3. 1
ABOUT THE RESEARCH
The 2016 data show 16% of the survey partici-
pants in the Maturing stage, 52% in the Develop-
ing stage and 32% in Starting stage.
The framework has been tested and used inter-
nally by many organizations to define their digital
strategies and to make management aware of
the depth and breadth of what organizations are
becoming today.
The Foundational Framework and Scorecard are
discussed in detail in the Appendices, and are re-
ferred to at various points throughout the report.
The intention of this report is not to provide
scientific evidence but rather information and
guidance.
ā¶ā¶ Some findings presented here
make common sense, some are
counter-intuitive, others offer new
ways of thinking about decades-
old issues.
The overriding goal is to contribute to the ongo-
ing conversation about digital and organizational
transformation by bringing attention to data and
stories from organizations of different sizes, in
different sectors of activity, operating in different
regions around the world.
Research participants
There are approximately 300 participants each
year, with a return rate of 60%-70% over a three-
year span. This means the survey population
evolves but has a common core of annual par-
ticipants. This 10th survey involved 311 people
from 27 countries. The data were collected in the
second quarter of 2016.
This ongoing research, currently in its 10th
year, explores the organization in the digital age.
The āorganizationā is defined as people work-
ing together for a common purpose regardless
of institutional affiliation. They work towards a
particular mission, project or issue. Members can
be comprised of employees, freelancers, business
partners, suppliers, consultants and customers,
among others.
Over the past ten years, this research has
explored the internal digital work environment
in organizations. For the last two years the focus
has been on the organization in the digital age,
a subtle but significant shift where culture,
leadership and work practicesāinternally and
with customersāare critical dimensions.
Foundational Framework
The purpose of the Foundational Framework is
to provide a comprehensive view of the different
dimensions of the organization in the digital age.
The Framework is defined around three perspec-
tives: people, workplace and technology. The
nine dimensions offer a structured way of looking
at digital and organizational transformation. This
complex subject becomes more actionable by
looking at each dimension separately, as well as
how they interact with each other.
Maturity
Maturity is defined in three stages: Starting,
Developing and Maturing. Organizations partici-
pating in the research receive a Scorecard based
on the Foundational Framework showing their
maturity in each dimension. Scores are calculated
based on self-assessment by participants who
take part in annual surveys containing over 100
questions.
4. 2
About the Research ā ļ»æ
STARTING DEVELOPING MATURING
Awareness Mobiliza;on Trust
There is li@le awareness of the
poten;al role of digital for the
organiza;on.
Ad hoc and infrequent digital
ini;a;ves exist.
Senior leaders are minimally
involved. Most decisions are
made by tradi;onal hierarchy.
Work takes place primarily
between peers and known
colleagues.
Virtual work spaces for exis;ng
teams and func;onal
communi;es exist.
Individual people are
communica;ng and working to
build digital awareness.
A compelling vision for digital
transforma;on is deļ¬ned and
communicated.
Mul;ple ini;a;ves are being
aligned into a framework.
Senior managers are involved and
assume leadership for digital
ma@ers.
People and teams have some
autonomy and are enabled to take
ini;a;ves.
Self-organizing communi;es and
networks exist, including with
customers and external partners.
Most func;ons, levels and en;;es
in the organiza;on are involved in
digital ini;a;ves.
Digital is considered to be a
strategic asset for the
organiza;on.
Digital is embedded in work
prac;ces.
Leadership is open and
par;cipatory with much
decentralized decision-making.
There are many cross-
organiza;ons ļ¬ows of informa;on
and collabora;on.
Customers, partners and other
external people are connected in
the virtual organiza;on.
Strategic principles are based on
openness, trust and a work
culture of entrepreneurialism.
The Organiza,on in the Digital Age: Maturity Stages
5. 3
EXECUTIVE SUMMARY ā ļ»æ
investment priorities, technology was at the
top of the list and education and change at the
bottom.
Digital capabilities are deployed broadly today
as seen by the growth of information-sharing
technologies, enterprise social networks and
online communities. Work practices evolve as
digital maturity increases. Examples include self-
managing teams, decentralized decision-making
and working out loudāmaking ongoing project
work visible across the organization.
In organizations with entrepreneurial work
cultures there is a much higher degree of working
out loud, greater freedom to challenge practices
and business models, and the ability to shortcut
enterprise processes when necessary to advance
rapidly. Although innovation is important to most
organizations, relatively few have work cultures
that are conducive to entrepreneurial behavior.
