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The Tates Digital Transformation Case Solution
The Tate, a collection of four art galleries – all of whom are based in United Kingdom, was first established in 1897 when Henry Tate, an industrialist, donated £80,000 and over five dozen of paintings. Initially, it operated under the umbrella of Britain’s National Gallery but in 1955, it became an independent entity and was known as The Tate Gallery. From the beginning, The Tate attracted visitors who were unlike usual museum visitors. Rather than typical white, upper middle class, the Tate was visited by working men and women and school children from the neighbourhood who were curious. The first forced expansion took place in 2000 when the collection size outgrew the physical space hence, a new gallery was established near Bankside Power Station, Thames River with primary focus on modern and contemporary art. From two galleries in 2000, the Tate grew into four within no time – Tate Britain, Tate Liverpool, Tate St. Ives, and Tate Modern. In 2013, the Tate galleries were visited by 8 million people who were served across four locations by 850 employees. Despite being in business for approximately 120 years, the Tate still stands true to its original mission of ‘promoting the public’s enjoyment and understanding of British art, and of twentieth-century contemporary art’.
During the last few years, the Tate galleries have made a substantial investment on their digital front and have made an effort to establish it as a Fifth Gallery – in addition to, the four physical galleries. The digital team is satisfied with the results that it has managed to achieve in the short period based on the key performing indicators (KPIs), which are currently valid within the organization. However, the top management is concerned about tying the investment on the digital front with the revenue stream to calculate the digital return on investment (DROI). At the moment, the digital team and the top management are having a hard time in making a direct link between the profit stream and the KPIs because most of them are qualitative and lack a direct association with the bottom-line. The top management including the Head of Digital Transformation team, John Stack are looking forward to a point where the digital transformation strategy is funded by the digital revenue stream and this report is an effort to explore and respond to this challenge.
Following questions are answered in this case study solution
Understanding the Tate’s Context
Case Analysis for The Tates Digital Transformation
2. Understanding the Tate’s Context
The Tate has been in the business for a long time, precisely 120 years and is regarded as one of the best art museums in the world particularly because of its digital impression. From constructing an online database of 70,000 objects, which include sculptures, paintings, paper art, etc. to using social media applications such as Twitter, Facebook, Pinterest, Google Plus, etc., The Tate has made its presence felt across the board. Not only this, but the Tate has also been actively involved in making documentaries – to bring people closer to the artists, live art screenings – which are then uploaded online without editing, online exhibitions – such as The Gallery of Lost Art, etc. Moreover, the Tate’s technology team has also made an effort to make full use of the mobile platform for which among other things, they have developed applications to assist physical gallery tours, gaming applications – Race Against Time, photography applications - Muybridgizer, Pocket art gallery, etc. Furthermore, the Tate also has an e-shop where visitors to the website are able to purchase memorabilia and gifts.
i. Lack of a Concrete Strategy
So it is apparent that the Tate has already formulated and executed a strategy for all platforms i.e. social media, online – company website, mobile, ecommerce, etc.; however, whether the company is making utmost use of these platforms and is the current strategy profitable for the company is a major question starring at the top management. A recent research survey of more than 4,800 top managers from 129 countries across 27 industries published by MIT Sloan revealed that it is the strategy of the organization that derives digital transformation and not the technology. Over the years, several organizations, around the world have relied heavily on the technology with an ambiguous strategy, which has earned them no results except a depleted bottom-line. According to Kane, Palmer, Philips, Kiron, and Buckley (2015), who were working on this report, inexperience digital teams or businesses during their introductory or growth phase tend to focus on individual digital technologies for solving their discrete business problems; however, mature businesses who have the grip of the industry and who understand the need of capitalizing on new technologies often focus on integrating digital technologies with a concrete strategy to achieve their results.
Considering the journey of the Tate – as apparent from the fact that it has carried out two digital strategy planning processes under the leadership of John Stack, Head of Digital Transformation at Tate, and the extent of developments carried out along the digital spectrum, it can be said that the Tate is somewhere in developing phase and gradually moving towards maturity phase. See Exhibit 1, which explains the lifecycle and challenges faced at every phase. In the case of the Tate, the figure in Exhibit 1 accurately depicts that the organization has too many priorities at the moment, employees working within the company lack the technical skills required, and the strategy currently employed is not concrete, as well. Moreover, as the company will grow, it will have security concerns, in the long term as it stores a large variety of artistic as well as, personal information of members. All these challenges are apparent within the case study, which shows that the situation of the Tate is no different than of any other medium-sized organization (Kane, Palmer, Phillips, Kiron, & Buckley, 2015).
