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Coming of Age Digitally: MIT Sloan Management Review Deloitte Digital 2018 Global Study

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Based on the global survey of more than 4,300 managers and executives and 17 interviews with executives and thought leaders, MIT Sloan Management Review and Deloitte’s fourth annual study of digital business shows that today’s digital business environment is fundamentally different from the traditional business ecosystem. Digitally maturing companies recognize those differences and are evolving how they learn and lead in order to adapt and succeed in a rapidly changing market. The approach followed by digitally maturing organizations could offer valuable lessons for companies that want to improve their own digital effort:

1. Developing, not just having, digital leaders often sets digitally maturing companies apart.
2. Digitally maturing companies tend to push decision-making further down into organization.
3. Digitally maturing companies are more likely to organize in cross-functional teams with the autonomy needed to accomplish their mission.
4. Digitally maturing organizations are also more likely to experiment and iterate.

As many organizations are struggling to figure out how to be more competitive in the current environment where digital maturity is on the rise, legacy companies in particular could face unique challenges as what drove legacy company success in the past may not drive it in the future.

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Coming of Age Digitally: MIT Sloan Management Review Deloitte Digital 2018 Global Study

  1. 1. Copyright © 2017 Deloitte Development LLC. All rights reserved. 12018 MIT Sloan Management Review and Deloitte Digital global research study Preliminary research, please do not forward Coming of Age Digitally MIT Sloan Management Review Deloitte 2018 Global Study
  2. 2. Copyright © 2018 Deloitte Development LLC. All rights reserved. 22018 MIT Sloan Management Review and Deloitte Digital global research study Shiftingthelenson digital maturity Digitally maturing companies adapting their strategy, culture and talent to a digital environment are also changing how they learn and how they lead 1. As top-down hierarchical corporate mandates give way to distributed decision- making, new ways of learning and leading are often required Role of Learning and Leadership in the Digitally Maturing Organization 3. Legacy or older, established companies, often limited by incremental aspirations and relying on previous success, can accelerate their digital transformation by adopting new learning and leadership models. 2. These evolving models can impact not only the institution, but individuals as well: - Individual employees should be capable of making decisions in a fast-paced environment - Corporate leaders should learn how to lead by influence rather than dictate L E A R N I N G T A L E N TS T R A T E G Y C U L T U R E L E A D E R S H I P
  3. 3. Copyright © 2018 Deloitte Development LLC. All rights reserved. 32018 MIT Sloan Management Review and Deloitte Digital global research study Seventh Annual Research Report,2018 Undertaken by Deloitte Digital in collaboration with MIT Sloan Management Review (MIT SMR) S U R V E Y B Y T H E N U M B E R S : E X E C UT I V E I N T E R V I E W S C-suite and other executives, subject matter specialists 17 Survey in Fall 2017 of business executives, managers, and analysts from organizations globally to understand how the digital enterprise is evolving
  4. 4. Copyright © 2018 Deloitte Development LLC. All rights reserved. 42018 MIT Sloan Management Review and Deloitte Digital global research studyCopyright © 2018 Deloitte Development LLC. All rights reserved. 42018 MIT Sloan Management Review and Deloitte Digital global research study Play State C U R R E N T O F
  5. 5. Copyright © 2018 Deloitte Development LLC. All rights reserved. 52018 MIT Sloan Management Review and Deloitte Digital global research study 1. Respondents were asked to “Imagine an ideal organization utilizing digital technologies and capabilities to improve processes, engage talent across the organization, and drive new and value- generating business models. How close is your organization to that ideal?” (Answers on a 10 point scale where 10 is most mature) Numbers do not total 100 percent due to rounding. 2. 2017 data sourced from, “Achieving Digital Maturity,” MIT Sloan Management Review and Deloitte University Press, July 2017. Companiesappear to be coming ofage in a digital environment Digital maturity is growing according to survey respondents Current digital maturity % all 2018 study survey respondents1 Early 25% Developing 44% Maturing 30% Change from 2017-18 -9% +3% +5% 1 2 3 4 5 6 7 8 9 10 3% 8% 14% 13% 14% 17% 15% 8% 4% 3%
