Digital Leadership

In Collaboration With:

The Digital Leadership Initiative explores the growing use of digital technologies in the business landscape. Through a series of annual reports, blogs, articles, and case studies, the exploration examines how companies are cultivating opportunities and addressing risks in a fast-moving, digital market environment.

As more companies strive to develop new digital capabilities, many are making significant changes to their organizational culture, strategy-making process, and talent management efforts. These shifts raise important questions about what it means to lead a digital business. These questions, and more, are the focus of MIT SMR’s Big Ideas Digital Leadership Initiative.

Research and analysis for this program is in collaboration with Deloitte Digital, which also provides financial support.

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What We Publish, and Why

When we consider articles for publication, we look for three things: ideas that will help managers navigate an increasingly digital world, evidence-based thinking, and accessible frameworks and recommendations that readers can apply. We’re eager to hear from our readers about what they value in MIT SMR, what topics they would like to see us explore more often or more deeply, and what we could do better.

Creating Digital Offerings Customers Will Buy

How can companies decide which new digital offerings to pursue? Successful digital offerings are created at the intersection of what technologies can deliver and what customers want and will pay for. That point of intersection, however, has proved to be elusive. To find it, companies must experiment repeatedly, cocreate with customers, and assemble cross-functional development teams — and the insights gleaned along the way must be shared internally.

The Best of This Week

  • Read Time: 2 min 

The must-reads MIT SMR editors are most excited about this week, including: Why emotion is a key ingredient for getting customer experiences to stick, what we can learn from Germany’s platform economy, the best leader for your digital transformation effort might not be the obvious candidate, and more.

Digital Success Requires Breaking Rules

  • Read Time: 6 min 

Developing new rules for the digital age is proving uncomfortable for people at every organizational level. Digitization (the transformation for operational excellence) requires top-down leadership principles with centralized accountabilities, while success with digital business (the transformation toward rapid innovation) requires local empowerment with distributed accountabilities. These are basically opposite approaches to accountability, but they’re both necessary.

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Accelerating Digital Innovation Inside and Out

In the 2019 Digital Business Report, MIT SMR and Deloitte’s survey analysis and executive interviews unveil the distinctive characteristics of innovation in digitally maturing organizations. Ecosystems and cross-functional teams allow them to be agile, but this increased agility demands a thorough consideration of governance as well.

Four Profiles of Successful Digital Executives

  • Frontiers

  • Research Highlight
  • Read Time: 10 min 

Hoping a jack-of-all-trades can lead your organization’s digital transition is unrealistic. We found four distinct types of successful digital executives who can best provide vision and purpose for digital. Crucially, each type has unique strengths and performs best in different contexts.

How Digital Trust Drives Culture Change

  • Frontiers

  • Research Highlight
  • Read Time: 10 min 

Beliefs and behaviors in today’s virtual world blur the definitions and boundaries of responsibility for data privacy, which is reshaping consumers’ expectations of protection. Organizations seeking to adapt their culture toward better digital trust face many challenges but can benefit from four activities in their journey toward better digital trust.

It Pays to Have a Digitally Savvy Board

Companies whose boards of directors have digital savvy outperform companies whose boards lack it: Among companies with over $1 billion of revenues, 24% had digitally savvy boards, and those businesses significantly outperformed others on key metrics such as revenue growth, ROA, and market cap growth. Companies can improve their boards by knowing what characteristics to look for in existing and new board members, managing board agendas differently, and cultivating new learning opportunities.

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How Digital Leadership Is(n’t) Different

Many of us assume that the leadership handbook must be completely rewritten for the digital age. Is this true? Or are we overly focused on what’s changing and thus neglecting the fundamentals? There is something to be said for both arguments. While many core leadership skills remain the same, the demands of digital disruption call for certain new ones, as well. This article explores which are which and what we can learn from organizations that are digitally maturing.

Act Like a Startup

  • Read Time: 7 min 

As leaders of established businesses focus on becoming digital, they often embrace the mantra, act like a startup. A startup is an experiment, and its early goal is to learn, as quickly and inexpensively as possible, if an idea has merit. That same ability to figure out how a new value proposition might create revenues and profits is key to digital success. Established companies that want to test ideas for such propositions should be nurturing four traits of startups.

Let Your Digital Strategy Emerge

  • Read Time: 7 min 

What can digital technologies do to help an organization solve customer problems? And what solutions will customers find valuable? It’s only when leaders wrestle with these questions that a digital strategy can emerge. To get there, organizations need to create a portfolio of business experiments and engage with customers to gain insight into their problems and potential solutions. The intersection between what’s possible and what’s desired is where a business will succeed.

Goodbye Structure; Hello Accountability

  • Read Time: 7 min 

Companies will be able to operate as true digital organizations only when they learn how to respond quickly to unanticipated opportunities and threats. But instead of restructuring to increase agility, some organizations are assigning accountabilities for specific business outcomes to small teams or individual problem owners. Tackling new objectives is then built around individual flexibility, market-based resource allocation, experimental mindsets, and coaching rather than managing.

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Digital Is About Speed — But It Takes a Long Time

  • Read Time: 6 min 

The ability of digital technologies to accelerate business is giving rise to new value propositions — new ways to eliminate hassles and create solutions. But research from MIT’s Center for Information Systems Research suggests that while business leaders need to start redesigning their existing systems and roles to better solve customers’ problems, they will not be able to do so quickly. Case in point: The slow and steady digital transformation of Dutch technology company Royal Philips.

The New Digital Mandate: Cultivate Dissatisfaction

  • Read Time: 7 min 

Employee satisfaction can be a double-edged sword. Satisfied employees produce higher quality-outputs and have less turnover. But satisfaction can inhibit innovation: People who are OK with the current way of doing business are not likely to transform it. They need to be aggravated enough with their current situation that they are willing to take the risks to change it. By sowing the right kinds of dissatisfaction, leaders can drive their organizations to higher levels of innovation and value.

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