Business leaders in every industry believe that growing and competing in the digital sphere is crucial for their company’s future.
3500 executives, managers, and analysts working in a range of industries across the globe unanimously agree that “being a digital business is important for the success of my company.” This is the finding of the jointly published MIT Sloan Management Review and Deloitte’s third annual survey. The study emphasizes, however, that “progress toward that ideal is a different matter.”
The study dives deeper into the question of a company’s “digital maturity,” probing beneath the surface to find the fundamental differences between those companies succeeding with digital change and those falling behind.
Digital Maturity: Adapting to Rapid Change
In the study, the concept of “maturity” is similar to its definition in psychology – a learned ability to respond to the environment in an appropriate manner. In this context, “Digital maturity is about adapting the organization to compete effectively in an increasingly digital environment.” It’s worth noting that the study’s authors tend to use the term “maturing” to emphasize that digital maturity is an ongoing process.
It’s More than Just Technology
The study confirms that digital maturity is about more than technology. “Although technology is an important part of the story, it certainly isn’t everything. It may not even play a starring role.” As we will see, the digitally mature organizations understand that business advantage will also come through changes to talent, culture and organizational structure.
Business–IT Alignment is the Biggest Challenge
The study found that creating an effective strategy, and linking it to overall business objectives – the alignment between business and IT – remains one of the biggest challenges to increasing a company’s digital maturity. The data is compelling, as “highly mature” companies agreed that digital initiatives are at the core of their business strategy, while less digitally mature companies admitted that their digital initiatives are either “unconnected” to strategy or “mostly talk,” rather than being aligned.
The Key Lessons
The study includes a lengthy report on patterns, trends and responses, but the entire question of digital maturity can be boiled down to five key lessons. To make them easier to digest, we have categorized those five key lessons as: culture, vision, innovation, talent, and leadership.
Let’s have a look at all five categories.
Culture
Digitally maturing companies focus on organizing and developing workforces, spurring innovation and cultivating digitally-minded experiences.
Breaking down silos and focusing on cross-functional collaboration is considered crucial to success in digital environments. The study quotes an executive from Harley-Davidson saying, “It’s just more difficult to think about any function in isolation because the processes are becoming so integrated. The opportunity for integration and collaboration is so great that it drives greater effectiveness and efficiency.” As such, the study found that 70 percent of digitally maturing companies were increasingly organized around cross-functional teams, while only 28 percent of early-stage digital companies use this approach.
Vision
Digitally mature organizations play the “long game.”
Wal-Mart is just one digitally mature organization pushing to play the long game. Jacqui Canney, Walmart’s executive vice president of global people, says that the organization is now looking out 5-10 years into the future to preempt the shift in consumer experience needs. Canney explains: “Between the 5- and 10-year mark, people are going to shop in very different ways and expect different experiences. If we don’t work within that time frame, we could be left behind as a customer choice.”
Innovation
Digitally mature organizations run small digital experiments along with enterprise-wide innovations.
The study found that digitally mature organizations embrace high levels of experimentation in innovation. They are more than twice as likely to conduct small, iterative experiments while maintaining a high tolerance for failure and the ability to learn from it. Furthermore, they are shrewd and creative about keeping those experiments funded, rather than using those funds for more immediate concerns.
Talent
Digitally mature companies strive to become “talent magnets” by placing a premium on attracting and developing the top digital talent.
The study found that executives at the VP level who are without digital opportunities are 15 times more likely to want to leave within a year than those with satisfying digital challenges. Digitally maturing organizations create compelling environments for achieving career growth at every level.
Leadership
Digitally mature companies need strong leadership.
The study reiterated the importance of leadership in reaching business goals. This means securing leaders with the vision to lead digital strategies, along with the willingness to commit sufficient resources to achieve the vision.
Learn More
To learn more about Business–IT alignment and your own company’s route to achieving digital maturity, watch our Storyteller demo today.
