speed ahead.

• …But beware of incurring Technical Debt. This is a fairly advanced concept which we won’t explore further in this piece. In short, technical debt describes the impeding consequences of rushing into new investments before completing necessary preceding work. It’s an idea that is crucial for any organization maintaining its own codebase to be familiar with.

2. Adapt solutions for your needs; don’t adapt your needs around available solutions

• What works for others may not work for you. Every business is unique. Your starting point should be your very own set of needs and capabilities. Evaluate prospective solutions against that.

• Avoid swiss army knives. They’re the most dazzling alternative – all of those cool features! – but do you really need all of that stuff? Do you have the knowledge and resources to maintain a more complex solution than what your actual needs call for? 360-degree solutions are the equivalent of doorman buildings; they come with common areas, lobbies and a lobby attendants, gyms, live-in supers, and the doorman, of course. A non-trivial amount of your rent is going towards covering all of these fancy things – but how often will you really use them? Figure out what you need your investment to accomplish, then find someone to help you either build or give you advice on what to buy that is exactly that and nothing more.

3. Open Source FTW

• The sky is the limit. With the explosion of open source technologies, platforms and services, there’s no longer any excuse to default to buying licensed out-of-the-box solutions anymore. WordPress for instance is an incredibly versatile web platform that is free. By compromising to handle custom development and dedicated support yourself (or hiring a partner to help you), you’re getting all of that versatility for free, without crowding your platform with features you don’t need. WordPress, and open solutions like it, are like Mr. Potato heads: they provide a well-defined, functional core solution that can be enhanced by innumerable add-ons, provided by a huge and vibrant online community of designers and developers.

4. Don’t outsource control

• Think twice about licensing solutions. Licensing a product or service might sound like a good idea, but you could find yourself in a situation down the road where the vendor’s maintenance isn’t on track with your business needs or with your category standard. You’ll be effectively tied to the grace and capability of your vendor for the remainder of your contract. You might also become blindsided to problems that your vendor is having, because you’re in a relationship with them and have already invested a significant amount of money (see “1. Don’t compromise your future because of previous investments”).

PARTNERS, NOT VENDORS

Digital Production is Collaborative.

• Avoid “Shiny Object Fallacy”. Our last piece of advice is perhaps our most important: Do your best to find a trustworthy, capable partner to help you realize your vision. Undercurrent Production Director Matthew Carlin addresses this topic expertly in a separate blog post.

This post was written by strategists Joanna Beltowska (@jbeltowska) and Vladimir Pick (@vladimirpick) who both come from a background of software and web development. 

Before I joined Undercurrent as a strategist, I worked on the production side at an eCommerce solution startup. We were a team of seven when I started and had grown to 12 by the time I left – being such a small business, everyone had to pitch in on everything. By the time of my departure, we all had at least some experience doing front-end and back-end development, sales, support, training, design and project management. This gave us a holistic frame of reference for thinking about how to design, build and maintain web properties, and it helped our team develop an internal toolkit of processes and tricks, ranging from code hacks to standardized design templates to automated scripts that enabled us to make custom configurations in one click. We found ways to operate smarter on the executional side that ultimately made our clients smarter and better on the business and consumer side. Even though we were detached from our clients’ long-term business decisions (we were only looped in once our involved had been justified by those decisions), we did apply real strategy to our end of the process.

Now working on the other end of the process with planning and strategy, I’ve realized that there’s a commonly held misconception among marketers – the people who control the lion’s share of the world’s digital brand budgets – that strategy ends where implementation begins, or rather: that the key to a successful digital execution lies in the preceding research and planning, and not so much in the execution itself.