The customer-facing workforceāat the edges
of the organization and far from the centerāis
often disconnected from corporate systems and
information flows. In the last two reports, and
again in 2016, fewer than half the organizations
said it was easy for their customer-facing
workforce to find the information they need,
provide rapid service, collaborate with their
customers and colleagues, and in general have a
smooth and efficient work experience.
The mobile-equipped workplace is becoming a
reality through provision of corporate devices
and policies allowing use of personal devices.
Even so, there are still insufficient mobile
applications and services available in most
organizations. It is therefore not surprising to see
a high reliance on email by workers in the field.
Competing priorities is at the top of the list of
challenges for many organizations when defining
their digital transformation strategies. One of the
goals of this report is to provide data, analysis
and case studies that will help organizations
prioritize and identify criteria for strategic
decision-making.
Many senior managers now understand and
support digital initiatives. The placement of
the highest-level person responsible for digital
matters is now the CEO or a direct report to the
CEO for nearly 60% of organizations (vs. 40% in
last yearās report).
However, fewer organizations state that their
senior managers demonstrate sustained
commitment and the conviction that digital
is essential to the way they work. A challenge
cited frequently in previous years was that
management needed to see quantifiable business
cases before investing in digital initiatives. This
obstacle still exists, but to a lower degree, as is
confirmed by the fact that lack of budgets and
resources has also decreased as an obstacle.
A starting point for digital transformation is
defining a compelling vision and strategy, and
ensuring that senior managers are visibly on
board. Some organizations have accomplished
this, but most strategies do not yet have sufficient
traction in business units and with frontline
people. The initiatives lack clear goals and
indicators. The role of digital within the strategic
vision of the organization has not been clearly
expressed in most organizations.
The research shows that primary goals of
transformation initiatives today are to increase
efficiency and improve existing business models
and processes. There is insufficient focus on
people and change. There is even less focus on
creating new business models. When asked about
EXECUTIVE SUMMARY
Digital transformation is part of a continuum of change for organizations as people, the workplace and
technology evolve.
7. The toughest challenge in digital
transformation is not to define a strategy, but
rather to make it tangible and actionable.
8. 5
KEY FINDINGS ā ļ»æ
ā¶ā¶ Improving today, not yet inventing
tomorrow.
Goals for transformation programs are primarily
focused on the following, listed top-down in pri-
ority. The first few focus on improving what exists
today. Creating new business models is nearly at
the bottom of the list, with only talent manage-
ment rated lower.
ā¢ā¢ Increase efficiency through automation, digi-
talization of internal processes.
ā¢ā¢ Improve existing business models and pro-
cesses.
ā¢ā¢ Improve customer experience and engage-
ment.
ā¢ā¢ Improve employee experience and engage-
ment.
ā¢ā¢ Accelerate/facilitate innovation.
ā¢ā¢ Build/strengthen our digital mindset and
culture.
ā¢ā¢ Improve decision-making.
ā¢ā¢ Implement fundamentally new business
models.
ā¢ā¢ Support talent management and recruitment.
ā¶ā¶ Much work remains to be done to
make visions actionable.
Although most organizations feel pressure from
external disruptions, few are making significant
investments to systematically explore the new
trends and to define their own strategies.
Half the organizations involved in the research
say the pace of their own digital transformation is
slow. Only 10% say it is fast.
20% say they are getting close to the vision of an
organization with open leadership, an engaged
workforce and close collaboration with custom-
ers.
The majority are defining digital transformation
strategies and taking steps to align existing, iso-
lated initiatives. Overall, transformation strate-
gies are primarily top-down, not yet grounded
in reality across the organization with. There is
insufficient buy-in and appropriation by opera-
tional and front line teams.
ā¶ā¶ Online activities with unpredicta-
ble outcomes such as crowdsourc-
ing and problem solving are less
common than activities such as in-
formation sharing and co-creating
documents.
Deployment of digital capabilities for people has
increased steadily over the past ten years. Sharing
information and working in online communities
are becoming common. However, creative and
open-ended capabilities such as crowdsourcing
and participating in problem solving are not yet
common to most organizations.
ā¶ā¶ Digital maturity engenders trust
across the organization.
Greater digital capabilities correlate with higher
autonomy of people and more collaborative work
practices. Trust across the organization also in-
creases with greater digital maturity, specifically
with people trusting other people in the organi-
zation they have not met. Trust in management,
both local and global, is also considerably higher
in digitally mature organizations.
Work cultures are defined by seven character-
istics in this research: decision-making, sense
of purpose, external awareness, teamwork,
information openness, entrepreneurial spirit
and risk-taking. The more digitally mature the
organization, the more likely there is distrib-
uted decision-making, a strong shared sense of
purpose, openness internally and externally and a
willingness for experimentation.
