Commentary

Digitally Mature Organizations Have A 4X Lead

According to the sixth annual study by MIT Sloan Management Review (MIT SMR) and Deloitte Digital, 71% of digitally maturing organizations encourage their organizations to experiment and accept the risk of failure, compared to 29% of early stage companies. Only 13% of organizations report that improving technology development and deployment is a source of concern, says the report.

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Nearly 40%say improving digital strategy and innovation is what their organization needs to do differently in order to progress toward digital maturity. In addition, digitally maturing companies are more than four times as likely as non-digitally maturing companies to have a clear and coherent digital strategy in place than other companies (80% of digitally maturing organizations versus 19% of early stage companies).

Based on a global survey of more than 3,500 business executives, managers and analysts from organizations around the world, the study found that successful digitally maturing organizations are becoming talent magnets. Driven by investment from leadership, opportunities to develop in a digital environment, and a culture that rewards collaboration, experimentation and risk taking, these companies are keeping pace with digital change.

  • 77% of digitally maturing organizations recognize and reward collaboration and cross-functional teams as a cornerstone of how they operate, versus slightly more than 34% of early stage entities
  • 75% of digitally maturing entities plan to increase the monies and resources they put into digital business initiatives during the next 12-18 months; only 49% of early stage organizations plan to do so.
  • More than 70% whose leaders have sufficient vision to lead digital efforts say their initiatives are successful, vs. fewer than 25% of those organizations that do not can make the same claim
  • Vice President level executives without sufficient digital opportunities are more than 15x likely to leave within a year than those with satisfying digital challenges

Deloitte Digital's Doug Palmer, co-author of the report and principal, Deloitte Consulting LLP, says “… Cross-functional working is key… companies are increasingly breaking down these silos… by assessing and redesigning processes, workflows and workforce…” 

This year’s study uncovered the following principles for how companies can adapt and change to compete effectively in a digital environment, says the report.

  • 34% of respondents from early stage companies say that their companies spend more time talking about digital business than acting on it. Digital maturity goes beyond the technology and is more about how to sync talent, culture and organizational structures with digital environments. Executives should reconfigure aspects of their organizations and operations to drive digital success
  • Reaching digital maturity is an ongoing process that requires a flexible mindset and an organizational structure that supports the company’s ability to react to digital trends
  • Adequate funding provides the necessary resources to begin driving small experiments into enterprise-wide change 

Gerald (Jerry) Kane, guest editor at MIT SMR and professor of information systems at the Carroll School of Management, Boston College, says “… digitally maturing organizations understand that they have to take a short and long view… crafting  strategies that allow for execution within the next 12-18 months… “ 

And David Kiron, executive editor at MIT SMR, concludes noting that “To create these innovations, companies should foster cultures that embrace risk and create environments where employees want to learn and stay...” 

The MIT Sloan Management Review and Deloitte Digital business study is based on 3,500 business executives, managers, and analysts from organizations around the world. The survey captured insights from individuals in 117 countries and 29 industries, from organizations of various sizes. 

To download and read the full report, please visit MIT SMR here.

 

 

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