CHAPTER 9

The Seventh Principle of Digital Business Strategy—Tactics

The first six of our seven principles involve analysis, investigation, or projection. The seventh is where we decide which tactics we will employ to reach our stated goals and with all the results of our analyses in mind. A tactical plan of action must be tailored very specifically to the results of the first six principles. To show how we create a tactical plan of action, we will examine the Leckey-Firefly Friends case study to illustrate how the information gathered in the first six principles and strategy created from this has translated into tactics.

Case Study 9.1

Established in 1983, Leckey is a globally recognized pioneer in the research, design, and development of clinically focused, posture-supportive products for developmentally challenged children. The company is owned by James Leckey.

Children who benefit from Leckey’s products have disabilities such as cerebral palsy, often suffering quite severe movement restrictions, and require specialist equipment to help them to sit up and move. These children require postural assistance, and James’ company manufactures wheel chairs that fill that need. Leckey supplies their chairs into the wholesale market via an exclusive contract they have with Ottobock, who supply worldwide. The only exception to this is the National Health Service in the UK, who purchase direct from Leckey.

We met James at a conference where I was doing the keynote speech on digital strategy and he approached me about the possibility of Leckey becoming a “digitally innovative business.” He was interested in the difference between doing digital and becoming a digital business as he saw the potential for growth in having a business where the digital elements were written into the business and strategies, merely than adding digital tactics onto their existing business. He also realized that his own business tended toward the latter—it was a business that performed digital tactics, with management giving pointers and encouragement to their digital teams and responding to changes as they arose within the marketplace. His company was striving for likes on Facebook and followers on Twitter, but wasn’t using any data or information to make strategic decisions.

Inspired by the realization that he was still performing digital business the old way, James decided that he wished to change to become a digital business. He decided to transform his business, change the practices and culture within his organization, and enable his business to become fast-paced and able to pivot and innovate.

James wanted to begin to cocreate with customers rather than just being customer centric. He wanted to give the management-specific direction and leadership, but understood that he didn’t have the knowledge required, himself, to get into the finer detail. He wanted to seek to create market disruptions. He could sense the market was stagnated and was ripe for change, and rather than face disruption he wanted to create market disruption.

He wanted to look at what the near-term business growth challenges were and help his team overcome them. He was interested in understanding the building blocks that allowed businesses to transform.

James understood that strategy was the starting point that would lead to addressing cultural issues and encouraging engagement within the organization, so that people could understand what the business was trying to achieve. He understood that this would lead to realignment of many of the departments and that there were senior executives that would need further education if they were to lead teams and break down challenges into more detailed projects and tasks. If the business wanted continued growth, James understood that agile innovation would have to become an essential part of the business and that agile innovation would require the business to collaborate with customers and third parties. This had never happened in his business. Innovation had always occurred internally, without the assistance of partners or customers. He understood that all things in turn would have to result in his senior leadership giving great direction to their teams, so that those teams could perform to the top of their ability.

Technology was simply accepted as being a part of the process. James accepted that it would be omnipresent throughout each of the stages of formulating his strategy and transforming his business. Using the Seven Principles of Digital Business Strategy, James and his team got their transformation rolling.

The first principle they tackled was “Know Yourself.” The diagnosis came quite easily—James realized that the distribution channel had his sales maximized; he was at the mercy of Ottobock and its distribution arm. The supply chain between him and the customer was beyond his control. Ottobock sold to primary care trusts who then recommended the products to therapists who in turn prescribed the products to the parents of children who needed them.

James’ business was coasting, and he had a desire for change. Despite having lots of ideas for innovation that he wished to test, the current distribution method he was using, and the market to which he was selling via that distribution method remained constrained. He liked the idea of running a digital, more modern business and had seen many of his other businesses succeed and enjoy growth, either through beginning as digitally innovative businesses or through transforming into digitally innovative businesses through effective strategy.

Eventually, through a lot of consultation and soul searching, the ambition became “to create a new market for direct-to-parent family products for children with disabilities.” To create a new market means there is no current market in existence. As discussed earlier in this book, this cuts out many of the moves within the quadrant. We cannot, for example, go straight to advertising or seek pay-per-click attention, because nobody is searching for a product that they don’t yet know exists.

James and his team worked hard on developing a value proposition. They looked at their internal and external value proposition before creating marketing messages and sought out their differentiator to make their value proposition unique. The first proposition they came up with was “we are the pioneers in early participation therapy for children with special needs, because we produce affordable, clinically excellent products, better than anyone else.” They arrived at this value proposition because they had always dealt directly with the medical profession. They always had to produce clinically excellent products, but upon contemplation they realized the new customer, when they were selling to parents directly, was not a medical professional. They needed another, more fitting differentiator.

