Coming of Age Digitally

Learning, Leadership, and Legacy

by: Gerald C. Kane, Doug Palmer, Anh Nguyen Phillips, David Kiron, and Natasha Buckley
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Adapting to increasingly digital market environments and taking advantage of digital technologies to improve operations and drive new customer value are important goals for nearly every contemporary business. The good news is that many companies are beginning to make the necessary changes to adapt their organization to a digital environment.

Based on a global survey of more than 4,300 managers, executives, and analysts and 17 interviews with executives and thought leaders, MIT Sloan Management Review and Deloitte’s1 fourth annual study of digital business shows that the digital business environment is fundamentally different from the traditional one. Digitally maturing companies recognize the differences and are evolving how they learn and lead in order to adapt and succeed in a rapidly changing market. This year’s research provides some important insights into how companies are adapting to a digital business environment:



  • Organizations are beginning to make progress digitally. For the first time in four years, we’ve seen an uptick in how survey respondents evaluate their company’s digital maturity. Many established companies are beginning to take digital disruption more seriously and respond. If companies were waiting for competitors to act before responding, this shift suggests the time to act is now.
  • Developing — not just having — digital leaders sets digitally maturing companies apart. Simply having the right digital leaders is not the most important indicator of digital maturity ― more than 50% of digitally maturing companies still report needing new leaders. Yet, these maturing companies were far more likely to report taking steps to develop the right leaders. The most digitally mature organizations are more than four times more likely to be developing needed digital leaders than the least digitally mature ones. Key traits of effective digital leadership are about enabling the organization: providing vision and purpose, creating conditions to experiment, empowering people to think differently, and getting people to collaborate across boundaries.
  • Digitally maturing companies push decision-making further down into the organization. At the same time, there appears to be a disconnect between the C-suite and middle managers regarding this.

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References

1. Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a U.K. private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. In the United States, Deloitte refers to one or more of the U.S. member firms of DTTL, their related entities that operate using the “Deloitte” name in the United States, and their respective affiliates. Certain services may not be available to attest clients under the rules and regulations of public accounting. Please see www.deloitte.com/about to learn more about our global network of member firms.

2. D. Agarwal, J. Bersin, G. Lahiri, J. Schwartz, and E. Volini, “The Workforce Ecosystem: Managing Beyond the Enterprise,” 2018 Global Human Capital Trends, Deloitte Insights, March 28, 2018, www2.deloitte.com; and G.C. Kane, D. Palmer, A.N. Phillips, and D. Kiron. “Winning the War for Digital Talent,” MIT Sloan Management Review 58, no. 2 (winter 2017): 17-19.

3. A. Huspeni, “Why Mark Zuckerberg Runs 10,000 Facebook Versions a Day,” Entrepreneur, May 24, 2017, www.entrepreneur.com.

4. J.G. March, “Exploration and Exploitation in Organizational Learning,” Organization Science 2, no. 1 (February 1991): 71-87.

5. C.A. O’Reilly III and M.L. Tushman, “The Ambidextrous Organization,” Harvard Business Review 82, no. 4 (April 2004): 74.

6. G.C. Kane, D. Palmer, A.N. Phillips, D. Kiron, and N. Buckley, “Achieving Digital Maturity,” MIT Sloan Management Review and Deloitte University Press, July 2017.

7. G.C. Kane and A.N. Phillips, “Cultivating a Culture of Cross-Functional Teaming and Learning at CarMax,” MIT Sloan Management Review, Aug. 11, 2017, www.sloanreview.mit.edu.

8. J. Birkinshaw, “What to Expect From Agile,” MIT Sloan Management Review 59, no. 2 (winter 2018): 39-42.

9. M. Bonchek, “Why the Problem With Learning Is Unlearning,” Harvard Business Review, Nov. 3, 2016, https://hbr.org.

i. C.S. Dweck, “Mindset: The New Psychology of Success” (New York: Random House, 2006).

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Comments (2)
Ravi M
Many organizations have not matured in their digital quest. They are still in the process of "doing digital" versus "being digital". Many of these firms think implementing yet another widget is a panacea. We believe to be successful, companies must build the digital transformation on a sound framework. A digital business capability map may help. 
Vicky Duque
The study is very interesting, you ask how to support medium-sized companies to start this process into the digital age without dying in the attempt