How do you define “digital strategy”?

Tom Hovey
8 min readAug 11, 2021

The phrase “digital strategy” is a funny one. On one hand it’s the irritating combination of two intangible words that could mean just about anything, and on the other, it could refer to your most valuable business asset.

Some people argue that there’s actually no such thing as digital strategy, because there is only business strategy and these days, all businesses are digital. Ergo, your business strategy is your digital strategy.

That’s a compelling argument, but research consistently finds that good, clear, coherent digital strategy is critical to success when it comes to delivering complex digital projects. This suggests that a digital strategy is indeed something tangible, and quite valuable.

There is no official definition for ‘digital strategy’, but given how frequently the phrase is used, and how important it is to get your strategy right, it’s worth spending some time defining the term for your organisation.

I start by defining digital as the use of technology to provide experiences that enable people to do things better, more enjoyably and more efficiently. This definition lets you think about digital as having the potential to improve the lives of your external customers as well as your internal staff and suppliers. This definition puts people and the experiences they value at the heart of your thinking. Good digital strategy should always start with people, never with technology.

The definition of a strategy is generally agreed to be the identification of a particular challenge or opportunity, a reason for tackling it, and a coordinated high-level plan for how to do so. At its heart, the strategy should contain a guiding idea or concept that gives the entire strategy purpose. This guiding idea should be based on genuine insight, analysis and validation; if the guiding idea is right the strategy should deliver significant benefits. If the guiding idea is wrong or absent, the results are likely to be poor.

The guiding idea at the heart of a digital strategy is the identification of the key experiences that should provide value to both your customers and your organisation. If you can’t see or imagine experiences of value in your digital strategy, it’s heartless. And without heart, it will struggle to deliver good results.

Good experiences that deliver value are at the heart of digital strategy.

A good strategy should guide an organisation or project towards a position of value; and ideally the position is unique and sustainable. A strategy is weak if it results in a market position that delivers less value or can be easily copied by a competitor; similarly, a strategy is flawed if the position can’t be sustained over a long period. In the context of digital strategy, technology alone very rarely results in sustained advantage as nearly everyone has access to the same technology.

However, the use of technology in combination with aspects such as unique processes, experiences that people value, first-mover advantage, and economies of scale can produce powerful results. The value of the strategy is in the coherency, coordination and combination of all these aspects, guided towards a particular purpose. In short, digital strategy is not just about technology.

Some people mistakingly think that the strategy contains the answers and they flow down from the top table, when in fact it’s the very opposite: a strategy outlines the questions that need to be answered during strategic planning and execution. If the strategy defines the right problems and asks the right questions, it should guide a project or organisation.

So what is a digital strategy?

A digital strategy is a coordinated approach for how to use digital technologies to provide experiences that make life better for people.

Your digital strategy must be tightly entwined and aligned with your business purpose and strategy. Your digital strategy should help move your organisation in the direction determined by your business strategy.

The purpose of your organisation guides your digital strategy. Without purpose and people you cannot have a digital strategy; and whilst your digital and business strategies should be tightly entwined and codependent, it’s important to realise they are not the same thing.

Naturally, the tightness or proximity between the business and the digital strategy varies from organisation to organisation. For large technology companies they are virtually one and the same, but for the vast majority of other businesses and organisations, there is a discernible distance between the two.

Your digital strategy should power your business strategy — but they’re not the same thing.

A cute twist of words produces the phrase ‘strategy for digital’ which provides another way to think about digital strategy. What is our strategy for digital? What is our plan for using digital to do our business better? Similarly, the phrase ‘digital business strategy’ is sometimes used: how can our entire business benefit from digital technologies? Sometimes the opportunities presented by the use of digital can fundamentally change your business strategy and model — but shouldn’t ever change your purpose.

