value proposition

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30 THE SEVEN PRINCIPLES OF DIGITAL BUSINESS STRATEGY

said, know yourself can be a good place to start, because we already have all the necessary information immediately available to make our analysis.

Know yourself is made up of two different parts: ambition and value proposition.

Ambition

To understand what we mean by ambition in the context of the Seven Prin- ciples of Digital Business Strategy, we must realize that we are discussing the ambition of the strategy itself, rather than the ambition of the business. The word “ambition” is used by management and management consul- tants often, but usually they are referring to the company’s mission (or vision) and values. Mission and values are not irrelevant to digital business strategy—indeed, a business strategy’s ambition will often be in pursuit of meeting or furthering a business’s mission, or adhering to its values—but the ambition of a strategy is shorter term and informs the strategy’s scope.

Relative to a vision, the mission of a business is a short-term desire for its future position. A business’s vision is longer term and aspirational, often involving an ultimate destination. The mission of a business explains why it exists. In order to form good strategies, we must have a clear idea of what our strategy’s ambition is—an idea of what we actually want to see happen upon the execution of the digital business strategies we create and the mission helps guide that strategic direction more explicitly and immediately.

The values of a business speak to its culture and are displayed daily in the behaviors and interactions of its staff. Businesses usually list their values as being things such as integrity, compassion, innovation, and knowledge— values relate to “how the company does business.” Again, an awareness of what sort of culture we wish to create within our businesses is a good thing, and values are an excellent way to convey our cultural desires. In many ways, the values and the manifestation of them in practice help codify the mission of the organization, and in so doing it enables the strategy to be developed, understood, and implemented in line with that mission.

Values require strong leadership if they’re to be embedded within a new organization, and that leadership must be present if a business is to keep moving toward achieving its mission. Both are important

McKeown, N., & Durkin, M. (2016). The seven principles of digital business strategy. ProQuest Ebook Central <a onclick=window.open('http://ebookcentral.proquest.com','_blank') href='http://ebookcentral.proquest.com' target='_blank' style='cursor: pointer;'>http://ebookcentral.proquest.com</a> Created from apus on 2021-05-16 17:07:30.

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THE FIRST PRINCIPLE OF DIGITAL BUSINESS STRATEGY 31

concepts in successful business, and they both inform the ambition of a strategy, but for a successful strategy we must have a clearly defined strategic ambition.

Ambition is what you plan to achieve in the shorter term, within the strategy, in pursuit of your organization’s mission and in keeping with its values. Ambition is important in the digitized economy as it provides an emphasis within strategy development that props up the importance of aiming high and always seeking to aspire to be better. It is an attempt to remove complacency from the equation, always a very present risk par- ticularly in successful enterprises.

Given that the ambition of a strategy must be specific to be effective, we must ask ourselves how we define strategic ambition in larger organi- zations with multiple departments. We do this by creating a specific digi- tal business strategy for each department. In creating department-specific strategies, we can ensure that the ambition of our strategy is specific and relevant to any given department, such that it can inform effective strat- egy, while still acting in pursuit of an organization’s mission and in keep- ing with its values. If however a business chooses to digitally transform, it often has to look across business silos. To keep this example simple how- ever, we’ll assume that the business is not setting out to transform, simply creating a plan of action that aligns with its existing plans.

To illustrate this, we’ll look at the local government of Armagh city in Ireland: Armagh City and District Council (AC DC).

AC DC’s mission is to become the most desirable city in Ireland in which to live and the most desirable city in Ireland for tourists to visit. AC DC is up against some very stiff competition, and they’re aware of that. As a large organization, they tackle this heavy marketplace competition by ensuring that each division within the organization has a strategy that has an ambition that maintains a focus on propelling the business toward its vision.

