Succeeding at digital transformation Premium

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Between 2011 and 2014, George Westerman, Didier Bonnet, and Andrew McAfee studied digital transformation in almost 400 non-tech companies and found that only a small minority are succeeding at becoming what the authors call “digital masters.” The fact that digital masters are on average 26% more profitable than their peers — and this performance gap is only set to increase with time — is reason enough for Business Digest to present the study’s key lessons for digital transformation.

Man hand touching the screen

To be a digital master, companies must excel in two dimensions: digital capability and leadership capability. Acquiring digital capability requires investment in customer experience, operational processes, and business model innovation. Leadership capability is about getting everyone in the company on board and moving in the same direction. To transform your company into a digital master, the authors recommend business leaders take the following decisive steps:

1. Frame the digital challenge
40% of the leaders surveyed cite “lack of urgency” as a major obstacle to digital transformation in their companies. To fight inertia, or “the failure to sense the need to change”:
• Build awareness. Start dialogues around the potential threats and opportunities of digital and the need for transformation
• Define your starting point. Analyze the maturity of your current digital competencies, and identify which current strategic assets will help you to excel. Digitally challenge your current business model.
• Create a shared vision. Align other top leaders around a shared vision of your company’s digital future.

2. Focus investment
To focus your early digital transformation investments:
• Translate vision into action. Convert the digital transformation vision into strategic goals, and translate priorities into a roadmap of initial activities.
• Build governance. Design governance mechanisms to steer the transformation in the right direction.
• Fund the transformation. Design a balanced portfolio of digital investments and figure out the funding mechanisms.

3. Sustain the transformation
To ensure the sustainability of your digital transformation:
• Build foundation capabilities. Ensure you have a plan for raising digital competence within your organization and a well-structured digital platform. Strengthen IT-business relationships.
• Align incentives, rewards, and recognitions to your digital transformation objectives.
• Measure, monitor, and iterate. Build a management process that allows you to measure and monitor the progress of your digital transformation and generates enough visibility to adapt course as needed.

Business leader testimony
How did Pernod Ricard deploy its digital transformation? The company’s head of digital, Maël Tannou, explains that they did not leave the establishment and communication of key strategic digital priorities to chance. The first step: get everyone on board.


Based on Leading Digital: Turning Technology into Business Transformation by George Westerman, Didier Bonnet and Andrew McAfee (Harvard Business Review Press, October 2014) and the Interview with Maël Tannou, Head of Digital, Sales and Marketing Solutions, Pernod Ricard Group, January 2015.

À voir, la vidéo :

Leading Digital Authors Meet MIT Sloan Management Review

Michael Hopkins, Editor-in-Chief of MIT Sloan Management Review, meets with the three authors of Leading Digital.