And now for some brutal honesty about ‘digital transformation’

Kim Douglas is an admittedly reluctant interview, wary of piling on to the panacean conversations circling 'digital transformation' among brands, agencies and consultancies—and their ensuing feuds over who does it best.

“I’m sick of people talking," he says. "We’ve got this, we’ve got that. Shush. Just go do it. It’s really hard."

Douglas, a Kiwi with 25 years experience working across holding group agencies is now VP and managing director of Publicis.Sapient in Singapore, a creative consultancy that others might call a ‘cagency’. In APAC, Sapient clients run the gamut from financial (Citibank) to travel (ANA) to CPG (Unilever) to automotive (Bridgestone) with recent projects including the myTelkomsel app for the Indonesian telecom and new digital platforms for Australian beauty brand Aesop. 

The case studies from these projects are full of flow charts and acronyms. But Douglas says what’s mostly lacking in the business is straightforward honest conversations.

“The digital-transformation story for most clients is almost debilitating," he says. "I think clients and the agencies that serve them are getting stuck in jargon, in the go-round of collaborative workshops, in the go-round of stakeholder alignment and in the go-round of static investments.”

‘Digital transformation’ sounds like such a no-brainer, and therefore implies simplicity. Who wouldn’t want to immerse their brand and entire business into the connected world where nearly everyone works, plays, socializes and shops. But shifting one’s entire marketing operations—staff, culture, planning, resources, technology, service products, customer experience and purchasing into an entirely new way of operating is one of the most exceedingly difficult things to accomplish and is anything but a quick fix.

Without a clear vision and buy-in from every part of the business, the more stumbles there are to build frustration with the process. The downward spiral Douglas rattles off sounds like something he’s heard a thousand times from clients.

“Someone comes in and talks about digital transformation as the path to nirvana," he says. "There’s a lot of language, a lot of jargon. You can get very lost in ‘AI-driven native cloud solutions’. You can choose to do some innovative work in labs for small amounts of money that can’t be tethered back to your real business and your real business culture. You end up outsourcing the company’s future to a number of separate agencies but your staff don’t become digitally centric. You haven’t got a learning culture….and you’ve spent a lot of money and it’s taken way longer than you’ve thought.”

What a waste

It’s these familiar rabbit holes that Douglas says he would rather avoid altogether, than be paid to get mired in. He remembers a recent conversation with a CPG client who invited Sapient to pitch. Douglas turned them down, pointing out why their plan would fail and how it would end up wasting money. 

Instead of being offended, they pleaded to work together, which Douglas again flatly refused.

“That honest conversation, you could see no one was giving them," he recounts. "I said, ‘You haven’t got the mandate, you’re going to try to string a regional team [out of one city], you haven’t allocated the budgets, you’re not yet into the planning cycle and no one’s going to use you. You’re not going to build anything in advance of the market. It’s just going to be a waste of your money and time.’”

Their response? “We know.”

This is going to take twice as long as you think it’s going to. I can totally lie to you and tell you I can do it in 12 months if that’s what your timeline is. But I will promise you now—you will hate me—but I’m going to tell you it’s three years.

Across Asia, brands are forging ahead with costly plans they’re not prepared to execute on in order to avoid being seen doing nothing. “That’s all a waste of people’s lives, let alone money,” Douglas laments. He estimates we could fill a book on wasted energies in this space.

To be clear, it’s not that Douglas thinks digital transformation is a waste—he wouldn’t be operating in the space if he did. But it’s the lack of brutal honesty in this business, he argues, that helps set up so many brand clients for failure.

So now, Douglas finds himself in big picture meetings with CMOs and CEOs where he tells them:
“This is going to take twice as long as you think it’s going to. I can totally lie to you and tell you I can do it in 12 months if that’s what your timeline is. But I will promise you now—you will hate me—but I’m going to tell you it’s three years. And I know it is.”

“It’s honest,” Douglas insists. “I’ve seen a gazillion ‘under construction’ sites out there for clients that overpromised, underdelivered, didn’t have a clue, spitballed the money, got nothing back and handed it off to Facebook or wherever the agency or consultancy goes. Or they changed the request and now it’s going to be three years. Being honest about the timeframe is important.”

Common mistakes

One of the biggest pitfalls, Douglas says, can be to envision digital transformation in the same vein as any other marketing project, with a timeline that tends to be planned in a year, executed in campaigns then analysed afterwards.

“Actually the future is nothing like that. The future is an open dynamic dialogue,” he says. And it’s not just marketing departments who think this way—planning, finance and resource management don't function dynamically with open dialogue around new opportunities and investments that emerge.

Then, on the other side, Douglas notes, the CIOs come at the task with a plan to minimize risk beyond a three-year plan built on economies of scale. “Yet the bridge between CIOs and CMOS has not yet come together, so the capabilities and the experiences that companies should be building in a more dynamic manner are not happening.” 

Another key pitfall that can easily sink transformation plans in a hurry: misaligned stakeholders throughout the region.

“Korea and Japan want to do something different. Malaysia wants to go quicker and cheaper, Indonesia wants to go with Thailand and wants to spend more money,” he says as an example. “If you misstep in the first 18 months you’re done.”

Once again, the point here is not that digital transformation is 'mission impossible', but that it’s easy to come up short if the vision and execution are not clear and shared by everyone. You can’t bluff your way through.

“It’s harder than you think it is actually but if you go down that route you go nowhere,” Douglas says.
So now that we know how easy it is to fail, what can brands do to succeed?

