Our latest MIT SMR and Deloitte Digital study reveals a first-time uptick in digital maturity in organizations around the world
Posted by Dr. Doug Palmer on June 29, 2018.
My colleagues and I at Deloitte just completed our 2018 global study of digital trends with MIT Sloan Management Review. This is our fourth year studying the transformative impact of digital business on companies around the world. This year’s study, based on a survey of more than 4,300 business executives, managers, and analysts, shows that more companies are making the necessary changes to adapt their organizations from a traditional environment to a digital environment. As part of this process, companies are evolving how they learn and lead to successfully compete in a continually changing market.
The research shows that these evolving learning and leadership models are making new demands not only of the organization, but also of individuals:
- Employees need be able to learn and develop new skills and capabilities to succeed in a digital business environment. While employees appear eager to learn, their companies may not be providing the development opportunities they need to succeed.
- Leaders also need new capabilities to guide their organizations in a digital environment. Only the digitally maturing companies recognize the need and are developing their leaders with the necessary capabilities.
- Legacy older companies, often restricted by what drove their original success, face unique challenges as they seek new ways to learn and lead in a digital environment.
For the first time in four years, we observed companies making progress in their digital journey: The percentage of respondents who report their company is in the early stage of digital disruption has dropped nearly 9 percentage points from last year, while those reporting their company is in the developing and maturing stages have gone up approximately 3 and 5 percentage points, respectively.1
This uptick indicates to us that companies are beginning to make the necessary changes to adapt their organizations from a traditional environment to a digital environment, including adopting new ways of learning and leading.
Employees need new digital learning opportunities
Because the digital business environment is fundamentally different from the traditional business environment—faster, more distributed, more collaborative—new ways of learning are necessary. Employees are stepping up and want to learn: Nearly half (44 percent) of those surveyed said they need to update their skills “continually.” But they may be getting little support from organizations to do so. Nearly 30 percent of respondents from early-stage companies explicitly indicate that their company provides little to no support for developing digital skills. In addition, only a third of all respondents are satisfied with how their organization is helping them prepare for working in a digital environment.
New ways of leading are required
Most respondents we surveyed, including those from digitally maturing companies, acknowledge their leaders need new capabilities to succeed in a digital environment. Respondents expect their company leaders to be able to provide a clear digital vision, develop conditions that support organizational innovation, and empower people to think differently. Only digitally maturing companies, though, are helping their leaders develop these necessary capabilities. Respondents from digitally maturing organizations are four times more likely to say their companies are effectively developing digital leaders, compared to respondents from early-stage companies.
Our survey also found that employees will increasingly be expected to take on greater leadership roles as decision-making is pushed further into the organization. However, there is a disconnect between executive and middle managers. While 59 percent of CEOs believe they are pushing decision-making down, only about one-third of vice-president and director-level respondents report that it is happening. A similar disconnect exists when we examine companies of different sizes and ages and in different industries. Respondents from smaller companies, younger companies, and the digitally native sectors are more likely to say their organizations are distributing decision-making further into the organization.
Legacy organizations face greater hurdles
Legacy companies, those established organizations older than 25 years, are taking strides to adapt and thrive in a digital world, but more progress is needed. These companies face unique challenges with respect to digital business compared to younger companies. We found that older companies are less likely to be distributing decision-making in their organizations, and their employees appear more resistant to change than peers in younger companies. Furthermore, what drove legacy company success in the past will likely not drive it in the future; companies must continually evolve and adapt. In the report, we suggest ways legacy companies can overcome these challenges through insights from leading companies that exemplify the changes in leadership, learning, and mind-set required for digital maturity.
Opportunities to better learn and lead exist for all
Whether you’re an executive or an employee, in a young start-up or an older legacy company, we all have an opportunity to evolve how we learn and lead in a digital environment. Now is the time for you and your organization to establish conditions that support learning and leading in a rapidly changing digital world. We hope you’ll access the full report and explore the interactive charts included and use them to progress on your own digital journey.
1 To measure digital maturity, we asked respondents to “imagine an ideal organization utilizing digital technologies and capabilities to improve processes, engage talent across the organization, and drive new value-generating business models.” We then asked respondents to rate their company against that ideal on a scale of 1 to 10. Three maturity groups were observed: early (1-3), developing (4-6), and maturing (7-10).