“Digital” Needs a Holistic World View

Marketers tend to either gloss over the implementation phase, or obsess over magic pill partners. The former find it not to be as sexy or as exciting as the hunt for The Big Insight – or as much fun as planning for how the experience will be grown into a huge success with the help of the right media buys, brand fans and social media efforts. The latter assume implementation is mysterious, and fear change once things have begun. Marketers don’t make things; that’s a responsibility that falls on the IT department or on a partner agency. But digital strategy cannot be confined to one department, just as it cannot be confined to a single stage of the process that moves a product from conception to something real in the hands of people. That’s why strategists and marketers need to be at the very least conversant in the basics of digital technologies, so that when the time come to choose a production parter, a meaningful discussion can be had about the best executional solution (my colleague Matthew Carlin has written cogently about this).

Theory and Practice are Linked

In a perfect scenario, every tactical execution ladders up to the grand strategic vision. The best strategists know that there’s a very real risk of becoming handcuffed by seemingly insignificant decisions made early on. They know that digital strategy starts with theory: our collective knowledge and experiences help us formulate a set of assumptions and hypotheses about how the world works and how the thing we’re creating fits into it. More importantly, the best strategists also know that strategy is integral to successfully translating a hypothesis into practice. How well you manage that transition is what determines the ultimate effectiveness of your strategy.

Successful digital initiatives rely less on our skills as thinkers and analysts alone, and come as much from our skills as tinkerers, orchestrators and evaluators.

The idea of linking theory and practice is by no means a new one – indeed, it has its own philosophical practice, Pragmatism, focussed on the process of separating intelligent practice from uninformed practice. The intelligent part comes by extrapolating theory from practice, and reapplying it back again – simply speaking, using past experiences to derive a set of guiding principles for future action (and this, in turn, resonates with the increasingly iterative nature of software development and the need for businesses to be nimble and adaptive in a world that is quickly growing more connected and complex).

Thus, successful digital initiatives rely less on our skills as thinkers and analysts alone, and come as much from our skills as tinkerers, orchestrators and evaluators. A first-hand experience with any of these things – be it a previous career as a web developer or technical project lead, maintaining a blog as a hobby or building iPhone apps at your kitchen table after getting home from your “real” job – will make you a better digital strategist. Seeing the process through from start to finish from research to strategy to implementation to maintenance and evaluation will make you better yet.

These things may seem trivial (anybody can write a blog right?) or irrelevant but they provide us with a profound intuition for what works and what doesn’t. That’s why we welcome and encourage people at Undercurrent to make things for and with the Internet (be sure to check out Numblr, our most recent project). Practical experience instills in us a wider arrange of perspectives and techniques to apply to complex, digitally centric, problems (Ben Malbon captures this nicely in the concept of the T-Shaped person), and enables us to make smarter decisions at all stages of our work as strategy consultants.

Continuing on this theme, tomorrow my colleague Vlad and I will be sharing learnings we’ve found valuable in our most recent work that we’ve embedded from previous experiences working in software and web development. I hope you’ll come back for part 2.

At the time of the Revolutionary War, it was common for armies to engage on open field, with three or more rows of soldiers volleying rifle fire at the opposing force. The other army had little choice but to endure it, while they attempted to improve their position and prepared to return fire.

One key reason for this counterintuitive behavior was the nature of the weaponry itself. The smoothbore military musket was not a terribly accurate or speedy device. Variance at 50 yards was up to 18″ and a trained company could only fire about four times a minute. Effective use required them to engage at close range and as a united front, taking turns firing while others reloaded. This was surprisingly effective, compared to other methods of the day.

Redcoat digital worked similarly well when categories and competitors were clear, and barriers to entry were significant. Yet, today the battlefield is crowded with armies of various shapes and size, all coming at the user from different perspectives. It’s effectively a melee. Think Skype vs. AT&T vs. VOIP – Paypal vs. Square vs. AMEX – iTunes vs. Spotify vs. Amazon. With this much action on the field, it’s impossible to engage anyone head on (who should you face?).

For most companies, the appropriate response to this chaos is a decentralized approach. The people on the front line can see the bullets flying. They know the threats and opportunities firsthand. You must empower them to break away and try things. People often accuse Facebook of absorbing competitive features (and developers), but it’s important to recognize how adaptive and powerful this mimicry really is.

