What makes an organization digitally mature? That’s one of the key questions that the MIT Sloan Management Review and Deloitte set out to answer in their 2015 global study of digital business: the fourth iteration of a comprehensive annual survey that gathered information and insights from 4,800 business executives, managers, analysts, and thought leaders in 129 countries and across 27 industries.
To help understand the specific ways in which digitally maturing organizations differ from those that are not as far along the path of digital transformation and development, the MIT Sloan/Deloitte survey had respondents essentially self-assess their digital maturity level: respondents were asked to imagine an “ideal” digital organization (in which digital technologies and capabilities had transformed the organization’s business model, processes, and talent engagement), and then to rank their own company on a scale of 1 to 10 against that ideal. The survey revealed that 26% of organizations classified themselves as “Early,” with a self-given ranking of 1 to 3; 45% were “Developing,” with a ranking of 4 to 6; and 29% were “Maturing,” with a ranking of 7 to 10.
Interestingly, when the survey looked more closely at the differences between these self-ranked organizations, a key trend emerged: digital maturity is not just about digital technologies themselves, it’s about how companies integrate those technologies with the goal of transforming the way their businesses work. While survey respondents from early or developing organizations were using individual digital technologies to solve business problems on a case-by-case basis, digitally maturing businesses were not just focusing on the technologies, they were also concentrating on developing their organizational capabilities in order to maximize the impact of those technologies. In other words, effective digital transformation is driven not by technology, but by strategy.
Technology vs. strategy
Industry experts have speculated before on the trap that can await early-stage companies that focus too intensely on technology over strategy. Ultimately, as was the case with previously revolutionary technologies like electricity and rail transport, many technologies will eventually become freely available and thus won’t provide companies with an inherent competitive advantage unless they are proprietary to an individual firm. Instead, technology should be seen and treated as a means to strategic ends rather than as an end in and of itself.
In this regard, survey numbers clearly show the discrepancy between early-stage and digitally maturing organizations. Only 15% of survey respondents from early-stage organizations acknowledged that a clear and coherent digital strategy was at work in their company. For digitally maturing respondents, that figure was an impressive 81%. Furthermore, only 63% of early-stage respondents agreed or strongly agreed that they were aware of their company’s activities in the digital domain, compared with 90% of respondents from maturing organizations. Finally, the digital activities of early-stage companies still had a strong operational focus, with 80% of respondents from these companies citing greater efficiency and improving the customer experience as key objectives of their digital efforts. On the other hand, 90% of respondents from digitally maturing organizations named business transformation as a key driver of their digital strategies, along with improving innovation and decision-making.
Other survey highlights
The MIT Sloan/Deloitte survey revealed a number of other interesting findings related to how companies achieve digital maturity and what some of the implications of that maturity are. These highlights include the following:
The use of skill-building to realize digital strategy—Digitally maturing organizations know that the skills needed to build and implement digital strategy in a company don’t just develop on their own. That’s why these organizations are four times more likely than early-stage organizations to invest in needed employee skill development.
Digital maturity leads to risk-taking—The more digitally mature an organization is, according to survey results, the more comfortable it is with taking risks. A large part of this involves adjusting the organizational mindset to embrace failure as a prerequisite for success: something that early-stage organization employees and managers find challenging.
Strong leadership from the top is a key element of digital transformation—Compared with early-stage organizations, digitally maturing companies are almost twice as likely to have a single person or group leading digital development (as opposed to a scenario in which no specific person or group clearly holds digital responsibility). Furthermore, while the digital fluency of their leaders is a quality that employees in digitally maturing organizations value and trust, that fluency is much more about the ability to articulate why digital technologies matter to the organization than it is about mastering the technologies themselves.
An organization’s digital maturity matters to prospective employees—Organizations that struggle with achieving digital maturity may find it increasingly challenging to attract and retain talented employees. The vast majority of respondents across a broad range of age groups (22 to 60) specified that working for digitally enabled organizations is an important priority; this means that employees are actively seeking the best digital opportunities, and are not inclined to consider companies that don’t have a high enough level of digital maturity.