ii. Lack of Organizational Capacity
As apparent from the case study, though several employees within the organization have been given the responsibility of contributing towards the digital strategy; however, many of them lack the capacity for it. The blame of employees’ incompetency has to be shared equally by employees as well as, the top management. It is a small organization with just 850 people yet, when the organization was expanding during the last couple of decades, it never invested in improving its employees’ potential and competencies hence, the organization is standing at a position where it needs more from its employees than they can contribute. This problem hasn’t affected the progress of the organization up till now to a great extent; however, same cannot be said about the future because the head of Digital Transformation division is expecting each and every employee to contribute to make his strategy of digital transformation a success but the employees don’t possess the necessary skills and training. So before the top management decides to invest monetary resources towards this strategy, it is essential to focus on improving the human resource so it can complement the monetary investment on the digital front (Chen & Huang, 2009).
iii. Need of an open culture
The Tate Galleries has a silo structure, which is neither effective nor efficient for the digital expansion. Not only there is a need to infuse the organization with the right people but also, there is a dire need to change the mindset particularly of how middle and low level employees approach their daily operational tasks. They are closest to the customers so a slight change in their attitude towards customers and their problems will get noticed immediately and will reap major benefits. However, as mentioned in the case study, if the organization invests in the training and development of all employees and all of them are empowered to make their voice heard specifically with respect to the digital transformation strategy where Stack expects every employee to contribute then how will the organization make sure that it is conveying the message in a single voice because there is a high possibility that the less experienced employees might share or post in a manner that doesn’t correspond to the brand of the organization, without realizing the fact that they are representing the organization and not their individual self.
Stack informally suggests in the case study that may be through the implementation of a detailed social media guidelines, the organization will be in a position to police the activity of every employee. Though it may sound effective, but the top management must be extremely careful of such micromanagement tactics because it often demotivates employees and frustrates them, which not only hampers their ability to be creative but puts them under undue pressure (Canner & Bernstein, 2016).
iv. Lack of a content development strategy
During the last few years, the Tate has invested a lot of resources in digitizing thousands of art work across different genre. These art work serve as an important reference reservoir for scholars. In parallel to this, the new digital transformation strategy allows visitors of all ages and experience to upload their work based on their own interpretation and understanding. Such a facility not only increases the risk for the company of exhibiting a profane work but also, it undermines the scholarly activity as the company does not have any policy to balance the curatorial voice with emerging voice of the crowd. It is also not practically possible for the company to deploy resources in this regard because there are at least eight pages of the company across multiple social media applications and as the interaction of customers will increase, moderating user comments will get increasingly difficult. Lastly, the head of Digital Transformation, John Stack is worried about the digital disruption, which will be caused when the organization will be pursuing its activities across so many fronts.
3. Way Forward
Redirecting the long-term direction of the organization
i. Identifying the trajectory of Change
The Tate has to identify the trajectory of change that the overall industry is pursuing. It is desirable for every organization to be the industry leader by being innovative; however, it is also essential to make sure that the customers are growing with the organization otherwise, the product offering might end up to be useless for customers. For instance, the top management of HP admitted that one of their major reasons of struggle during the last decade was their obsession with innovation. The company was focussed on coming up with new designs and features that it lost track of the need of customers. Customers, at that point, were still learning to make full use of the second-generation devices and the company launched the third generation without realizing that the customers don’t need it and it’s a premature phase (Bandler & Burke, 2012) (Hartung, 2015). On the other hand, companies such as Nokia and Kodak were extremely satisfied with their performance and their product offerings that they failed to keep track of the industry changes and ended up on the verge of being bankrupt (Laamanen, Lamberg, & Vaara, 2016).
McGahan (2004) suggests that industries evolve along four trajectories, which not only generates business but also, the boundaries – see exhibit 2. It is apparent from the figure that if neither the assets nor the core activities of the organization are threatened then the organization must follow the progressive change strategy. If under such a situation, the organization pulls into a rapid change lane then it ends up threatening its own progress because no other company within the industry would be pursuing such a risk. In the case of the Tate, the company is making steady progress and net income every year, however, their thirst to make profit out of their digital investment might end up hampering their growth of physical galleries, as well because that would require the company to undertake radical change. So, in order to succeed in the long term, the organization much pursue all of its development in a progressive manner so as to reduce the element of risk, which comes along with it (McGahan, 2004).
