Digital. It’s everywhere and touches most things these days.
Just consider some of these statistics:
This shift to digital permeates every industry.
Those businesses who wish to survive need to be highly proactive and take advantage of the opportunities or risk becoming irrelevant and obsolete.
Of course, this does not just apply to commercial profit-making organisations. The charity and not-for-profit sector need to become digitally attuned and innovative.
63% of UK charities do not have a digital strategy according to the Charity Digital Code Benchmark report, and that 75% have few digitally skilled people around.
They need to understand the opportunities and challenges they are facing – such as digital skills, funding and leadership of digital, and rapidly learn what to change and how to go about it.
Today I am joined by our partner Damon Harding to discuss some of these challenges, and how to approach digital transformation in the charity and not-for-profit sector.
Sophie: Hi Damon, thanks so much for chatting with me today. Can you briefly introduce yourself and what you do at Digital Works Group?
Damon: I have over 20 years experience in retail, telecommunications and not-for-profit with various senior operational roles roles including CPW and TalkTalk. I managed a large transformation project at TalkTalk, improving services which supported online first customer journeys. I joined DWG Strategy and Leadership practice as Partner in 2017 and now lead the Charities and not-for-profit Sector.
Sophie: Today, we are going to be talking about digital transformation in the charity and not-for-profit sector. Can you start by giving your thoughts on why it is so important for charities and not-for-profit organisations to be become more digitally optimised?
Damon: Good question and one that a lot of charities are grappling with at the moment. This really goes to the heart of every charity. How are you going to engage supporters in your cause? Older supporters may be happy to use more traditional channels to engage with charities but there is an emerging group of digital natives. Digital natives expect to be able to engage with the cause online. Charities who don’t provide good online customer journeys will find themselves getting further behind. They will be unable to influence and engage fully with a digital world.
Sophie: You’ve worked with a number of charities. In your experience what would you say you have you seen charities struggle with most when it comes to digital? Are there some common scenarios?
Damon: Most charities are on this journey and many have basic online acquisition journeys and some back office capability. In my experience, where many of them struggle is that they are still structured around organisational silos. Organisational silos include brand, product, fundraising, advocacy, supporter care and field operations. They expect digital journeys to fit around the same model… but they don’t.
Also, you cannot design the digital experience in isolation of traditional channels. Everything needs to be more joined up. Otherwise, you will get mail and email campaigns giving different messages to the messages the supporter experiences online.
You need to be able to deliver great digital journeys. These digital journeys need to be designed in a far more joined-up way. This requires far more collaboration between different departments than they are used to. It is a big cultural change.
Sophie: Do charities have the same issues as businesses in other sectors? Are there any major differences?
Damon: In my experience, charities have it a lot harder. They do not have the budgets that equivalently sized businesses have to solve similar problems. Bizarrely, many charities cannot claim back VAT so all their investments are 20% more expensive to start with.
Also, they find it harder to get access to the relevant skills as fees and salaries are all more competitive in the commercial sector.
Meanwhile, commercial organisations are pushing ahead with their online experiences. They are making it easier to engage real-time with their products, make payments, manage direct debits, chat and automated issue resolution services. Businesses are making good use of data to tailor better experiences. And the bar keeps getting set higher.
Because of this, charities need to be more intentional about what they want to achieve and how each pound invested relates to their value drivers and supports their cause. A digital strategy linked to the organisational strategy and value drivers is essential.
Sophie: What are the skills that they are missing and how can these be addressed?
Damon: It varies between organisations – but from my experience, digital transformation needs to start from the top. It doesn’t work bottom up! I was pleased to see this was identified as a key success factor in the Charity Digital Code where it states “Charity leaders must lead on digital as a way of helping their charities be relevant and sustainable.”
In my view this should extend to the board of trustees as well. Every charity should be looking for an experienced ‘digital’ trustee to challenge and support the senior leadership team on their progress.
I think some of the emerging skills gaps are in the area of marketing automation. This is the ability to influence supporters in real time, including those browsing for the first time on their website.
More current gaps are digital analysts who can make sense of online supporter behaviour. Also, people who understand Pay per Click (how you maximise marketing spend), Search Engine Optimisation (how you get found) and Conversion Rate Optimisation (how you convert the maximum number of visitors into supporters).
Increasingly, in the area of supporter care, many of the back-end processes are being streamlined and being put online. This requires specific skills. Putting existing processes online and hoping they will work is a recipe for failure. However, we have found that the designing of good supporter-led online journeys often leads to significant improvements to existing manual processes.