Standing still while your competitors innovate (and praying to survive long enough to fire back) isn’t a sustainable response to tumult in the marketplace. As idea-to-market-to-exit timeframes get shorter and shorter, the value of a 12-month delay can measure in the hundreds of millions or even billions.

Think about your digital products and services. Are they managed as standing armies? Or are they cut loose like a scrappy militia? Perhaps there exists somewhere a healthy blend of the two – an organization that knows how to move as one when the strategy demands it, and how to find the edges when the way forward is unclear.

Atten-hut!

1. Create a global system

In the past six months, we’ve gradually moved from working with a local server for our files to using Dropbox. We can now access and share project work regardless of physical location, device, time, or work environment. Shifting from a localized technology to a globally-enabled solution has drastically cut down time spent on unnecessary communication and manual synchronization – creating small-scale efficiencies is sometimes dependent on thinking globally.

2. Plan scalable solutions

When we recently created a new online research tool, we built it on a cloud environment. The tool tracks the online behavior of web users, and with a click of a mouse, we are able to expand its “capacity” to accommodate anywhere between 1 – 200 research study participants. Rather than having things like sample size dictating significant (and potentially expensive) maintenance needs, we made scale a part of our plans. Adaptivity, or the ability to respond nimbly to future needs characterizes successful companies.

3. Design fail-safe systems

Cloud computing systems often have safety features in place. Creating a fail-safe system doesn’t mean building something that never fails, but building a system that responds to problems in a way that prevents issues from spreading and does not affect other parts of your project. If a cloud system is getting close to overload or technological failure, there is likely a system of alerts and way to reallocate resources dynamically. This lets the show go on and makes problem solving much more straightforward.

4. Create systems that lower costs (and deliver more value to customers)

Integration and scale help drive efficiency – sharing a distributed, decentralized pool of resources bypasses creating and maintaining costly infrastructure. Additionally, cloud computing lowers barriers to entry: no major initial investment and less technical expertise is required to set up and participate in the system. Now shortcuts allow businesses of all sizes to become more competitive and deliver more value to their customers.

5. Learn to share resources

Cloud systems are designed to automatically allocate idle resources where they are needed most. Computing power is liquid and homogeneous, and constantly adapting systems direct the flow of resources to where they can be used most effectively. At the same time, many smaller independent processes can exist on the same physical machine. Organizational planning is meant to help with that; companies could achieve more if they found a way to effectively use each employee’s time by applying their best skills and resources whenever they are needed. Coordinating at the project level to share resources requires a degree of central planning, but the extra effort should be well worth it in efficiency gains.

6. Facilitate Internal Communication

Cloud systems are built with robust APIs (application program interfaces)  that facilitate communication between discrete applications and servers. In a broader sense, cloud computing facilitates infrastructure convergence. Bundling multiple IT components (servers, data storage devices, networking equipment, etc.) into a single computing solution makes it easier to create efficient and robust computing solutions. The business lesson here: be ready to deploy cross-functional teams to a wide array of projects, and establish clear and open communication channels to take advantage of your specific mix of capabilities.

7. Monitor Performance

The performance of servers and applications developed in cloud environments can be closely monitored. Engineers often design systems that allow them to pinpoint anything that’s broken within minutes, even down to what application code is slowing down the system. Laying out objectives and measurable outcomes at the start of a project will help you guide efforts. But in order to be fast and nimble when executing any project, you need to strive for real-time measurement that enables insightful analysis about the performance of projects. This gives you fair warning when it’s time to upgrade your process to respond to changes and challenges.

This blog post was efficiently co-authored in the cloud by Joanna Beltowska and Vladimir Pick with Google Docs.

Companies that will succeed in digital are those that can adapt – not only respond to changing conditions, but respond to the pace of change necessary. Key to adaptation is a focus on experimentation, no matter what your innovation strategy is, and experimentation is made sustainable by identifying and pursuing survivable risks. As Tim Harford notes, successful businesses and industries are built on failure and fumble. “Trial and error is a tremendously powerful process for solving problems in a complex world,” he writes, a statement that is intuitively true, but which many have trouble embracing because they’re scared of failing big. But by identifying survivable risks– risks that won’t bankrupt the business, destroy the team, or decimate the market you’re playing in– and encouraging early failure, weak ideas can be weeded out and successful ideas brought to the surface to be copied and built upon.