The path forward and necessary steps

Despite all the above difficulties, the path to digital transformation is actually a simple process if you dumb it down to a couple of key things, says Douglas. 

The first involves rethinking the business. Vision. Decide where you’re taking the company, what your competitive advantage is; whether you need to build a new company or just form new capabilities; figure out how to get at profit pools you don’t see in your own sector yet but are in adjacent industries. This could be making insurance coverage as flexible as a bank account or turning taxi drivers into parcel deliverers.

Secondly, a company needs have a loose plan of all the phases—how you’re all going to get there. By ‘all’, Douglas includes capabilities, partnerships and alliances, technology, business modelling, customer-driven experience. “All of those things need to be thought of in big chunks, not as separate line items.”

Simplifying this further, Douglas sees four main phases:

• Digitise your business. All employee interactions, research, data and contacts spread across different platforms and personal devices should all be logged and accessible. “That’s it. This will take time and money.”
• Optimise it. Which functions can you get more value out of and what do you need to shut down? Where do you need to shift costs? This phase is about people, technologies, capabilities, out-or-in-sourcing, to get some investment and more time back. You can’t just add-on tasks and let them pile up on people’s desks, Douglas says.
• Personalisation. Build a relationship with the consumer where you have knowledge of what you do, why you do it, what you’ve done.
• Enterprise entrepreneurial leadership. Be something you’re not. Typically, Douglas says, this translates into running commerce off your own platform through channels you don’t own without coming through your website. Using channels like AI chatbots to turn up in customer conversations at a service-based level and then doing business with those customers in that service environment would be a great example, says Douglas, noting that not many are doing this yet in Asia.

Successfully executing all of the above seldom happens by clinging to a linear roadmap, hoping the entire time that the brand has correctly bet on building the right product. It needs to be far more dynamic.

Getting everyone on board

In fact, Douglas says each phase requires a new orientation for everyone in the business, with people, technology and messaging all having to be in line.

“If your people don’t come with you and you’re not clearly communicating to them in each phase of this program, you will not get there,” he says, noting that internal communications is one of the most important keys to transformative success.

The guidance, Douglas instructs, ought to be simple, tangible and emotional. No client likes to be babied, but as they’re led through various growth stages, the advice sounds a lot like a parenting conversation. “Don’t worry, this is the first phase, it’s going to hurt a bit. This next one will be a bit harder.” It needs to be broken down into manageable phases. “Otherwise they can’t eat it,” Douglas says. “Or they’ll get bored halfway through the vision and wander off.

If mom and dad don’t say the same thing it’s really confusing to be at home. If your company has three moms and four dads it’s just hard. And most companies are having that problem.

“You certainly lose a lot of kids along the way. They’ll pull against you and you won’t have that wind in the sails from behind because the people won’t embrace it. What they will do is they will sit at their desks, listen to the presentations and wait for it to turn up on their agenda. And because it never does, they never do anything. We’ve learned this time and time again.”

So clear messaging is really important. But it can easily become muddled by the digital transformation consultants themselves if they turn up with too many separate specialized teams to draw the client’s focus away.

“If mom and dad don’t say the same thing it’s really confusing to be at home. If your company has three moms and four dads it’s just hard. And most companies are having that problem,” Douglas says, sticking with the parenting analogy. “They don’t need their partner in transformation to exacerbate that by having their own version of them.”

Who does it better: consultancies or agencies?

Some might feel that the big consultancies have a leg up on the holding companies in this regard, since the same consultant team talking to the client C-suite about financial restructuring can now walk it through digital transformation as well, while their ever-increasing raft of marketing services carries it all out. (See Behind Accenture Interactive's Chinese growth ambitions).

But Douglas argues this couldn’t be further from the truth. The knock against holding company agencies for the longest time is that they remained too siloed and couldn’t work collaboratively enough in the best interests of the client.  But in recent years, the big agencies have been slowly dismantling those silos and moving towards a single P&L structure.

The biggest opportunity for us and clients is to minimise the stuff that doesn’t create value. Stop feeding the old monsters.

“If you look at what Accenture is doing, in my humble opinion, they’re building a holding company logic,” says Douglas pointing out how big consultancies are fully siloed by geography, industry verticals and specialist businesses from delivery to design to data analytics. 

“You’re trying to sell in multiple service lines but they’re no more collaborative than the old holding company. By the time you get to the client they’ve got Accenture consultant, local consultant, delivery lead, Accenture Interactive, Accenture Digital, Fjord and they’ve bought this company [X]. Same problem, recreated.”

Sapient, Douglas argues, is significantly different since it ostensibly can bring the right talent in one conversation for the client under one P&L. But perhaps more importantly, it’s more nimble in that it has no legacy IT consulting business that it needs to support.

“I don’t have to fuel an [enterprise resource planning systems integration] business that requires me to cover 2,000 outsourcing customer-service people in the Philippines. Accenture does," he argues. "And I don’t need to cover a massive ERP business around bringing in payroll-type technology services of 15 years ago into companies. And I don’t need to cover media on the other side."

This, of course, is another unpleasant irony of the digital transformation industry. Its clients who are desperately looking to break free of legacy business shackles can find themselves locked into a new pair, only slightly shinier.

“The biggest opportunity for us and clients is to minimise the stuff that doesn’t create value,” Douglas maintains. “Stop feeding the old monsters.”