Eventually, James and his team decided upon the value proposition “we are the pioneers in early participation therapy for children with special needs because we make stuff that involves the family in helping the child engage in life better than anyone else.” This softer language and focus toward the child was the guiding internal messaging that would help marketers and help other departments to understand exactly what its purpose was when the business was to move forward.

James had chosen the term “early participation therapy” in the hope this could be the new wave that his business could help create. It didn’t turn out that way. When he checked the market and entered the term into a search engine, he found that there were already many scholarly articles that used this term, which were already created and cited. This meant that James’ business could not create the phrase and dominate it in search engines, which meant that they couldn’t protect it. There were already heavily cited, referenced articles on the web that would likely trump James’ business if they went with this term for their wave creation and found themselves in a more prime status within the marketplace. “Family involved participation” was the term that James’ business eventually decided would feed their internal value proposition, after some market research.

Next, James looked at the customer. He decided that because he was creating a new marketplace, and therefore lacked existing customers to consult, he would collaborate with third parties to better understand what the concerns and needs of the parents and carers of children with mobility needs were in day-to-day life. Cerebra is a charity that helps improve the lives of children with brain-related conditions, and they helped explain all of the challenges that parents and carers face when they take children on everyday outings, like shopping, eating out, and playing on a park swing. James and his team set about working with Cerebra to come up with their first product. Since they were going to sell directly to parents, they could bypass therapists and the channel and didn’t need to be prescribed.

The first product the company came up with was the Goto seat, and they offered a 7 percent commission to Cerebra as an acknowledgment for their contribution in creating the product. The business set about the design and manufacture of this first seat, while the marketers set about creating right environment to sell product directly to parents.

When they looked at the competitors in the marketplace, the business realized there were no direct competitors, but there were many indirect competitors—other sites were selling products to parents for their child with special needs. Some had quite a large force, but few had the idea of production facilities. They were online retailers but weren’t able to adapt and create products should a new market entrant come in to play. Other competitors were too big to be bothered by a new entrant in a new marketplace. Each of the companies was identified as a threat and alerts were set up to monitor their activity, because James’ business understood that if they created market penetration, these other businesses would try to copy or move into the market. Defense mechanisms needed to be set up if the business was to achieve market dominance and become an authority or prime player.

James and his team looked at the engine of growth. While it would have been easy for them to go with partners in the attention category, they realized they had something more unique, which could gain them attention in their own right, perhaps even allowing them to traverse the X-axis and become an authority.

James went through his checklist of the 10 characteristics required for a business to become an authority and realized that his business had what it took. He decided not to go down the attention route, even though it would have brought a lot of easy wins early on. Instead, he decided to aim to become an authority. Once that engine of growth had been selected, it was time to set up all of the base camp tools—the processes, training, and tactics—that would be needed to enable the business to become an authority in the identified, emerging wave.

The business set about understanding staff training and culture. They also had to address a channel conflict, since they had an existing contract of exclusivity with Ottobock. They made technology choices, performed blogger outreach, and tested for demand. They sought peer review engagement, performed propensity to purchase modeling within customer sections, testing what the likely conversion of interest-to-purchase might be.

If the Goto seat was to become a seller and make good profit, the business would need to perform therapist inductions and gain the backing of therapists. They needed to understand what sizes of the Goto seat they were going to sell, and this information all had to come from analysis. In the early days of base camp, the business set out their “leap of faith” assumptions and identified the mile markers that would be required to get the business into a position to become an authority. Each of those mile markers was set and broken down into tasks.

The business knew it would eventually need to engage further with bloggers, find international speaking engagements to participate in, and so on, but it knew that all of these things were future potentials that would really depend on what happened more immediately. For this reason, the business did not dwell on the larger, future opportunities, but looked instead to its more near-term challenges. The challenges that needed to be solved immediately before the business could move forward.

To create its tactical plan, the business created a table that showed all the mile markers. Each of the mile markers broke down into projects and the projects into tasks. Each of the mile markers had an owner, so that the owner can oversee its completion, and each project was allocated to a senior manager.

One mile marker may require more than one project to be met. The projects may be overseen by different managers, but there is always an owner for each mile marker, and there is always an owner for each project. Once projects are defined, their overseers can then break them down into smaller tasks and allocate them to their teams. The teams are shown the vision and given understanding of the wider strategy. Major mile markers are shared with the teams in order that they can see the full vision for the company and understand what the business is trying to do and the part they play in it.

If the tasks are deemed to be true digital tasks, then empirical analyses are performed so the business can gather data to help them understand if the task has been accomplished to within the project’s required parameters.