One way to take survivable risks is to focus on developing the minimum viable product (MVP) – the smallest iteration of your idea possible to test the validity and viability of your idea. Anthony Panozzo has a great post discussing the value of the MVP and outlining some of the challenges in designing one. Panozzo notes a lot of what is discussed as minimum viable products in the software world really aren’t because they’re not designed specifically around learning anything. The key to the usefulness of an MVP is you can validate the risks with a new venture or idea and really learn from its potential success or failure. To that end, the design of your MVP should be purposeful and aim to:

1. Help you test risky assumptions
2. Enable you to collect as much validated learning as possible about your users with the least effort

An MVP can be a paper prototype or a Facebook survey just as easily as an actual product – anything that helps you test a hypothesis and provides you with meaningful feedback about the direction you’re taking. (We can discuss meaningful feedback another time. As Harford points out in Adapt, knowing when you’re failing is a difficult thing).

We can see a great example of this in the process Tim Malbon outlines in his discussion of the Picle launch at SXSW this year. Picle is a camera app that captures a short snippet of audio when it takes a picture as a way of capturing a snap of the moment, mood, timbre, and flavor of the moment when you took the picture. Malbon discusses the way the Made By Many team evolved two feature sets in designing the app – a launch set and a set they stored in the “Icebox.” The launch set was the set of features that would establish the core functionality of the app, and which would allow the team to work out whether the entire project was viable. These were the features that defined the minimum viable product. By focussing on a core set of features and building a minimum viable product, the team was able to quickly get something out the door and establish a feedback loop with their users. Moreover, by staying lean, in their own words, by “deliberately building less” they were better poised for change once they got a sense of what was viable. As Malbon points out, “The leaner you are the easier it is to change.”

As we noted earlier, building an MVP is a process designed to allow you to put something out in the world and collect meaningful feedback about it. Panozzo outlines a few key questions to guide your design and maximize your learnings in developing an MVP, and they’re worth repeating here. If you set out to build an MVP, use these questions to guide your design and maximize your learnings:

1.  What are you trying to learn with this particular MVP?
2.  What data are you collecting about your experiment?
3.  What determines the success or failure of the experiment? (see his post here).

Thinking about the minimum viable product is “walk before you can run” thinking. Make sure you can do something before you head out into the world to try and do everything. By forcing yourself to think about what the smallest functional unit is of the thing you’re trying to build you’re automatically positioning yourself to adopt one of our favorite things: a bias for action. You’ll find the resolve, time, energy and resources to get something built by focussing on identifying the smallest, lightest most-minimum version of your grand wonder.

This post was co-authored by Joanna Beltowska.

At a high-level, we identified four broad structures for digital teams:

• Corporate Digital Strategy:
• Many clients, particularly large companies, have a senior executive directing digital, typically 1 or 2 degrees removed from the CMO. This VP or “Director of Digital” has a small team of 3-to-5 people who push out high-level strategy to the rest of the organization.
• Smaller clients often lack anyone with “digital” explicitly in their title. Consequently, the responsibility for digital strategy usually falls to someone in a senior marketing position (often the CMO). They rely heavily on the brand’s agency partners for support.
• Regional/Brand Digital Strategy:
• In large organizations, there is often someone from the corporate parent constantly interfacing or embedded in the regional or brand organization. In this case, the corporate parent desires best practice sharing among brands and among regions. In other cases, corporate interfaces on an ad-hoc basis with the rest of the organization. The regional/brand digital organization typically reports into regional/brand marketing.
• Digital Execution:
• Teams, staffed by Digital Marketing Managers, typically report to a senior marketing executive or Head of Digital. These teams usually provide execution (website management, email marketing, digital media and so forth) and agency management.
• Our clients predominately outsource development to agencies. Internal IT departments don’t have the skills and ideology to quickly (and beautifully) design consumer-facing experiences on the Internet. In rare cases, best-in-class brands have dedicated designers and engineers who work with digital and social teams.
• Social Strategy and Community Management:
• Most clients have social media or community managers within their PR, communications, brand, and advertising departments. This is contrary to reports that decentralization and shared-responsibility of social is common. Not surprisingly, quite a few of our clients outsource social to a marketing agency.

