Does Your C-Suite Have Enough Digital Smarts?

Peter Weill, Stephanie L. Woerner, and Aman M. Shah
March 03, 2021

Executive teams that understand how to wield the power of digital technologies are rare, but they deliver huge premiums in corporate growth and valuation.

Image courtesy of Anna & Elena Balbusso/theispot.com

The Research

The authors identified 251 keywords and phrases that describe a digitally savvy executive by obtaining executive input, manually coding executive bios from companies with digitally savvy boards (from a previous MIT CISR study), and applying natural language processing techniques.
They used the S&P Market Intelligence Platform and the Capital IQ platform, with natural language processing, to identify the keywords and phrases in 16,841 executive biographies from 1,984 companies with revenues of more than $2.9 billion as of 2018.
They identified 1,311 companies in the executive data set that also appeared in the global MIT CISR 2019 Top Management Team and Transformation Survey, created a company variable based on their operational efficiency and customer experience as a proxy for a digitally savvy executive team, and observed a significant correlation between the two sets of companies in terms of digital savviness.
The authors used the survey proxy variable to identify the practices of digitally savvy executive teams.

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.

References

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.

Does Your C-Suite Have Enough Digital Smarts?

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