Not just a website

The phrase ‘digital strategy’ is used by web companies, IT companies, digital advertising companies, content companies, and of course all business consultants. But it means different things to different people. A digital strategy for your business is not just a plan for your website or your content, nor the replacement of a business platform or digitising workflows, nor the creation of an app, neither is it the execution of an advertising campaign or the use of social media. These activities all require strategic thinking and may be required to bring a digital strategy to life, but they are not the strategy.

At the business level, a digital strategy could be quite disruptive and present a different way of doing things by examining the business model and defining ‘value’ in new ways. By comparison, updating a website or replacing a technology platform may be very important, but in most cases the goal is to enable the organisation to do things better, not to do different things. This work can be strategic (aligned to the strategy), but does not require a change to the business strategy, and therefore seldom results in meaningful changes in behaviour or business results.

At the most basic level there are three fundamentally different types of digital strategy:
a) Streamline (most digital transformations are based around using technology to enable an organisation to do the same things more efficiently)
b) Amplify (use technology to focus on and amplify the activities in your organisation that drive the most value for your business and customers)
c) Disrupt (seek to create new experiences of value that consequentially take value away from competition; you can think quite broadly about what constitutes competition for the activities of your organisation).

Be clear on the focus of your digital strategy at the outset

What’s in a digital strategy?

Every strategy is different, but essentially a digital strategy should answer four deceptively simple questions:

  1. How can you use digital technologies to get better business outcomes?
  2. Where and how much should you invest?
  3. What are the risks?
  4. What approach is required to deliver the strategy?

The effort required to answer each of the four questions varies depending on the context and strategy required, but all digital strategies should define value and encompass why and how you plan to use and coordinate all of your digital activities: your website, your apps, your business platforms, your content, your digital marketing etc.

Looking across all of these technologies and channels, coupled with thinking about what your customers and stakeholders value, is crucial to creating a successful and coherent strategy. A strategy can only succeed if it intelligently brings together and guides all of your activities. Like the magic of teamwork, coherency is incredibly powerful.

It’s vital that the overall approach outlined in your digital strategy factors in the culture, capability, and capacity of your people and organisation, as well as how you might deliver the required technology and execute the project. Can you really deliver what your customers want? Do you need to change your business model? Do you need to outsource or bring skills in-house? Do you need to go to market to procure a range of technologies and partners? Can you use your existing platforms? At the end of the day, if you can’t execute it, it’s a poor strategy.

A strategy outlines what you should do (not just what you could do).

To develop a really good digital strategy, you have to deeply understand what experiences are valuable, be able to imagine a different way of doing business, and then coordinate many different people and technologies. This takes time and can’t be easily outsourced.

You can’t just go to a technology company and “buy” a digital strategy, just like you can’t easily go out and “buy” a business strategy. These core strategies need to be unique and developed using internal expertise and with a great deal of thinking, care, buy-in and alignment. You also need genuinely impartial advice when developing a strategy.

Technology companies are the masters of execution and should certainly feed into your strategy, but most are naturally biased towards using the approaches and technology they design, build, sell or licence. Everyone has natural biases, that’s life. And in most cases, technology companies start with technology because that’s their area of expertise. Asking a technology company if you need new technology is not wrong, but it can be a bit like asking McDonald’s if you should buy a hamburger.

Does the definition of “digital strategy“ matter?

Not really, so long as it works for you and your organisation. The key is to understand the scope and expected outcomes for your strategy, and then invest in getting it right — your digital strategy is critical to success.

Start off on the right foot

If you’re serious about doing better with digital, you need a champion in your organisation with the time and licence to do the work required to create a coherent digital strategy. This could be you. The evidence shows that investing in a strategy pays off in the long run.

If you don’t have the strategic capability in-house, engage an independent strategist to help you with the necessary thinking and to support you to do the work that needs to be done. Your strategy partner should be well versed in alignment building workshops and come with a box of tools such as insight research, analysis, journey-mapping, service design etc. They will help you take your organisation on the journey.

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Tom Hovey

Tom has over 25 years of experience making digital work for organisations. Founder of Diagram — an independent digital strategy consultancy. www.diagram.co.nz