For the past few years, managers of established businesses have observed the significant growth of technology companies such as Amazon, Facebook and Google. We’ve seen innovation and disruption as key organic growth drivers. But despite this awareness, and having significant resources, many industry leading organizations have missed new markets and growth opportunities that more agile companies have seized. For traditional companies, large and small, making the transition to thinking and acting digitally is critical, but easier said than done.
Efficient and effective organizational structures, vision, and cultures drive profitable growth. Recently, the way that new companies embrace digital culture - even those outside tech industries, offers valuable lessons. Organizations with a digital leadership culture are far more skillful at disrupting industries. They respond to change faster and focus more sharply on data and customers.
Companies must recognize that they cannot gain market and competitive advantage by relying on cash cows. They should adopt the collaborative strategies, agility and customer focus of the new and rapidly growing organizations. Digital technology catalyzes rapid changes such as cost structure, customer behavior, and revenue sources. No company can afford to sit still.
Learning From Google and Other Digital Leaders
A great example of digital leadership can be found from John Kaplan, VP of U.S. Sales and Operations as he explains how the company’s digital leadership culture is a major factor in their success.
It’s not just Google. The MIT Center for Digital Business and Capgemini conducted global research on 400 large companies and found that digital leaders outperform their peers in every industry. The Financial Services sector is a great example. Digital is revolutionizing the relationship between customers and retail banks and brokerages, who have responded with strong capabilities in customer service, analytics and even social media. Banks and investment advisory firms have an opportunity to parlay these successes into new innovations in mobile or social customer engagement and internal knowledge sharing. In addition, opportunities exist to integrate initiatives and processes across corporate silos.
Developing Digital Leaders
McKinsey & Company recommends that while executive leadership is important, the most critical thing is mid-level talent: the “boots on the ground” who can make or break digital initiatives and are ultimately responsible for bringing products and services to market.
McKinsey describes four keys to developing digital leaders:
- Leaders must think carefully about the strategy available to them and their team
- Success depends on the ability to invest in relevant digital capabilities that are well aligned with strategy—and to do so at scale
- While technical capabilities—such as big data analytics, digital content management, and search-engine optimization—are crucial, a strong and adaptive culture can help make up for a lack of these competencies
- Companies need to align their organizational structures, talent development, funding mechanisms, and key performance indicators (KPIs) with the digital strategy they’ve chosen
A strong commitment from a company’s executives and a sustained investment in people, capabilities, technology, and cultural change is helpful in creating digital leaders. To get started, an organization must be honest about its current “Digital Quotient” and be open to refining leadership development solutions along the way.