Vijay Govindarajan (Tuck School of Business, Dartmouth College) and Jeffrey R. Immelt (Athenahealth, New Enterprise Associates, Desktop Metal)
Although most manufacturers are beginning to flirt with emerging technologies, not one has successfully pulled off a digital transformation. CEOs still have to figure out the art and science of it. This article explores why it’s so difficult for industrial companies in particular and shares key insights from the authors’ deep experience and research. One of the authors (Immelt) spearheaded a digital transformation, among several other major change initiatives, at GE, and the other (Govindarajan) has been studying innovation and change in large companies, including GE, for decades.
GE was probably the first manufacturer to internalize that digital technologies could disrupt its businesses. It faced uphill battles in its efforts to start and sustain its digital transformation, and those experiences provide useful insights for executives wrestling with the challenge. To escape inertia and enable their companies to become digital-industrials, leaders of manufacturers must prevent core competencies from becoming rigidities that inhibit change, integrate digital hires with engineers (who learn, think, and function very differently) to form a new set of capabilities, and champion a shift from a culture of continuous improvement to one of constant innovation.
Gerald C. Kane (Boston College), Anh Nguyen Phillips (Deloitte), Jonathan Copulsky (Northwestern University), and Garth Andrus (Deloitte)
The rapid changes associated with digital disruption can be so disorienting that many of us assume the leadership handbook must be completely rewritten for the digital age. Is this true? Or are greater and greater levels of uncertainty causing us to neglect the essentials? Is it possible that the leadership challenges of the digital world are more the same than different, but we are overly focused on what’s different because we are so alarmed by the threats to the status quo?
There is something to be said for both arguments. Over the past five years, in a joint research project with MIT Sloan Management Review and Deloitte, the authors of this article have studied how business and leadership are changing as a result of digital disruption. They have found that while many core leadership skills remain the same, the particular demands of digital disruption call for certain new skills, as well.