According to “Aligning the organization for its digital future,” a study conducted by MIT Sloan Management Review and Deloitte Digital of more than 3,700 business executives, managers and analysts from organizations around the world, some 87% of respondents believe digital technologies will disrupt their industry. At the same time, however, only 44% say their company is adequately preparing for such upheaval. Interestingly, mid-market businesses were slightly more aware of the problem (88%) but also less prepared to tackle it (38%).
There are plenty of reasons for this collective unpreparedness. Many are tied to internal issues, such as a lack of agility, complacency, an inflexible culture or a company position that digital is not a priority.
What happens at companies that aren’t prepared for a digital transformation is pretty predictable: typically, they throw money at piecemeal investments in select technologies and limit their application, instead of fostering wholesale changes that align their organization and strategy around the new technologies.
And that highlights the difference between “doing” digital and “being” digital. The Deloitte/MIT study suggests that developing an effective digital strategy is critical, but when it comes to the middle market, it’s a tale of two halves. Only 56% characterize their employer as integrating its digital strategy into the company’s overall strategy. Less than that (46%) called their company’s digital strategy “forward looking” and focused past the next two years. Even fewer—44%—believe their strategy is “clear and coherent.”
“Instead of addressing problems as they crop up, consider the potential impacts of digital technology on YOUR COMPANY over the coming decade.”
The question now is: What can the other half do to better prepare their organizations for digital disruption?
Attendees at a recent Private Companies DBriefs webcast on the topic offered a few suggestions. They want leaders to help align their organizations for digital transformation, including clearly communicating the company’s digital strategy to employees. They also want leaders to better understand digital trends and the impact of technology on the business.
The DBrief shared three overarching focus areas covered in Deloitte’s recent private company issues and opportunities report:
1. Reimagine a digital future. Many companies behind the curve on digital adoption are simply failing to ask the right questions. Instead of addressing problems as they crop up, these companies should consider the potential impacts of digital technology on their organizations over the coming decade. With that in mind, they can develop a digital strategy that addresses current market realities, but also includes two or three business initiatives that will have the greatest potential to accelerate movement toward the longer-term destination.
2. Shift the cultural mindset. Tightly controlled decision making can be hard for many private and mid-market companies to relinquish. But true digital transformation means exploring new portfolio approaches, encouraging risk-taking and accepting the risk of failure as part of that process.
3. Approach talent needs differently. Companies shouldn’t just match job openings to resumes. New recruits also will need to be able to bridge the gap between the company’s traditional culture and where it wants to be. That means soft skills often will trump technology knowledge when it comes to driving digital transformation.
Learn more at www.deloitte.com/us/pcio
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK 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 US 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.
Doug Palmer is principal and digital strategy leader, Deloitte Consulting LLP
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