Absent from this summary are the tiny details, like team size, title, and rank. But even at a high-level, we observed little uniformity among clients. Naturally, a lot of the differences had to do with company size, digital needs, and budget.

We quickly realized that choosing the right structure wasn’t as formulaic as it seems. There’s a few complex, strategic questions worth debating:

Do I need a unique digital or social group?

Digital doesn’t fit neatly into a 3-5 person team. While it may seem like a serious step to appoint a digital team, it will invariably find itself touching groups such as operations, marketing, and products. In companies where social/digital sits laterally with marketing on the corporate hierarchy, we’ve observed conflicts around who owns decisions, projects, and even staff.

But if you look at the new breed of startups (Bonobos, Gilt, Fab, Warby Parker, to name but a few), you’ll find that digital-mindedness is implicit to everyone’s role. Percolate-founder Noah Brier really hits on this point in an ancient post that I recently stumbled upon:

“When the web came along and every company decided it needed a website, decisions had to be made about who was going to ‘own it.’ Problem was, it didn’t fit into the nice little boundaries that corporations were built around. If companies are traditionally structured vertically (silos) then the web is a horizontal medium, cutting across the business.”

It seems to me that the evolution for traditional brands will be forwards, then backwards: assign responsibility to digital so that someone can “figure it out.” Take it away once it’s been indoctrinated into company culture.

How do I organize corporate vs. regions/brand teams?

The biggest challenges for large, decentralized companies are how to scale resources and keep everyone up to date on the rapidly-changing digital landscape. Communication between digital teams at the corporate and regional/brand level is often weak, regardless of senior mandates, recurring councils, and weekly updates. Counterintuitively, corporate intermediaries often stifle communication.We’ve noticed some initial success with an organic, self-organizing approach, where decentralized teams have the capacity to work together beautifully.

How does my social team operate?

When it comes to social media, the best companies run a content development engine. While it’s easy to farm social content development and publishing to an agency, the cost (absurdly high) and quality of work (mediocre) suggest in-house social media teams (sometimes called community management) are a far better option. Such teams might look more like a media company than a marketing organization, with writers, creatives, and developers all working on an evolving content calendar.

Who should I hire to build X?

Traditional brands often struggle with development, lacking talent to build digital campaigns, platforms, and apps. But today’s generation of Internet-bred startups don’t have this problem, conceived with a technical founder, and consequently, a team of developers. This is why Fab doesn’t hire Crispin Porter to build an over-priced website for $1M. Everything is done in-house to Steve Jobs-levels of perfection. The big challenge for traditional brands is how to adopt some of this startup know-how¹. There’s no question that it will be critical for a digital team to have the right caliber of agile, web-savvy engineers outside of bureaucratic IT². And the cultural shift to a startup “always-be-deploying“ attitude will be far more challenging than the hiring. There’s a great story from startup mogul Eric Reis on his hiring requirements for IMVU:

“When a new engineer started at IMVU, I had a simple rule: they had to ship code to production on their first day. It wasn’t an absolute rule; if it had to be the second day, that was OK. But if it slipped to the third day, I started to worry.”

Perhaps that’s the big lesson: across our small sample set of 30 companies, brands that were awesome at making stuff on the Internet (often daily) also had sound organizational design. People were excited to come up with new ideas. They were not required to prove ROI for every execution. Legal didn’t care more than it needed to. And digital had a blanket green light to do amazing things.

–

[1] Forrester has a great study (albeit flawed) on how digital teams should make stuff for the web.

[2] Development teams reporting into IT have been an observable disaster.

