Aligning the Organization for Its Digital Future

by: Gerald C. Kane, Doug Palmer, Anh Nguyen Phillips, David Kiron, and Natasha Buckley
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Many companies are responding to an increasingly digital market environment by adding roles with a digital focus or changing traditional roles to have a digital orientation. The list of “digital” business roles and functions is extensive and growing. There are now digital strategists, chief digital officers, digital engagement managers, digital finance managers, digital marketing managers, and digital supply chain managers, among other positions.

Despite the proliferation of digital roles and responsibilities, most executives recognize that their companies are not adequately preparing for the industry disruptions they expect to emerge from digital trends. Nearly 90% of respondents to a 2015 global survey of managers and executives conducted by MIT Sloan Management Review and Deloitte1 anticipate that their industries will be disrupted by digital trends to a great or moderate extent, but only 44% say their organizations are adequately preparing for the disruptions to come.

Preparing for a digital future is no easy task. It means developing digital capabilities in which a company’s activities, people, culture, and structure are in sync and aligned toward a set of organizational goals. Most companies, however, are constrained by a lack of resources, a lack of talent, and the pull of other priorities, leaving executives to manage digital initiatives that either take the form of projects or are limited to activities within a given division, function, or channel.

Despite this, some companies are transcending these constraints, achieving digital capabilities that cut across the enterprise. Our research found that nearly 90% of digitally maturing organizations — companies in which digital technology has transformed processes, talent engagement, and business models — are integrating their digital strategy with the company’s overall strategy. Managers in these digitally maturing companies are much more likely to believe that they are adequately preparing for the industry disruptions they anticipate arising from digital trends.

A key finding in this year’s study is that digitally maturing organizations have organizational cultures that share common features. These features consistently appear in digitally maturing companies across different industries.

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References

1. 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 be available to attest clients under the rules and regulations of public accounting.

2. “The Most Innovative Companies of 2016,” n.d., www.fastcompany.com.

3. T. Olavsrud, “How GE Will Bring the Industrial IoT to Life,” March 16, 2016, www.bloomberg.com.

4. D.A. Nadler and M.L. Tushman, “A Model for Diagnosing Organizational Behavior,” Organizational Dynamics 9, no. 2 (1980): 35-51.

5. For a discussion of the “tour of duty” for businesses, see R. Hofman, B. Casnocha, and C. Yeh, The Alliance: Managing Talent in the Networked Age (Boston: Harvard Business Review Press, 2014).

6. Harvard Business Review and Marketo, “Designing a Marketing Organization for the Digital Age,” October 2015, http://hbr.org.

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