Moving digital transformation forward: Findings from the 2016 digital business global executive...

Moving digital transformation forward

The research3,700OVER Survey of business executives, managers, and

analysts from organizations globally to understand how the digital enterprise is evolving

34% 66%

Respondents were

countries131 27

industries org sizes

Executives & subject matter specialists15 Feature report

to be published

United States otherVARIOUS

JULY 2016©2016 Deloitte Development LLC. All rights reserved.Source: 2016 MIT SMR and Deloitte Digital business research

“imagine an ideal organization

transformed by digital technologies

and capabilities that improve

processes, engage talent across the

organization and drive new value-

generating business models.”

rate their company against that ideal

on a scale of 1 to 10. Three maturity

groups were observed, ‘early’ (1-3),

‘developing’ (4-6), and ‘maturing’ (7-10).

We asked respondents to:

We then asked them to:

Source: 2016 MIT SMR and Deloitte Digital business research ©2016 Deloitte Development LLC. All rights reserved.

Digital maturity needs cultivation and vision

INTERNAL OBSTACLES ARE THE BIGGEST REASON COMPANIES FALL BEHIND.

The results:

©2016 Deloitte Development LLC. All rights reserved.

Digitally maturing organizations typically experiment rapidly, take risks, invest in their own talent, and value soft skills in leaders more than technology expertise.


Most organizations are still striving to reach maturing levelOrganization digital maturity (on a scale of 1–10)


Source: 2016 MIT SMR and Deloitte Digital business research

feel their organizations are adequately preparing for disruptions projected to occur in their industry due to digital trends

of respondents believe digital technologies will disrupt their industry


“Many business leaders still believe that if your product exists in the physical world, you can't be digitally disrupted.”Arun Sundararajan, professor of business at New York University and author of The Sharing EconomySource: 2016 MIT SMR and Deloitte Digital business research ©2016 Deloitte Development LLC. All rights reserved.

“That’s the wrong attitude. Any responsible company today should view digital technologies as a means to create a more efficient organization or a different form of customer engagement, irrespective of how physical the product may be.”

Arun Sundararajan, professor of business at New York University and author of The Sharing EconomySource: 2016 MIT SMR and Deloitte Digital business research ©2016 Deloitte Development LLC. All rights reserved.

Talent

Maturing companies develop from within. People who aren’t getting digital

opportunities may leave.

WAIT...WHERE’S EVERYONE GOING?



Talent gap is acute, and may growMY ORGANIZATION’S EMBRACE OF DIGITAL ATTRACTS NEW TALENT(% of respondents agree/strongly agree)

MY ORGANIZATION NEEDS NEW TALENT TO COMPETEIN THE DIGITAL ECONOMY(% of respondents agree/strongly agree)

Organizational Digital Maturity

Resp

onde

nts


…and the war for digital talent is heating up; talent may take flight% who plan to leave their company in less than one year given digital trends:

as many VP level leaders at risk of leaving in

6 TIMES

1 YEARSource: 2016 MIT SMR and Deloitte Digital business research ©2016 Deloitte Development LLC. All rights reserved.

Culture

Motivating cultural traits are shared across maturing companies.

CORPORATE DIGITAL CULTURE MATTERS…A LOT.


Digitally maturing organizations adhere to a distinct culture mindset


In-house talent becomes critical as you mature


MATURING & DEVELOPING COMPANIES TEND TO FIRST LOOK INSIDE, NOT OUT

1. Hire Contractors/Consultants Develop Employees Develop Employees

2. Don't know External Relationships Recruit Digital Employees

3. External Relationships Hire Contractors/Consultants External Relationships

4. Develop Employees Recruit Digital Employees Recruit Digital Leaders

How is your organization primarily strengthening digital innovation capabilities?


Digitally maturing companies are consistent in how they work across the enterpriseORGANIZATIONAL CONGRUENCE

INPUTS STRATEGY TASKS STRUCTURE

PEOPLE

CULTURE

OUTPUTS

Continuous feedback; learning and adapting

Based on concepts from A Model for Diagnosing Organizational Behavior, David Nadler, Michael Tushman, American Management Association. ©2016 Deloitte Development LLC. All rights reserved.

Leadership

Leaders with vision are critical to driving digital changes.

STEADY AT THE HELM


Leadership requirements don’t change

18%

FORWARDLOOKING 20%

TECHNOLOGYUNDERSTANDING

CHANGEORIENTED 18%

TRANSFORMATIVE VISION 22%


REGARDLESS OF MATURITY LEVEL, A RANGE OF SKILLS ARE VALUED©2016 Deloitte Development LLC. All rights reserved.

Effective change management is imperative to making the transformation from “doing” digital to “being” digital.


Strategy

Take a long-term view. Longer than that.

No, even longer.

WHERE DO YOU GO FROM HERE?


“Time frames greater than 10 years may be needed in a digital environment.”John Hagel, co-chairman of the Center for the Edge at Deloitte

©2016 Deloitte Development LLC. All rights reserved.Source: 2016 MIT SMR and Deloitte Digital business research

Digital strategies are evolving


23%

54%

81%

38%

64%

86%

34%46%

52%

Clear and coherent Integrated into overall company strategy

Forward looking (2 years or greater)

…BUT DIGITAL STRATEGIES EVEN FOR MATURING COMPANIES MAY NOT LOOK LONG ENOUGH INTO THE FUTURE.

Company’s digital maturity level:

My company’s digital strategy is…


Silicon Valley companies follow a ‘Zoom Out and Zoom In’ approach:


Consider Address the next

time horizon by defining what the market will likely look like and what customers will expect.

and identify the two or three business initiatives that will have the greatest potential to accelerate movement toward the longer-term destination.


To read the full report, visit sloanreview.mit.edu/digital2016

To understand the challenges and opportunities associated with the use of social and digital business, MIT Sloan Management Review, in collaboration with Deloitte*, conducted a fifth annual survey of over 3,700 business executives, managers, and analysts from organizations around the world.

*As used in this document, “Deloitte” means Deloitte Consulting LLP and Deloitte Services LP, which are separate subsidiaries of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not available to attest clients under the rules and regulations of public accounting.

Deloitte University Press |“Aligning the Organization for Its Digital Future” @DU_Press @DeloitteDigital @MITSMR #digitalevolution


Moving digital transformation forward: Findings from the 2016 digital business global executive...

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