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Some visuals from our research:

Two Approaches To Innovation

Innovation through acquisition is a well established practice. Many large companies rely increasingly on externally driven innovation. Apple integrated the Siri voice control feature into the iOS offered with the iPhone 4s after it acquired Siri Inc, the start-up founded in 2007 which developed it. Google too has a long history of snapping up interesting looking start-ups. Since 2001, Google has acquired 109 companies small and large, 26 of which were bought last year alone. Finally, Intuit’s 2009 acquisition of  personal finance tool Mint.com is a prime example of the value that can be attained through innovation by acquisition.

The alternative to this external strategy is developing and supporting an internal culture of innovation. Google’s twenty percent time, Patagonia’s policy of encouraging employees to volunteer for causes they believe in, and Nike’s Digital Sport group are all good examples.

Whether relying on acquisition or cultivating an internal culture, strategies to encourage innovation lie along a spectrum of risk. Encouraging innovation internally requires creating a safe space for trial and experimentation (a low risk activity), developing internal capabilities (moderate risk), and committing resources to support expanding new initiatives across the business (high risk). Successfully pursuing a strategy of innovation through acquisition likewise requires low risk activities such as the actual acquisition, and higher risk activities like seeding early stage companies and dealing with venture funds.

As the chart below indicates, however, the risks behind external innovation are structured differently than the risks associated with internal development. Internal innovation strategies encounter the most risk at the point of expansion, usually the final point in the process. External innovation strategies encounter the most risk in their early phases, when seed money can go nowhere and venture investments can earn small returns.

(Click to Embiggen)

Regardless of whether an innovation strategy is internally or externally focussed, risk remains a principal driver of how companies approach selecting investments. Companies are unlikely to pursue ventures either internally or as acquisition options that fall outside of their risk profile.

Risk And Maturity

As much as a company’s risk tolerance shapes its investment profile, commitment and maturity impact a company’s readiness to invest in digital. Mature companies can, on the one hand, commit significant resources (financial or human) to well-defined, robust digital initiatives. Some, however, lack the dexterity to adapt their practices to digital disruptions, leaving them uncertain about how to effectively capitalize on or socialize innovations through their organizations. Immature companies, by contrast, might not have substantial resources to commit but are supremely well-placed to experiment with small-scale digital innovations that may pay-off disproportionately if successful.

The framework below maps the spectrum of risk tolerance and maturity, and the steps of innovation (external and internal), in such a way that it can guide discussions and inform decisions around the focus of digital investments for the sake of innovation.

(Click to Embiggen)

When it comes to developing digital capabilities, there is no one-size-fits-all solution.  Risk is often overlooked in agency and consulting conversations – nobody wants to ask the difficult questions. Finding the right amount of risk in relation digital maturity is key to increasing your odds of success in digital. The right approach is all about context.

This post is part of an upcoming series that explores risk in the context of digital strategy. Questions or Comments? Connect with @vladimirpick on Twitter.

Robin Hanson of Overcoming Bias has an awesome article on consultants, young college grads, and snake oil (bolding mine):

“The puzzle is why firms pay huge sums to big name consulting firms, when their advice comes from kids fresh out of college, who spend only a few months studying an industry they previous knew nothing about. How could such quick-made advice from ignorant recent grads be worth millions? Why don’t firms just ask their own internal recent college grads?”

This is something with which I’ve struggled in consulting, first in branding and now in digital.

Hanson has a pretty good theory:

The CEO often understands what needs to be done, but does not have the resources to fight this blocking coalition. But if a prestigious outside consulting firm weighs in, that can turn the status tide. Coalitions can often successfully block a CEO initiative, and yet not resist the further support of a prestigious outside consultant.

To serve this function, management consulting firms need to have the strongest prestige money can buy. They also need to be able to quickly walk around a firm, hear the different arguments, and judge where the weight of reason lies. And they need to be relatively immune to accusations of bias – that their advice follows from interests, affiliations, or commitments.