The business set about getting some baseline facts and figures in play so the business could understand the starting point, with as little assumption as possible, before it moved forward. The more assumption can be taken out of the strategy (and thus projects and tasks) the better. Multiplying assumptions causes greater errors and creates more risk.

When James knew the near-term mile markers, projects, and tasks, he went to his board to seek the resources that were required. The resources required ended up being greater than either he or the board had initially anticipated and much greater than the board was prepared to sink into a test project.

James broke down tactical resources into time, talent, and cash. He broke down the channels and how many man days it would take to help him achieve the tactical outcomes that were required for many of the projects and tasks. The board eventually gave James the resources he needed, and he set about tackling his first mile marker—the channel conflict arising from the exclusivity deal with Ottobock. Rather than tackling the legal issues of that contract, James decided to set up a separate business entity to test out the Goto seat. The company was named Firefly Friends, and the business set out to market the Goto seat in conjunction with Cerebra. Very early on, people started sharing pictures of the Goto seat on social media. These pictures depicted children who would normally have had to sit with carers, due to their mobility needs, participating in family life better than they had before.

The story started to spread and customers started to search for the Goto seat by name. Very quickly, the business had built up a healthy number of visitors—around 18,000 per month—and they were all coming from social channels, direct channels, referral channels, and organic search. It was notable that the social media driving their traffic was the social media of other people, and not of Firefly itself. Their content had been syndicated, and it was the act of syndication that led to new customers. James understood that for the strategy to continue to develop, he needed to get business alignment and the culture of the business exactly right.

Having taken Firefly as a different entity, he then created new departments. These departments differed from those of his traditional business, and the differences reflected the digital nature of Firefly. The departments he chose were Community and Education, Innovation, Production, Marketing, Customer Service, and Administration.

James met his requirement for agile innovation by recruiting those around him that he felt were thought leaders in the area. His next collaboration was with a lady called Debbie Elnatan—an Israeli woman who had come up with an ingenious invention that firefly called the Upsee. The Upsee is a mobility harness device that lets children with motor impairment stand and walk with the help of an adult. James engaged with the community around him by inviting all the top journalists and bloggers in the field to come to his factory to get a prerelease launch view of the Upsee and to allow them to test it.

Shortly before the release of the Upsee they started to talk passionately about this new product and how it could change the child’s environment. They talked about how the Upsee could enable “family involved participation” (our wave term) in a way that no product before it had.

The number of visits to the website instantly rose dramatically from 18,000 to 200,000. Of these, 87,000 were from social media, 48,000 from direct hits, and 33,000 from referral traffic; 27,000 came from organic search and 2,500 from other means. The Upsee was picked up by mainstream media, who shared the story of the Upsee. Children with limited mobility were now able to perform and help with everyday tasks and activities, like stacking a dishwasher, kicking a ball, or going for a walk. The story of the Upsee was syndicated on many news channels. It appeared in over 100 countries on television and on hundreds of websites, in hundreds of languages around the world. The Upsee went viral.

Nobody could predict that the Upsee would go any more viral than the earlier product, the Goto seat. It happened through experimentation and innovation, but the more innovative a business is, the more innovative products or services it has, the better it solves a customer task—the more the business’ traffic builds.

Firefly’s Upsee now easily gains 150,000 unique visitors every month and has a very healthy conversion rate. It has built a brand of its own and is a prime player in the field of family participation products for children with special needs, and no competitor has been able to disrupt it. Undoubtedly, the unique product plays a large part in Firefly’s success, but the products came from of collaborative design because of James’ desire to create a solution that fitted in with Firefly being a digital business. If James hadn’t set out to create a digital business—if he had gone the traditional route and sold through a distributor and used his own social media channels as superfluous add-ons, the Upsee would not have gone viral.

James set out to reimagine how his business could be and to develop a business that was going to be successful by disrupting a marketplace. Therapists have come on board with Firefly and are now starting to understand more about how the products are helping children in cognitive and physical development. Other products have now started to emerge, all created and conceived by the community, and designed and built by Firefly, who in turn gives credit back to the community.

The formula James would say he has gone through to create a successful business was that he started with a digital business strategy that allowed him to share his vision. He was able to break that down and understand the customers and the marketplace. He was able to align the business and get the culture right internally, able to educate his board, and able to look for agile innovation. All of these things, combined with his vision, lead to mile markers, projects, and tasks, which in turn, when executed by a properly informed, well-educated people base, led to tactical excellence. James didn’t start with tactics first—he started with strategy first. The business is now growing rapidly and may someday overtake his legacy Leckey business in terms of size.

James used the Seven Principles of Digital Business Strategy to identify a new market niche, create a digital business with a new structure and digital processes, create an industry wave, create agile innovation cycles, reach new customers, and make a market move north to authority.