On the IT side, we see a need for technical and data architecture skills. This is a problem as these are critical success factors of a digital transformation plan. It is essential that the digital front end can integrate with other back-office (often legacy) systems.
Sophie: Do you feel the charity sector is aware of the breadth of opportunities for transformation?
Damon: I think there is a general lack of awareness of the art of the possible, however, it is important as a charity not to get carried away with ‘shiny and cool’ stuff and really focus on the important things.
One of the benefits of digital technology and more agile ways of working is that you can try things out or test one idea against another for very little cost. This lends itself to lots of little changes in the right direction rather than the large ‘waterfall’ changes perhaps we have been used to in the past (although these still have their place in certain situations).
This is why it is so important to stay grounded in an overall digital strategy so that you don’t lose your way and you learn quickly from each failure and can celebrate each small win in its context of moving towards a bigger strategic outcome.
For charities, I think it is really important to hold the art of the possible in tension with both the cause and the supporter experience. It may be a really cool idea but we need to really ask the questions a) does it further the cause? and b) will the targeted supporter group love this enough to believe that it is a good use of their hard-earned cash? If you can’t answer either of those questions with an emphatic ‘yes’ then you shouldn’t be doing it.
Sophie: What are the major opportunities for charities to get more from digital?
Damon: In summary, I see the major opportunities as follows:
- Be more joined up and work more collaboratively
- Engage more supporters more regularly in advocacy of the cause and tell stories more effectively
- Streamline back office processes, making it easier to engage with ‘cause’, donate and deal with queries (at the same time as improving efficiency)
- Embrace AI which will fuel innovative services and may even help with remote diagnostics, monitoring and efficient delivery of services to vulnerable or high-risk beneficiaries
Sophie: At Digital Works Group we often use a ‘digital evolution curve’ to explain a simplified ‘digital journey’. Can you explain this in a nutshell?
Yes, we use it as a narrative to try and categorise organisations to help them understand the scale of the change.
- Stage 0 is no digital capability, and though this is becoming relatively rare there are still a large number of charities with no digital strategy.
- Stage one is digital marketing transformation – which is really only about online marketing and acquisition
- Stage two is company-wide transformation – which includes streamlining all the back office processes and getting them online.
- Stage three is innovation – using data to innovate with new products.
Some charities are progressing with stages 1 and 2 together with elements of both underway, so it is a good place to start mapping the organisation on the curve.
Sophie: When you start to engage with a charity or NFP how do you typically get the ball rolling and get them to start the ‘digital journey? How important is it to get them to hold a mirror up?
Damon: We would generally start with a digital education piece for the board to help them understand the big picture; This requires some initial investigation and would cover subjects like;
- What is ‘digital’ and ‘digital transformation’ and why is it important to you?
- The effects ‘digital’ is having on your market.
- The effects ‘digital’ is having on your customers’ needs and their demands.
- The effects ‘digital’ is having on your workplace and staff.
- And other effects ‘digital’ may be having on your company and your competition.
Next, we would map the organisation onto the digital evolution curve and ensure their business strategy gives them a clear and achievable direction of travel which is mapped to the organisation’s appetite for change.
Sophie: Is there a framework to make things easier?
Damon: Yes we use a framework to assess the organisation’s readiness to proceed with digital transformation which is like a pyramid
Start at the top of the pyramid with a clear vision, strategy, objectives and targets, aligned around value drivers and cause. If in doubt get help at this stage as it will pay dividends.
The next layer is the three strategic success factors; we need to ensure these are right:
- Digital capability is seen as a shared resource by all of the executive team
- That your plans are customer experience led throughout the business
- That you are structured correctly as an organisation to succeed
Finally, at the bottom of the pyramid are five execution change factors, and these also need to be right:
- Have a long term technical & data architecture
- Make the right levels of investment
- Have a communication plan which brings the vision to life for employees, key partners and customers
- Plan, prioritise and measure your change centrally
- Collaborate and champion cross-functional working and the right creation practices
Sophie: What are your final words to charities who have not fully embarked on a digital strategy?
Damon: There is an ancient proverb that says “Where there is no vision, the people perish.” This is especially true in the digital space. Given what I said earlier about targeting scarce resource, it is imperative for charities to invest wisely.
To quote again the findings of the recent digital collective research that 63% of charities still have no digital strategy – this is where I would start. If you don’t have one, get in touch and we will help you create one.