All three of these functions seem to be achieved at a low cost by hiring good-looking kids from our most prestigious schools. These are the cheapest folks you can buy with our most prestigious affiliations, they are smart enough to judge where reason lies, and they have few prior affiliations to taint them with bias. They can not only “borrow your watch to tell you the time,” but can also cow you into submission in accepting that time.

I buy it for traditional management consulting. But does this theory hold for digital strategy as well?

Quite a few of my projects fall into the CEO-validation bucket. In these cases, Hanson is right: a consulting firm can catalyze change in ways that a small digital marketing team cannot. Any firm with a solid brand name (and an increasingly young team) will do, since the client doesn’t expect to be blown away.

But in most cases, no one knows what to do. There’s a ton of complexity with an unknown problem. Frankly, there’s a lot of making-it-up-as-you-go.

Digital strategy in an agency/consulting context is often staffed with the “good looking, smart-sounding young people” that Hanson references. Assuming they’re digitally savvy, the obvious answer requires just a hint of due diligence. Unfortunately, the obvious answer also seems foreign to anyone outside of the Internet-Twitter-Pinterest-complex in which too many young digital strategists live.

This superficial recommendation bothers me. After getting praised over and over for a brilliant idea involving (latest social network) to (group of people who don’t know what you’re talking about), it’s not hard to think that you’re a genius, accompanied by an inflated ego with the belief that you can solve a business problem better than a CEO with 40 years of experience.

A lot of the time, no one knows what to do. Unknown problems come with a ton of complexity. Frankly, there’s a lot of making-it-up-as-you-go.

This lack of discipline and rigor is independent of youth, visible from the 22-year-old-staffed-agencies and the 40-year-old-BigConsulting-with-no-cultural-experience as they peddle digital strategy wares. Making smart things (and decisions) on the Internet requires a different set of skills.

That said, the CEO is tackling a problem that’s a couple layers down from quantum physics complex. The self-anointed-digital-strategy-expert won’t hit the right answer after a couple of brainstorm sessions after reflecting on the latest Facebook app or shiny startup.

Something to think about: is industry/business experience critical for digital strategy? And if it is, why are most firms staffed by young people and no ex-McKinsey/ex-client-side veterans?

Bonus Q: If I wanted to hire the best digital strategist the US, what would he or she look like?

This post is adapted from a piece that originally ran at Matt Daniels’ blog.

Twenty years ago, building a national (or global) brand was a multi-year, multi-billion dollar proposition. And that’s not just because word traveled slower. Everything traveled slower. Today’s digital and social technology has ushered in new opportunities for brand building that operate under a different construct, defined by different expectations.

Despite these new opportunities and expectations, the four key traits of good brand remain the same. The best brands personify core values, offer unique experiences, are remarkable, and deliver consistency, consistently. Surprisingly, the familiar traits and patterns of great brands become more accessible (and more fragile) in a digital age:

1. Connecting your core values with a community. A great brand is driven by a set of core values. Knowing what a brand stands for, and seeing those values manifest in its everyday behavior, helps like-minded consumers create meaningful connections. The internet allows brands to find and connect with shared interest groups (communities that value the same things they do) in significantly more efficient ways. From MeetUp.com to Facebook, major platforms are bringing people with shared values together.
2. Creating an experience unlike any other. A great brand is noticeably different from its competition. In a world of choice overload and decision fatigue, brands need to take drastic action to stand out, particularly in categories where product parity is high. One area many brands have yet to fully explore is the digital functionality they add to their experience. The Weight Watchers iPhone application is a dramatic value add for a user. Every brand has an opportunity to exceed their category competition here, but only by evaluating their users’ unmet needs and going out on a limb to invent something new.
3. Finding out what is worth talking about. A great brand is remarkable. As Seth Godin has been saying for years, people talk about brands that are doing something worth talking about. The unparalleled transparency and immediacy of the web means that brand builders can (if they ask/listen) get an honest perspective on what is or isn’t remarkable about their brand and plan accordingly. The recent McDonald’s #McDStories Twitter debacle demonstrated that many people’s most remarkable story may not be a winner for the brand.
4. Delivering a repeat performance. A great brand experience is consistent, no matter the time or place. People come to count on their favorite brands as a bastion of reliable delight – note the almost cavalier certainty of the Apple fanboys waiting to buy the iPad 3 sight unseen. What’s amazing about the era we live in is that our collective timeframe orientation has been drastically shortened by technology. It is possible, through a series of smart moves in the digital space, to build an incredibly valuable and trusted brand in very short order – perhaps less than a year. It is equally possible to drive a massive brand into the ground just as fast.