  6. 6. Copyright © 2018 Deloitte Development LLC. All rights reserved. 62018 MIT Sloan Management Review and Deloitte Digital global research study % RespondentsBiggest challenge impacting company’s ability to compete in a digital environment 20% 13% 12% 10% 9% 8% 8% 5% 4% 4% 7% 0% 5% 10% 15% 20% 25% Experimentation (getting people to take risks) Ambiguity and constant change Buying the right technology Distributed decision-making Transparency, democratization of information Fluidity in organizational structures Multigenerational workforce issues Transient, rapidly changing team structures Workforce augmentation Segmentation of customer bases Other / don't know …butorganizational challengespersist Organizations are struggling to get their employees to take risks Results are consistent across all maturity levels
  7. 7. Copyright © 2018 Deloitte Development LLC. All rights reserved. 72018 MIT Sloan Management Review and Deloitte Digital global research study % RespondentsWhat is the main difference between working in a digital environment vs a traditional one? …and thebusinessenvironmentisvery different Doing business in a digital environment is fundamentally different than in the past 20th-century era. Pace, organizational structure and culture are all significantly different. 1% 10% 13% 16% 18% 19% 23% 0% 5% 10% 15% 20% 25% Other / no difference Greater connectivity Improved access to, use of tools Improved productivity Flexible, distributed workplace Culture and mindset Pace of business Respondents were free to enter whatever they wished. More than 3,300 responses were coded and categorized. Open Text Question
  8. 8. Copyright © 2018 Deloitte Development LLC. All rights reserved. 82018 MIT Sloan Management Review and Deloitte Digital global research studyCopyright © 2018 Deloitte Development LLC. All rights reserved. 82018 MIT Sloan Management Review and Deloitte Digital global research study Organizations and individuals must evolve how they learn in a digital environment Learning:
  9. 9. Copyright © 2018 Deloitte Development LLC. All rights reserved. 92018 MIT Sloan Management Review and Deloitte Digital global research study Individuals areevolvinghowtheylearn Companies are increasingly pushing decision-making down into the organization as they digitally mature, necessitating new skills and new ways of learning for employees Early Developing Maturing 24% 18% 23% 32% 32% 43% 50% 52% 63% 67% 1 2 3 4 5 6 7 8 9 10 Digital Maturity My organization is increasingly pushing decision- making authority down in the organization. % Respondents who agree or strongly agree
  10. 10. Copyright © 2018 Deloitte Development LLC. All rights reserved. 102018 MIT Sloan Management Review and Deloitte Digital global research study How often do you need to update your skills to work effectively in a digital environment? Individuals areevolvinghowtheylearn 73% Continuously: At least every six months: 44%
  11. 11. Copyright © 2018 Deloitte Development LLC. All rights reserved. 112018 MIT Sloan Management Review and Deloitte Digital global research study On-the-job training may be more important than traditional training programs. Most important opportunity your company provides you to develop in a digital environment (Top 3 responses for digitally maturing companies) Individuals areevolvinghowtheylearn 27% 26% 16% On-the-job learning Training programs Supportive work environments
  12. 12. Copyright © 2018 Deloitte Development LLC. All rights reserved. 122018 MIT Sloan Management Review and Deloitte Digital global research study 0% 20% 40% 60% 80% 100% 1 2 3 4 5 6 7 8 9 10 Experimental My organization encourages new ideas to be shared and tested at all levels of the organizations Supportive My organization encourages feedback and iteration to learn how to work in new ways Transparent Leaders in my organization share results from failed experiments in constructive ways that increase organizational learning % Respondents who agree or strongly agree Digital Maturity Digitally maturing companies create an environment for learning Organizationsarealso rethinkinglearning Companies can’t simply decide to be more experimental, they should also provide the necessary supportive and transparent environment in which employees and the organization overall can learn Early Developing Maturing
  13. 13. Copyright © 2018 Deloitte Development LLC. All rights reserved. 132018 MIT Sloan Management Review and Deloitte Digital global research studyCopyright © 2018 Deloitte Development LLC. All rights reserved. 132018 MIT Sloan Management Review and Deloitte Digital global research study All levels of the organization are called to lead in a digital environment Leadership:
  14. 14. Copyright © 2018 Deloitte Development LLC. All rights reserved. 142018 MIT Sloan Management Review and Deloitte Digital global research study 26% 30% 44% 19% 22% 59% 19% 20% 61% 0% 10% 20% 30% 40% 50% 60% 70% Describe the orientation of your management, leaders, and employees toward change within the organization Mostly facilitate change or facilitate more than inhibit Mostly inhibit change or inhibit more than facilitate % Respondents Inhibit or facilitate change about equally Leadershipneedsto be pervasive Hierarchical command and control structures are no longer useful for companies to be sufficiently agile. Yet, not all employees may be ready to embrace a leadership role. EmployeesLeadersManagement
