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2018
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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.
About the Authors:

Gerald C. Kane is the MIT Sloan Management Review guest editor for the Digital Business Initiative and a professor of information systems at the Carroll School of Management at Boston College.

Doug Palmer is a principal in the Digital Business and Strategy practice of Deloitte Digital.

Anh Nguyen Phillips is a senior manager within Deloitte Services LP, where she leads research on digital transformation and other strategic initiatives.

David Kiron is the executive editor of MIT Sloan Management Review, which brings ideas from the world of thinkers to the executives and managers who use them.

Natasha Buckley is a senior manager within Deloitte Services LP, where she researches emerging topics in the business technology market.


Contributors

Garth Andrus, Desiree Barry, Mark Cotteleer, Deb Gallagher, Swati Garg, Carolyn Ann Geason, Nidal Haddad, Paula Klein, Saurabh Rijhwani, Daniel Rimm, Lauren Rosano, and Allison Ryder.


Acknowledgments

Carliss Baldwin, William L. White Professor of Business Administration, Harvard Business School

Maile Carnegie, group executive of digital banking, Australia and New Zealand Banking Group Ltd.

John Glaser, vice president of population health, Cerner Corp.

Barbara Goose, senior vice president and chief marketing officer, John Hancock Financial Services Inc.

John Hagel, cochairman, Center for the Edge, Deloitte LLP

Dr. John Halamka, chief information officer, Beth Israel Deaconess Medical Center

Kimberly Lau, senior vice president of digital and head of business development, The Atlantic

James Macaulay, senior director, Cisco Digitization Office, Cisco Systems Inc.

Ed Marsh, people strategy and executive coach

Santa J. Ono, president and vice chancellor, University of British Columbia

Kelly Palmer, chief learning and talent officer, Degreed

Colin Schiller, president, Everwise Corp.

Janice Semper, culture transformation leader, General Electric Co.

Lindsay Sutton, assistant vice president and digital strategy lead, John Hancock Financial Services Inc.

Melissa Valentine, assistant professor, management science and engineering, Stanford University

Ben Waber, president and CEO, Humanyze

George Westerman, principal research scientist, MIT Sloan Initiative on the Digital Economy


MIT Sloan Management Review

MIT Sloan Management Review leads the discourse among academic researchers, business executives, and other influential thought leaders about advances in management practice that are transforming how people lead and innovate. MIT SMR disseminates new management research and innovative ideas so that thoughtful executives can capitalize on the opportunities generated by rapid organizational, technological, and societal change.

Deloitte

This publication contains general information only and is based on the experiences and research of Deloitte practitioners. Deloitte is not, by means of this publication, rendering business, financial, investment or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte, its affiliates and related entities shall not be responsible for any loss sustained by any person who relies on this publication.

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.

Deloitte Digital has created a new model for a new age — a creative digital consultancy. That means bringing together all the creative and technology capabilities, business acumen and industry insight needed to help transform clients’ businesses with digital. With Deloitte Digital’s end-to-end capabilities, clients bring their greatest ambitions, knowing Deloitte Digital has what it takes to bring new business visions to life.

Deloitte Insights publishes original articles, reports and periodicals that provide insights for businesses, the public sector and NGOs. Our goal is to draw upon research and experience from our professional services organization, and that of coauthors in academia and business, to advance the conversation on a broad spectrum of topics of interest to executives and government leaders. You may contact the authors or send an email to insights@deloitte.com for more information.

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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).

2 Comments On: Coming of Age Digitally

  • Vicky Duque | June 6, 2018

    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

  • Ravi M | August 6, 2018

    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.

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