What this all means is that your brand, any brand, is just a few months away from a major reputation boost. You can identify the audiences that share your values, listen to them talk about your brand or category to find out what’s worth talking about, develop a clear strategy for setting yourself apart, and make a series of quick successive digital investments that will dazzle your customers. We’ve seen State Farm take similar action recently, and the future looks bright for them.

Like most large institutions (and despite their best intentions), many museums have found themselves unable to adapt their value propositions, experiences and business models to address the complexity and constant change they face. Some appear frozen in time, while others try to change, only to be held back by old paradigms that constrain how they understand and deliver value.

Of course, not all museums are struggling. Many are experimenting with great success – be it in social, online video, mobile experiences or even virtual spaces. We love seeing the brazen tinkerers thrive. Unfortunately, they seem to be the exception, and may only be skimming the surface of opportunity when what they need is real digital transformation.

Museums should start by challenging head-on the assumptions they’re making that may limit their evolution. Some of the more problematic ones include:

• That museums are buildings
• That their role is to curate
• That the core experience they offer is passive
• That they must be constrained by geography

Regardless of what museum leaders think, each of these assumptions is being challenged on a daily basis by the digital behaviors of their most passionate patrons. The idea of a digital commons for museums has emerged, casual experts are bubbling up across the globe and, despite being urged to “not touch the art,” visitors can no longer suppress their desire to get in on the action.

With these assumptions in check, here are four provocations for our favorite museums to ponder:

1. Stop thinking of yourself as a building. The meaning you create extends far beyond the walls of your physical space. Start to think of yourself as a service – an enabler of connections between the patron and your area of cultural expertise. While your value proposition broadens slightly, the ways you deliver it expand enormously. Think online courses, interactive learning guides, content production, expert networks, wikis, and global partnerships with other institutions and experts in your cultural ecosystem.
2. Think outside of the visit. Museums spend plenty of time trying to build engagement, and not nearly enough to sustain it. The most critical moment in a visitor’s experience is in the hours after they leave. Think of every visit as a missed opportunity to create the foundation for a broader set of interconnected behaviors. Museums must re-orient as ubiquitous learners, and leverage momentum from peak experiences to establish direct, personal relationships that are continued after people leave. This means capturing permission to communicate, individual preference data and investing in event systems and CRM. (Check out Chicago’s Museum of Science and Industry SciPass for inspiration.)
3. Evolve from curation to co-curation (and connection). While curators (like film critics) can be forgiven for feeling threatened by digital, they’re missing an opportunity. The smart ones realize they belong to a broader network of people with expertise, and that they can play a crucial role in facilitating conversation and connection among that network. The museum’s credibility will help them attract and lead these communities of interest, resulting in more advocates.
4. Tone inside the museum = tone outside the museum. If you don’t cultivate interaction inside the museum, how can you expect it outside the museum? You’re great at inspiring visitors to think and feel – now it’s time to implicate them in the action. Traditionalists will argue this, but the truth is that expectations about museum experiences will continue to shift. This doesn’t mean you should let people rub their faces on a $100 million painting, but it does mean you should find ways for people to go home feeling like they were participants in something.

While digital can’t solve every challenge faced by museums, there isn’t one typical hurdle (e.g. funding, relevance, loyalty or advocacy) that can’t be met more meaningfully with a clear digital strategy. If museums can challenge their underlying assumptions about their role and embrace the emerging behaviors of their fans, they’re already half-way there.