Despite the large amount of time, resources and funds being spent on digitalization, a large share of transformations do not realize their pre-defined targets. A new research from Capgemini Consulting shows that if companies want to maximize the probability that their digital transformations succeed, then they should make CxO level involvement their highest priority.
New technologies- like digitalization, social media, mobile and analytics- have over the past years grown from trend to strategic assets of organizations. In many cases their impact can be so large that they fulfill a pivotal role in a firms’ business model and competitive position. Despite increasing acknowledgements of the importance of digital transformation, companies still widely struggle with the transition to a digital business.
In the research report ‘Embracing Digital Technology: A New Strategic Imperative’ Capgemini Consulting asked more than 1.500 directors from 106 countries for the main reasons behind a failed digital transformation. Not surprisingly, the typical and well-known factors such as insufficient funds (33%) and a poor IT system (30%) score high in the list. Yet the consultants highlight that of the top 5 factors, two of them – including the most important dimension – can directly be related to the involvement of leadership.
The most mentioned organizational barrier causing digital transformation to fail is the lack of a so-called ‘burning platform’. In order to achieve this, the role of top executives is key. Only if leaders define a clear and shared vision and actively own and support the transformation, the end-result will be successful and sustainable, according to Capgemini Consulting. In addition, the ‘right’ leader(s) should play an ambassador role during the entire transition, from design to post-execution.
The advisory firm illustrates the impact of leadership involvement on employee attitude with a simple finding from the research: when directors share their vision on digitalization with their employees, then in 93% of the cases this also supported by them.
In addition, leadership support has a large indirect benefit: it makes the removal of other obstacles considerably easier. With leadership aligned and actively involved, other potential bottlenecks such as insufficient funds or unclear roles & responsibilities can be addressed more effectively – with as a result of smoother transformation program.
Over ‘Embracing Digital Technology: A New Strategic Imperative’
The investigation is part of a large global research project of Capgemini Consulting in the field of ‘digital transformation’ The most famous examples of this are two research papers published in cooperation with the MIT Center for Digital Business: ‘Digital Transformation: A roadmap for billion-dollar organizations’ (2011) and ‘The Digital Advantage’ (2012)*.
* The research report ‘Digital Transformation: A roadmap for billion-dollar organizations’ was mid-2012 announced as being one of the five leading thought leadership-studies in the past ten years, by Source.