KEY FINDINGS
9. 6
KEY FINDINGS ā ļ»æ
ā¶ā¶ Autonomy, collaboration and
accountability are values in
entrepreneurial work cultures.
Entrepreneurial work cultures are rare and have
remained at approximately the same level for the
past three annual surveys. 20% of organizations
state they have an entrepreneurial culture where
people have freedom to experiment and take
initiatives.
A close look at a small group of 15 organizations
that say they have a āveryā entrepreneurial work
culture reveals differences in deployment of
digital capabilities, but primarily in work prac-
tices. They are far ahead of the others regarding
autonomy, collaboration, and responsibility and
accountability.
ā¶ā¶ Organizations enable individuals
and teams, but stop short when it
comes to sharing and mobilizing
across the whole enterprise.
For all organizations, work practices based on
cross-organizational sharing are less common
than those based on individual or team practices.
Four pairs of practices illustrate this phenom-
enon.
Pair 1: Responsibilities of individuals. Individ-
uals can set their own objectives, but these objec-
tives are not necessarily always visible across the
organization.
Pair 2: Transparency of business goals. Busi-
ness goals may be communicated broadly, but
people throughout the organization are not
widely encouraged to give input.
Pair 3: Team autonomy and visibility. Teams
can set their own goals, but it is rarer for them to
work out loud, sharing with the organization as a
whole.
Pair 4: Responsibility and accountability.
Teams often have business responsibility and
are accountable for producing actionable results,
but they are not allowed to shortcut enterprise
processes to get faster results.
The entrepreneurial group, while demonstrat-
ing these gaps as well, is much closer to reducing
them, showing that horizontal, cross-organiza-
tional sharing is a strong feature of entrepreneur-
ial work cultures.
ā¶ā¶ Data analysis focused on managing
people and talent is in very early
stages.
Data strategies for collecting and analyzing in-
formation about people are primarily focused on
understanding, managing and optimizing talent.
It is very early stages, with relatively few organi-
zations believing that their data are accurate, con-
sistent and timely. Even fewer are confident that
the right data get to the right decision-makers at
the right time.
ā¶ā¶ Paradoxically, as the eyes and
ears of the organization, the
customer-facing workforce is
often disconnected from corporate
systems and information flows.
The customer-facing workforce, located at the
edges of the organization often actually on cus-
tomer sites or on the road, are in direct contact
with the external world.
They often find it difficult to get the information
they need to do their jobs. Only 83 respondents
out of 311 said it was easy or very easy for their
customer-facing workforce to do their jobs. As a
group, these 83 differ from other organizations
in ways that indicate digital methods of working
have spread throughout their organizations.
ā¢ā¢ They have a higher degree of digital capabili-
ties, notably concerning video.
ā¢ā¢ Their people and teams are more autonomous
and tend to work out loud.
ā¢ā¢ They describe a greater openness both to the
external environment and within the organi-
zation itself.
ā¢ā¢ Their senior managers are more likely to un-
derstand and support digital initiatives.
ā¢ā¢ Decision-making about digital matters is
more distributed, and includes operational
managers.
10. 7
KEY FINDINGS ā ļ»æ
ā¶ā¶ Improving customer service is
the top goal for customer data
strategies, but few organizations
are approaching it systematically.
17 organizations stated that their customersā digi-
tal experience is better than that of their competi-
tors. These organizations are more likely to have
a coherent strategy. They have defined what data
is to be collected and who is responsible. They
possess skills on data interpretation and deliver
training on privacy and procedures. They are far
ahead of others in having a coherent, single view
of the customer.
ā¶ā¶ Lean is not yet a mindset.
Lean processes such as agile budgets and fail-
fast development are not yet common, and few
organizations work with incubators.
Intrapreneurshipāencouraging personal experi-
ments on company timeāis rare.
Few organizations have mechanisms making it
easy for small, innovative groups to make contact.
ā¶ā¶ The mobile workforce has a way to
go before being mobilized.
Fewer than half the organizations considered
themselves to be flexible when asked if they are
able to quickly assemble teams, draw on their
collective knowledge, find expertise inside and
outside the organization, communicate to the
workforce and collect information from people in
the field in real time.
The mobile workforce is one key to fluidity, ena-
bling people to work from anywhere, anytime on
any device. The number of organizations officially
allowing BYOD (bring-your-own-device), BYOPC
(your own computer) and BYOA (bring your own
app) has increased since last year, especially
BYOD. The non-official use of BYOD, BYOPC and
BYOA is increasing. The biggest discrepancy is in
BYOA where practice exceeds official sanction by
a factor of three.