ii. Building an Open Culture
In addition to formulating a detailed social media guideline for employees to serve as a source of direction, the company should make sharing of knowledge a core value within their culture. The sharing should not take place in a top-down manner only but it should include a feedback mechanism where employees can contribute towards tactical and strategic decisions. This will not only ensure their commitment but also, they will work with a new zeal to make the new objective a reality. Scholars and industry experts suggest that open seating cafeteria is the best way of having an informal meet-up. Open seating refers to having no reserved seats or designated area for the top management, which would force them to mingle with middle and low level employees and get to know more about their challenges and ideas. Often, the best feedback is served with a meal where people feel relaxed and less hesitant in sharing their opinion. Moreover, this will allow middle and low level employees to have a better understanding of the organizational goals and objectives and will also allow them to ponder upon how they can contribute to the best of their potential. Experts warn the top management against taking every criticism seriously but suggest to have an open mind while talking to employees.
iii. Capitalizing on the rapidly evolving technologies
As apparent from the case study, the top management is concerned about the digital return on investment (DROI) and is figuring out a method to make the digital transformation strategy pay for itself. The primary concern of the organization at this stage would be to attract customers from different channels who in the long run will bring money as well; however, to look for the profit stream at an early phase would not only jeopardize the effort carried up to this point but would also affect the physical galleries, which are being complemented by the online presence of the organization. EY report published in 2016 reveals that almost four-fifth of all organizations consider the digital investment to be a short-term investment, which is why when it fails to bring a sustainable revenue stream, companies immediately come to the conclusion that either the digital channel is not suitable for their organization or, the strategy formulated by their team is not effective enough. Majority of them fail to realize that the digital strategy perhaps takes the longest time to make its results apparent (EY, 2016).
iv. Making Customers a part of the Development Process
Apart from this, another crucial point to keep in mind in order to capitalize new technologies is to make customers a part of the development process. Often, companies decide on their own what the customer wants with little or no interaction, which is a beginner’s mistake and should be avoided under all circumstances. EY (2016) report recommends that the organization should make an all-out effort to reduce the gap between the development team and the end users. By bringing them closer, not only will the organization make the feedback mechanism more sophisticated but also, it will reduce the resource required for developing a prototype. Organizations whose model is built around the concept of prototype, introduce beta versions of applications in order to test the service and get customers’ feedback, which may take somewhere from few weeks to months. On the other hand, if customers are made an essential part of the development process then the timeline of releasing the final product can be reduced to a great extent (Tatikonda & Montoya-Weiss, 2001).
v. Facilitating the dispersion of digital thinking
White (2016) is of the opinion that it is nearly impossible to make employees come up with creative solutions unless it is embedded within the organizational culture. Similarly, it is considerably difficult for employees, irrespective of their qualification and experience to adopt digital thinking without understanding the underlying factors that go into it. Based on the case study of SAP, a leading German multinational software corporation, White (2016) suggests to focus around ‘design thinking’, which will assist employees in gradually adopting the culture of innovation. For organizations, such as SAP, it is essential to innovate on a daily basis; otherwise, they will be left behind because of the speed with which disruption is made in their industry. In such scenario, employees get used to innovate but in a very focused direction i.e. they will be quick to come up with new ideas for products and services by tweaking the current offering; however, the same employees find it extremely difficult to come up with creative solutions for solving problems and this becomes a roadblock for the organization (White, 2016). SAP case study provides an essential lesson of managing and facilitating disruption – disruption needs flexibility and it can’t fit into concrete plans and set methods. If an organization will try to introduce disruptive technology into its operation when it has a hard-wired culture, it will result in a chaos and will only frustrate the stakeholders (White, 2016).
So, for the Tate, it is recommended that the top management should make an effort to change the culture of the organization by making it more open and fluid. This means not only investing in improving the competencies of employees and assisting them in acquiring new skills but also, empowering them so they can innovate without the fear of making mistakes. The focus on design thinking will generate creative solutions organically and will allow employees to adapt to the disruptive nature of the technology.
vi. Educating Employees to become Digital Citizens
The Digital Citizenship Project carried out an in-depth research of thousands of companies across the globe in order to understand the behaviour of employees at work. Some interesting statistics were revealed, which are as following.
233 million hours per month of employees on social networking sites
More than three-fourth of employees use Facebook during office hours
Almost two-third of employees report difficulty in concentrating after using social media
45 percent of employees feel anxious when they are separated from their phones (The Digital Citizenship Project, 2017)
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