  15. 15. Copyright © 2018 Deloitte Development LLC. All rights reserved. 152018 MIT Sloan Management Review and Deloitte Digital global research study 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 1 2 3 4 5 6 7 8 9 10 % Respondents My organization is effectively developing leaders who have the capabilities necessary to lead the organization in a digital environment. (Strongly agree / agree) My organization needs to find new leaders for the organization to succeed in the digital age. (Strongly agree / agree) Even maturing companies need new leaders Digital Maturity Executive leadershipshould evolve aswell The majority of companies surveyed note a need for new leadership in a digital environment. Only the maturing companies though appear to be doing something to address the need. Leadership Gap Early Developing Maturing
  16. 16. Copyright © 2018 Deloitte Development LLC. All rights reserved. 162018 MIT Sloan Management Review and Deloitte Digital global research study ..creatingconditionstoenablesuccess Survey results suggest leaders need to set the stage for their employees to excel, creating the conditions that will foster agility, collaboration and innovation What would you like your leaders to have more of to navigate digital trends? (Top 3 responses) composite score Direction: Providing vision and purpose Innovation: Creating the conditions for people to experiment Execution: Empowering people to think differently What is the biggest difference between working in a digital business environment vs. a traditional one? (Top 3 responses) Increased pace of business 23% Culture, mindset and values 19% Flexible, distributed workplace structure 18% #1 #2 #3
  17. 17. Copyright © 2018 Deloitte Development LLC. All rights reserved. 172018 MIT Sloan Management Review and Deloitte Digital global research studyCopyright © 2018 Deloitte Development LLC. All rights reserved. 172018 MIT Sloan Management Review and Deloitte Digital global research study Transforming Organization:‘Coming of age’ in a digital world likely requires new ways of learning and leading T H E L E G A C Y
  18. 18. Copyright © 2018 Deloitte Development LLC. All rights reserved. 182018 MIT Sloan Management Review and Deloitte Digital global research study 19% 26% 23% 29% 25% 40% 44% 46% 47% 45% 41% 30% 31% 24% 30% 0% 20% 40% 60% 80% 100% Digital Maturity by Company Age % Respondents Company Age Only 32% are pushing decision- making down into the org Only 36%of employees facilitate or mostly facilitate change Only 29% are developing their leaders for a digital environment Companies >50 years Early Developing Maturing Legacy organizationsface unique challenges Competencies of the past create traps that stymie new value creation and hinder digital maturity <10 years >50 years10-25 years 26-50 years Average
  19. 19. Copyright © 2018 Deloitte Development LLC. All rights reserved. 192018 MIT Sloan Management Review and Deloitte Digital global research studyCopyright © 2018 Deloitte Development LLC. All rights reserved. 192018 MIT Sloan Management Review and Deloitte Digital global research study Takeaways C O N C L U D I N G
  20. 20. Copyright © 2018 Deloitte Development LLC. All rights reserved. 202018 MIT Sloan Management Review and Deloitte Digital global research study Learning Leadership Organization Organizations can learn more by developing new knowledge through practice and experimentation Organizations improve leadership through influence and transparency Individual On the job learning enables continuous individual learning Individual leadership needs to be pervasive across the organization Beginning Principles to Consider • Commit to developing leaders and employees for digital. • Create pockets of fresh thinking and innovation. • Experiment and encourage new ways of learning. • Leverage learnings from success and failures. Opportunitiesexist to better learn and lead Legacy companies that recognize the need to adopt new learning and leadership models can be better positioned to succeed in a digital environment
  21. 21. Copyright © 2018 Deloitte Development LLC. All rights reserved. 212018 MIT Sloan Management Review and Deloitte Digital global research study Read the full report here: www2.deloitte.com/insights/coming-of-age-digitally Join the conversation: #DigitalEvolution @DeloitteInsight @DeloitteDigital @MITSMR Want to learn more?
  22. 22. This publication contains general information only, and none of the member firms of Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collective, the “Deloitte Network”) is, by means of this publication, rendering professional advice or services. Before making any decision or taking any action that may affect your business, you should consult a qualified professional adviser. No entity in the Deloitte Network shall be responsible for any loss whatsoever sustained by any person who relies on this publication. As used in this document, “Deloitte” means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte USA LLP, Deloitte LLP and their respective subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting. Copyright © 2018 Deloitte Development LLC. All rights reserved. Member of Deloitte Touche Tohmatsu Limited Thank you. Global Study and study data ©Massachusetts Institute of Technology.

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