In spite of an increase in the number of organiza-
tions allowing people to use their own devices for
work, implementation of mobile apps has been
practically at a standstill for 18 months, with lit-
tle difference between the data collected for this
report and last yearās report.
ā¶ā¶ Simplifying processes brings
fluidity.
Most organizations say their online processes
are complicated with only 11% describing them
as simple. This impacts cost and programs are in
place in over half the organizations to simplify
processes.
One process being simplified and socialized by
more organizations is the annual performance
review. Managers and employees establish and
share goals with each other and track progress
through a continual dialogue and feedback rather
than a single one-shot annual meeting. This prac-
tice increased from 24% to 30% since last yearās
report.
ā¶ā¶ Elastic workforcesāblending
temporary and permanent
workersā bring benefits as well as
challenges.
The research looked into the existence, benefits
and challenges of elastic workforces, combining
temporary workers and permanent staff. Having
on demand talent, access to rare skills on short
notice and a potential pool for later recruitment
are benefits to be balanced against the challenges
of lack of stability, lower loyalty and increased
needs for training.
ā¶ā¶ Learning in the flow of work is
getting easier.
Three years ago, 23% said learning in the flow
of work was easy. Today the research shows the
figure has reached 56%. These organizations
have active HR departments that use the digital
workplace extensively. Information systems are
more open than closed, and there is transpar-
ency throughout the organization for project
and career opportunities as well as for busi-
ness plans and goals. Retaining knowledge and
know-how when people leave an organization is
a challenge that organizations struggle to meet.
For the last three years, the proportion that are
11. 8
KEY FINDINGS ā ļ»æ
confident they can ārememberā what they know
has remained at under 15%. A closer look at this
group of 26 organizations shows a number of dif-
ferences, and in particular work practices such as
working out loud, and management practices that
are open and participatory.
ā¶ā¶ Responsibility for learning lies
primarily with people themselves,
rather than their manager or the
HR department.
Learning opportunities in just under half the or-
ganizations include how to work better in virtual
teams and participate effectively in enterprise
social networks. Opportunities for coaching and
mentoring are available for senior, middle, line
and operational managers, again in just under
half the organizations.
Approximately 30% say their primary approach
to learning is experiential where techniques such
as simulations, games, case studies, mentoring
and coaching are practiced rather than traditional
classroom training delivered by experts, which is
the case for 70%.
Maturing organizations offer more learning op-
portunities than do most organizations. These
opportunities may be internal or external. An
example: well over 50% encourage people to use
massive open online courses (MOOCs) whereas
the survey average is just over 25%.
ā¶ā¶ Knowledge organizations work out
loud and have open and participa-
tory leadership.
Retaining knowledge and know-how when
people leave an organization is a challenge that
organizations struggle to meet. For the last three
years, the proportion that are confident they
can ārememberā what they know has remained
at under 15%. A closer look at this group of 26
organizations shows a number of differences, and
in particular work practices such as working out
loud, and management practices that are open
and participatory.
ā¶ā¶ Senior managers are stepping
up to the challenges of digital
transformation.
33% of the organizations say their top-level man-
agers understand and support digital initiatives.
This was the case in only 18% of organizations in
the previous report. There is considerable pro-
gress to be made, however, because only 15% re-
port their managers show sustained commitment
and conviction that digital is essential to the way
we work (vs. an even lower 8% in the previous
year). The placement of the highest-level person
responsible for digital matters is now the CEO or
a direct report to the CEO for 58% of organiza-
tions (vs. 43% previously).
ā¶ā¶ Decision-making is spreading to all
functions and all levels.
Decision-making on digital strategy and imple-
mentation involves different levels of manage-
ment and different functions in the organization,
a sign that digital transformation is spreading and
no longer the semi-exclusive domain of IT. That
said, 40% say the organizational placement of
the highest-level person is in IT, 20% say Internal
Communications and another 20% in a dedicated
digital function.
Decision-making obstacles still persist after many
years. Examples: competing priorities, internal
politics, and slowness because of the need for
consensus. These are not eliminated, but drop
considerably in organizations where there is a
strong, shared sense of purpose.
ā¶ā¶ Technology is a top investment
priority, education and change are
low on the list.
Investment priorities are on technologies, above
all other areas, for all organizations. Education
and change initiatives are near the bottom of the
list for all organizations.
Factors that influence decision-making differ for
the three stages of maturity. Maturing organiza-
tions place building our foundational capabilities
as part of a long-term transformational strategy
12. 9
KEY FINDINGS ā ļ»æ
at the top of the list. Organizations at the Starting
stage top the list with cost-savings and increased
revenue.
People are beginning to realize that
organizational and digital transformation do not
usually have predictable, quantifiable results.
