Digital Transformation - The Underpants Gnomes Problem

February 2, 2018

Analogies. I love them. Can’t get enough of them. Which might explain why, when recently posed the question in a PR interview “What do you think is the biggest issue companies face when tackling digital transformation?”, I couldn’t help but lean on the genius, early work of the South Park creators Matt Stone and Trey Parker.

“The biggest issue companies face when tackling digital transformation is the Underpants Gnomes” I boldly responded, without hesitation.

…Silence…. Raised eyebrow…

Ok, fair enough, this one is a niche one. Indulge me here.

In South Park, the Underpants Gnomes snuck into kids rooms at night and – you guessed it – nicked their underpants (which may explain why my son can never find his when it’s time to get ready for school). The South Park gang tracked them to their hideout and questioned them on what they thought they were doing.

They had a very simple business plan, you see. A three stage plan.

1)   Collect underpants

2)   ??

3)   Profit!

As a brief exercise, try changing the words “Collect underpants” to “Digitally Transform our business”.

Ringing any bells now? Maybe Parker and Stone were on to something after all.

“Phase 2…?”

Herein lies the challenge. Many, many companies embark upon, have already embarked on or, in some instances, believe they have completed their “digital transformation”, without ever really answering the Gnomes’ Phase 2 question. A bunch of stuff has happened; A Head of digital has been hired, a website or two has been rebuilt and chances are there is now an ‘app for that’. Bosh. We are digitally transformed!

Are you? Really?

A recent study* showed that 61% of companies were very confident with their digital strategy and tactics, yet only 32% were able to confidently answer what the main purpose of that strategy, whether they had the right data to support it and hence what the best way to implement it was. I’d be willing to bet that Toys’R’us thought their digital strategy was fine. Until they burst, and experts everywhere suddenly emerged saying “Ah, if only they had properly digitally transformed their business”. The recent share price performance difference between Next (positive) and Debenhams (negative), despite equally challenging trading conditions must surely in some way reflect the fact that one has gone a lot further towards effectively driving deep, insight driven digital transformation, whereas the other has (intentionally or not) paid lip-service to the challenge.

Closing the Perception Gap

This perception gap between feeling that you’re ‘digitally fine’ vs whether you’re actually ‘digitally fine’ is a massive blocker to true digital transformation.  Without a truthful and deep insight-driven assessment and identification of the challenges you’re looking to overcome, full organisational buy-in to those challenges and subsequent alignment behind them, “Digital transformation” will far more likely manifest itself as “build me an app”. Followed by pats on the back all round and BAU performance and outcomes.

As an example, let’s take a critical organisational consideration such as, “Shall we hire a Head of Digital?” If so, who are they? What do they do? Where do they sit in the organisation? How do they bridge the gap between Commercial and Technology? Do you even need one if you’re genuinely ‘digital first?’. Without being able to answer these questions clearly, you will do nothing more than skirt across the surface of digital transformation without ever truly understanding how to get to where you want to go.

Shining insight into the murk

Understanding is key here. Real, unbiased understanding. Of your business, the market, your people and most importantly, your customers. Who? What? Where? When? Why? How? Building a deep data-centric insight into these fundamental questions is the torchlight that can pierce the fog and give a true sense of what digital transformation success can look like for you.

Forensic Predictive analytics overlaid with psychological intelligence is a killer 1-2 punch (especially in a post GDPR world, but that’s a tale for another day), giving companies true insight into precisely what business challenge they are looking to solve, why they are looking to solve it, who they are looking to solve it for, and when and how this can all be achieved. Integrate this into your wider business strategy and suddenly the Gnomes’ “Phase 2” doesn’t seem like such a big question mark.

So now we know we can get to the bottom (pardon the pun) of the gap in the Underpants Gnomes’ plans. Just don’t get me started on what the ‘Sock Goblins’ are responsible for…

Duncan Finlay

CMO – Voodoo Park – ‘Don’t think you know, know you know’

Can never find his socks in the morning either

*Voodoo Park Data strategy report conducted amongst 150 Marketing leaders – September/October 2017