Big Idea: Digital Leadership

“One Weird Trick” to Digital Transformation

An effective digital culture is critical to digital maturity.

Gerald (Jerry) C. Kane Reading Time: 4 min 

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Digital Leadership

As organizations rely increasingly on digital technologies, how should they cultivate opportunities and address taking risks in a fast-moving digital market environment?
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Digital Transformation Business Trick Simple Solution

The Internet is rife with ads and websites shilling the “one weird trick” you need to lose weight, obtain a lifetime of wealth, or attract the perfect date. While most of these promises are, of course, too good to be true, they do underscore the very human desire for simple solutions to the problems that plague us. And oddly enough, our research suggests that there really is “one weird trick” that may be critically important to successful digital transformation.

As a part of the research for our recent report on Digital Business, conducted in collaboration with Deloitte, MIT Sloan Management Review surveyed nearly 4,000 executives worldwide and interviewed 17 executives to assess the current state of digital business within the enterprise. As with our previous research, we asked respondents to rate how digitally mature they believe their company to be, on a scale of 1 to 10. We then examined how companies on the low end (which we called “early” digital companies), in the middle (“developing” digital companies), and on the high end (“maturing” digital companies) of this digital maturity scale are similar to and different from one another.

This year’s research yielded a plethora of rich insights, but one that may appear to be the least interesting ultimately could prove to be the most important.

This year, we asked survey respondents to evaluate the culture of their organizations on a series of five different scales that captured the company’s appetite for risk, leadership structure, work style, agility, and decision-making style. We then performed a statistical technique called cluster analysis, which groups similar types of responses together. We expected that our data analysis would reveal that companies could be characterized by certain “personality types” — for example, we thought we’d find that risk-averse, collaborative companies exhibit different approaches to digital maturity than centralized, agile companies.

I had hoped to develop catchy names for these differing groups and organize them under a heading like “the four paths to digital maturity.” In doing so, I hoped to move this year’s report beyond our compelling but relatively simple categorization of early, developing, and maturing companies to a more nuanced and variegated understanding of how companies engage in digital business.

Topics

Digital Leadership

As organizations rely increasingly on digital technologies, how should they cultivate opportunities and address taking risks in a fast-moving digital market environment?
More in this series

About the Author

Gerald C. (Jerry) Kane is an associate professor of information systems at the Carroll School of Management at Boston College and the MIT Sloan Management Review guest editor for the Digital Business Initiative. He can be reached at gerald.kane@bc.edu and on Twitter at @profkane.

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Comments (2)
David Dunworth
Gentlemen, Please return to your corners.  

Mr. Kane's assertions re completely valid, as are Mr. Ageyev's perspective.  These two points of view, perspectives, beliefs or assertions are just that; individual.  For those of us who do not play in a large sand box, digital transformation is all but a mystery as to where to start, or where to look for help to understand.  Neither of you help the SMALL BUSINESS OWNER gain a foothold on understanding.

Mr. Ageyev's LinkedIn article (revised version) does an exemplary job of showing us the flip side of Mr. Kane's enterprise coin.

I enjoyed reading your respective articles, and congratulate you both on your position on enterprise transformation.

David J Dunworth
Chief Experiences Officer
Marketing Partners LLC
http://marketingpartnersllc.com
Igor Ageyev
Hello Gerald,

Interesting result, isn’t it? 

It may be driven by the key question of the research:” imagine an ideal organization transformed by digital technologies and capabilities that improve processes, engage talent across the organization, and drive new value-generating business models.”
In most cases answering your question managers probably imagined their companies somehow improved with digital technologies and because of that the companies would perform much better. Why would companies do better with those technologies and why those changes are so difficult for most of developed companies? 

Unfortunately at this moment there is no clear understanding or definition of what a digital transformation would do for a company, what a target state for that transformation would be and even what the digital technologies are. 
Is it more or less broadly adopted SMAC concept (or computing platform or IT architecture?), another style/way of doing business or the McKenzie’s digital disruption concept? Why that transformation is so critical now? 

These concepts, stiles, ways and other examples describe changes in company efficiency not effectiveness as Peter Drucker defined them. The efficiency improvement goal is one of the key management goals and familiar for good management. Means, technologies and tools to improve efficiency are always innovative and before were not less complex than the current technologies. 

And still there is something different now which cause problems for most of incumbent companies. 
Why risk appetite is low, innovations are so difficult, people are not willing to change, org structure and management not agile, a digital strategy does not exist or is weak etc. in mature companies comparing to new challengers? The digital culture is a universal and a bit unclear answer which could mean anything and everything hence recommendations are a bit unpractical.

From my point of view the key questions are WHY changes are critical now? What is the main driver for those changes? 
The answers will allow provide recommendations for enterprise management how to change companies for new challenges, create a digital enterprise and will help to define strategy for the New Normal economic state.

My view is presented in the Digital Enterprise concept I published on LinkedIn. 
https://www.linkedin.com/pulse/digital-enterprise-dont-obliterate-optimise-automate-igor-ageyev?trk=prof-post

Any feedback is welcome.

Best regards
Igor