Having looked at its resources and at its marketplace, AC DC has pinpointed that, in terms of tourism, it has a vision to become the center for religious tourism in Ireland. It will not reject tourists who visit for nonecclesiastical reasons, but the city holds two cathedrals and is the ecclesiastical capital of Ireland. The Primate of All Ireland (a title denot- ing ceremonial precedence in the church) resides with the Archdiocese of Armagh, for both the Roman Catholic Church and the Church of

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32 THE SEVEN PRINCIPLES OF DIGITAL BUSINESS STRATEGY

Ireland. AC DC has realized that it is in a prime position to leverage these ecclesiastical attractions in pursuit of its vision. The tourism department’s strategic ambition, then, becomes specific to the promotion of ecclesiasti- cal tourism, and in this way, the department remains in pursuit of the organization’s higher level vision of becoming the most desirable city for residence and tourism in Ireland.

The dog warden of AC DC has no interest in ecclesiastical concerns as they pertain to the mission of the organization. Instead, the dog warden’s strategic ambition, in pursuit of the mission, comes down to ensuring that animals are rescued and rehomed. The leisure department’s ambition is to reduce obesity and promote better nutrition and a healthier lifestyle for those who live in the district. This ambition is relevant to those who live in the district, but not necessarily to those who visit. Nonetheless, the department’s strategic ambition contributes, in the most meaningful way it can, to the organization’s mission. The planning department’s ambition is to create the most sustainable environment possible for residents, while maintaining the heritage and architecture that will attract tourists.

All of these ambitions are very different and very specific to each department, its remit, resources, and capabilities, but they are all relevant to the organization’s mission, never taking eyes off the higher level goal.

When we understand ambition in this way, we can look at how we form ambitions in relation to the Seven Principles of Digital Business Strategy. A digital business’s strategic ambition is often a short-term plan lasting from 3 to 12 months that helps a business move toward its mission and vision. It is used to drive action and to encourage positive decision making. If written effectively, a digital business’s strategic ambition will allow participants to do less activity, which is more focused. Their efforts more effectively move toward achieving the strategic ambition, which in turn has a greater impact on working toward the business’s vision.

At the core of every effective strategic ambition are three fundamental characteristics—we must be able to communicate them to others, be able to understand them, and be able to measure them. Let’s take a look at an example of an effective strategic ambition.

The ambition of the strategy is to help position our company as an industry authority for (insert the company’s industry subcategory).

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THE FIRST PRINCIPLE OF DIGITAL BUSINESS STRATEGY 33

This will be demonstrated when peer-reviewed publications and social media influencers link to us upon launching our (new innovative product or service). This body of work aligns with our ambition because ____________.

Setting our ambition out in this way works, because it can be easily communicated to, and understood by, those involved. It has a clear point of measurement (linking and mentions in social media and peer- reviewed publications).

Compare the ambition statement above to this one: “The ambition of the strategy is to improve our website and leverage

social media to create a community. We will use e-mail marketing as well as Pay-Per-Click advertising (PPC) to drive attention and we will measure success by sales conversion.”

This ambition statement is less than effective because, rather than being strategic, it is tactical in nature. The strategy is to improve the web- site (a tactical point) and to leverage social media and create a community (tactical points). There is no context provided as to why or how the com- munity will engage with us. We say that we will use e-mail marketing (a tactic) and PPC (another tactic).

This propensity to outline tactics when tasked with outlining an ambition is very common, but it’s a good way to ensure that our strat- egies become unworkable. As we discussed in Chapter 1, when we looked at Richard Rumelt’s Good Strategy, Bad Strategy, we are looking to create guiding policy, rather than tactical instruction. The guiding policy should allow those involved in delivering the strategy to under- stand the parameters.

To use an analogy, when we create guiding policy, we are creating the highway, setting out directions, lanes, and speed guidelines. The guid- ing policy, or good strategic ambition, doesn’t specify the lanes we use, nor the speed at which we drive. In bad ambition, we aim to dictate the style of driving, the exact lanes, used and when. Strategies created in this way can work for a time, but challenges arise when there are obstacles in the road. If we need to switch lanes or change speed to tackle an obstacle, but our guiding policy dictates that we must continue in the same lane and at the same speed with no option to adapt, we are heading for disaster.

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