Benchmarking Digital Transformation #Infographic
Many companies are responding to an increasingly digital market environment by adding roles with a digital focus or changing traditional roles to have a digital orientation. The list of “digital” business roles and functions is extensive and growing. There are now digital strategists, chief digital officers, digital engagement managers, digital finance managers, digital marketing managers, and digital supply chain managers, among other positions.
Despite the proliferation of digital roles and responsibilities, most executives recognize that their companies are not adequately preparing for the industry disruptions they expect to emerge from digital trends. Nearly 90% of respondents to a 2015 global survey of managers and executives conducted by MIT Sloan Management Review and Deloitte1anticipate that their industries will be disrupted by digital trends to a great or moderate extent, but only 44% say their organizations are adequately preparing for the disruptions to come.
Preparing for a digital future is no easy task. It means developing digital capabilities in which a company’s activities, people, culture, and structure are in sync and aligned toward a set of organizational goals. Most companies, however, are constrained by a lack of resources, a lack of talent, and the pull of other priorities, leaving executives to manage digital initiatives that either take the form of projects or are limited to activities within a given division, function, or channel.
Despite this, some companies are transcending these constraints, achieving digital capabilities that cut across the enterprise. Our research found that nearly 90% of digitally maturing organizations — companies in which digital technology has transformed processes, talent engagement, and business models — are integrating their digital strategy with the company’s overall strategy. Managers in these digitally maturing companies are much more likely to believe that they are adequately preparing for the industry disruptions they anticipate arising from digital trends.
A key finding in this year’s study is that digitally maturing organizations have organizational cultures that share common features. These features consistently appear in digitally maturing companies across different industries. The main characteristics of digital cultures include: an expanded appetite for risk, rapid experimentation, heavy investment in talent, and recruiting and developing leaders who excel at “soft” skills. Leading a digital company does not require technologists at the helm.
To help companies better prepare for their digital futures, we delved into how digitally maturing organizations strengthen their cultures and develop the talent that drives them. Highlights of our findings include the following:
Creating an effective digital culture is an intentional effort: Digitally maturing companies are constantly cultivating their cultures. Nearly 80% of respondents from digitally maturing companies say their companies are actively engaged in efforts to bolster risk taking, agility, and collaboration. Only 23% of companies at the early stages of digital development are doing so.
Senior-level talent appears more committed to digitally maturing enterprises: Companies that give their senior vice presidents, vice presidents, and director-level leaders the resources and opportunities to develop themselves in a digital environment are more likely to retain their talent. In contrast, approximately 30% of such leaders who lack such opportunities are planning to find new jobs in less than one year.
Digitally maturing organizations invest in their own talent: More than 75% of digitally maturing organizations surveyed provide their employees with resources and opportunities to develop their digital acumen, compared to only 14% of early-stage companies. Success appears to breed success — 71% of digitally maturing companies say they are able to attract new talent based on their use of digital, while only 10% of their early-stage peers can do so.
Soft skills trump technology knowledge in driving digital transformation: When asked about the most important skill for leaders to succeed in a digital environment, only 18% of respondents listed technological skills as most important. Instead, they highlighted managerial attributes such as having a transformative vision (22%), being a forward thinker (20%), having a change-oriented mindset (18%), or other leadership and collaborative skills (22%). A similar emphasis on organizational skills above technical ones for succeeding in digital environments was also reported for employees.
Digital congruence is the crux: To navigate the complexity of digital business, companies should consider embracing what we call digital congruence — culture, people, structure, and tasks aligned with each other, company strategy, and the challenges of a constantly changing digital landscape. For example, a conservative and hierarchical organization populated with energetic entrepreneurs may not be able to harness their drive and energy. Similarly, an organization with a flat and nimble structure may still struggle if its culture fears risk. When culture, people, structure, and tasks are firing in sync, however, businesses can move forward successfully and confidently.
If your organization is moving toward digital too slowly, your people may be looking to leave. That’s one of the findings highlighted here and explored more fully in Aligning the organization for its digital future.
Source: MIT Sloan Management Review, in collaboration with Deloitte