It’s a lesson that has to keep get driven home again and again: buying and installing all the latest technologies, and thinking it will all magically transform an organization with moribund processes into an overnight dynamo, is misguided — and expensive — thinking. That’s the problem with “digital transformation” — it’s one of those feel-good terms that suggests enterprise leaders are recognizing that their futures lie in leveraging technology to create and deliver spectacular customer experiences, along with new types of goods and services.
Before laying on the technology, organizations need to be forward-looking and open to innovation and disruption. There is some evidence emerging that moving in the right direction — with digital technologies supporting such efforts — is starting to pay off. That’s the word from a recent survey of 4,300 executives conducted by Deloitte and MIT Sloan Management Review. The team of researchers, led by Gerald Kane of Boston College, “found digitally mature companies are better at developing digital leaders, pushing decision-making deeper, and responding faster to the marketplace, and are more likely to experiment.”
These “digitally mature” companies that Kane’s team teased out of the data are different from the rest. What’s important to note is they aren’t organizations that simply buy boatloads of new technology and drop them on top of their workforces. If anything, they recognize that digital transformation has to come from within – adopting forward-looking attitudes, encouraging innovation at levels, and enabling decision-making at all levels. “Digitally maturing companies push decision-making further down into the organization,” Kane and his co-authors state.
What’s important is that employees need to recognize – and have confidence – that they are helping to guide this change. “Some of our evidence suggests that employees may be reluctant to step up and assume their roles as digital leaders,” the researchers state. Tellingly, the digital leaders are characterized by their “pace of business; culture and mindset; and a flexible, distributed workplace,” they find. “Such findings mean many companies should change how they operate in order to compete.”
Important factors driving digital success include “the need to experiment and take risks, dealing with ambiguity and constant change, buying and implementing the right technology, and distributed decision-making.”
Innovation – more importantly, a spirit of innovation – is the common denominator of successful digital enterprises, Kane and his team find. “Digitally maturing organizations are more likely to experiment and iterate,” they explain. “Experimentation and iteration are key ways companies respond to digital disruption.” The results of such experiments need to be employed to drive change.
They alone, however, are not enough. Companies should use the results of those experiments—successes and failures—to drive change across the organization. Companies with abundant resources may be tempted to just “throw money at the problem” of digital disruption, but that doesn’t generally lead to continuous and actionable learning in the way that experimentation does. Instead, established companies should figure out how to experiment to compete in the future while also maintaining the core business so that it can perform in the present.”
Continuous learning is another common denominator within digitally successful organizations. Tellingly, 90 percent of employees “indicate they want to use data analytics from their organization to help them improve their own performance.”