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There’s little doubt that the future of business is digital. Companies that are in the lead implementing digital technologies have radically improved their operational efficiency and their customers’ experiences. And, even more important, the new capabilities unlocked by digital technologies have allowed them to reimagine their purposes and their business models.
Having a digitally savvy top leadership team — that is, a team in which more than half of the executive members are digitally savvy — makes a huge difference. Our latest research shows that large enterprises with digitally savvy executive teams outperformed comparable companies without such teams by more than 48% based on revenue growth and valuation.
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Digital savviness is an understanding, developed through experience and education, of the impact that emerging technologies will have on a business’s success over the next decade. Sharing this understanding across the top management team is a key ingredient in the success of corporate transformation. As Jean-Pascal Tricoire, chairman and CEO of energy management company Schneider Electric, told us, “When every business becomes a digital business, every executive needs to take digital transformation personally. The last thing you want in your team is the belief that digital is somebody else’s problem.”
Unfortunately, the demand for digital savviness in the upper echelons of leadership has grown far more quickly than the supply. In 2019, when we studied the boards of directors in 3,228 large U.S.-
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1. P. Weill, T. Apel, S.L. Woerner, et al., “It Pays to Have a Digitally Savvy Board,” MIT Sloan Management Review 60, no. 3 (spring 2019): 41-45. In the study described in this article, we defined a board as digitally savvy when it included at least three digitally savvy members.
2. “Q4 & FY 2019 Investor Presentation,” Dunkin’ Brands, Feb. 6, 2020, http://investor.dunkinbrands.com.
3. P. Weill, S.L. Woerner, and N. van der Meulen, “Four Pathways to ‘Future Ready’ That Pay Off,” European Business Review, March 23, 2019, ww.europeanbusinessreview.com.
4. “Cemex Completes Deployment of Cemex Go With Customers Worldwide,” Cemex, May 30, 2019, www.cemexusa.com.
5. “What Makes a Digital Savvy Top Management Team — Gary Scholten,” filmed May 18, 2020, at the MIT CISR Digital Leadership Summit, video, https://cisr.mit.edu.
6. P. Weill, G. Scholten, and S.L. Woerner, “Working With Boards on Digital,” research briefing XIX-9, MIT Sloan CISR, Cambridge, Massachusetts, September 2019.