Strong challenges in the past regarding lack of
senior management support, the need to prove
ROI in a business case and lack of budget and
resources have all declined in 2016.
ā¶ā¶ As organizations advance in
digital maturity, some challenges
reappear that had been overcome
previously.
The closer an organization gets to real change,
the more resistance arises from different quar-
ters. Organizations at the Developing stage report
significant obstacles in the form of hesitation to
rethink ways of working and too much focus on
technology. Surprisingly, in the Maturing organi-
zations, the latter concernāpractically nonexist-
ent in last yearās researchāhas reappeared.
Basic concerns expressed by organizations at the
Starting stage are: lack of senior management
sponsorship, management fears about losing con-
trol, employees wasting time, lack of strategy and
lack of expertise and digital skills in our work-
force. These concerns fade as organizations gain
firsthand experience through initial successes in
their transformation initiatives.
ā¶ā¶ People and stories trigger change.
The primary change influencer is behavior: that
of senior leaders, peers and colleagues, line man-
agers and operational managers.
A compelling story, one that motivates and brings
immediacy to people, is at or near the top of
the list for most organizations. Internal success
stories are strong change factors, mainly for the
Maturing stage where successes abound, whereas
external benchmarking is considered a stronger
change agent at the Starting stage.
ā¶ā¶ Change activists or change agents
are a key factor for driving change
even in the most mature organiza-
tions.
Change activists, change agents, corporate rebels.
They go by different names, but all are people
inside organizations who work to trigger change
through actions that may not be within their
scope of work and that may not even be approved
by management. Their impact is rising: in 2016,
36% of the Maturing stage say change activists
are a key factor driving change, which is a much
higher proportion than last year.
ā¶ā¶ The vision is broad and deep, the
journey is long. Some organiza-
tions are getting close, most are on
the way.
We asked participants to indicate how close they
feel their organization is to this vision on a scale
of 1 to 10:
Imagine an organization where the workforce is
engaged, leadership is open and participatory, and
the work culture is based on trust and purpose.
Digital transformation has both streamlined and
enriched work practices; employees and customers
collaborate and innovate; and the organization
operates in an entrepreneurial modeāencourag-
ing initiatives and accountability throughout.
Only 4% responded very close, 17% close, most
were split between on the way at 39% and far at
32%, with 8% stating very far.
14. 97
RESEARCH SUPPORTER: MODUS
Research Supporter
It is not the strongest or the most
intelligent who will survive but those who
can best manage change.
āCharles Darwin
Specialists in
Intranet Strategy | Design | Development | Continuous Improvement
Visit us at modusagency.com
For over two decades, Modus has helped
global brands and visionary startups
harness the power of digital innovation.
Now, as a sponsor of Jane McConellās 10th edition of
Organization in the Digital Age, weāre proud to be part of another
milestone in the ongoing evolution of the digital organization.
Building powerful organizational technologies, pushing the
envelope with innovative design, and shaping digital strategies
for the 21st century, Modus is helping businesses create a
more connected world.
We look forward to joining your conversation on digital change.
The Modus Team
16. 109
APPENDICES ā About the Author
About the Author
Strategic Advisor
Jane McConnell, dual US and French citizen,
is based in Provence, France. She has advised
organizations in Europe and North America on
their internal digital strategies for 18 years. She
has conducted more than 120 intranet and digital
workplace projects for over 60 global organiza-
tions.
Researcher
Jane has been at the forefront of digital inside
organizations for years, and was one of the first
thought leaders to give meaning to the term digi-
tal workplace in 2010. She is well known for her
research and annual reports on the organization
in the digital age. This is the 10th edition of the
report.
Facilitator for Self-Assessment and
Strategy
An effective digital workplace strategy emerges
from the organization itself. It is not something
an external consultant can provide. Janeās Foun-
dational Framework, based on people, workplace
and technology, serves as a reference, self-
assessment and diagnostics tool for many global
organizations.
Management Briefings
Jane gives talks and runs workshops for senior
managers. These briefings, supported by data and
examples, enable management teams to grasp the
issues and understand what leadership means in
the digital age.
Custom-designed, creative activities help manage-
ment define their own digital vision and build
action plans that correspond to their current
degree of digital maturity and their ambitions.
Contact
ā¢ā¢ Email: jane@netjmc.com
ā¢ā¢ Twitter: @netjmc
ā¢ā¢ Calling or texting +33 (0)612036634
More information can be found on
ā¢ā¢ www.netjmc.com
ā¢ā¢ www.organization-digital-age.com
ā¢ā¢ www.linkedin.com/in/netjmc