George Westerman is a principal research scientist with the Initiative for the Digital Economy, located at the Massachusetts Institute of Technology Sloan School of Management. Westerman has outlined the challenges and achievements of the digital leaders in a book titled “Leading Digital: Turning Technology into Business Transformation,” published by Harvard Business Review. The book is co-written with Didier Bonnet, who is senior vice president at Capgemini Consulting, and Andrew McAfee, the co-director of the MIT Initiative on the Digital Economy.
Speaking on the MIT website, Westerman discusses his recent research into the digital economy. This centers on why some companies succeed with digital transformation programs and why some companies fail. With this regards, Wesrerman says: “We’ve identified a group of companies that we call ‘digital masters’ that are 26 percent more profitable than peers in their same industry.”
Using digital capability
As to what a Digital Master is, the book explains that these are “companies that use digital technologies to drive significantly higher levels of profit, productivity, and performance.”
In this context, successful companies – the digital masters – use more digital capability in their customer experience, operations, and business models, compared with those companies that are not successful. To be successful an engaging vision of how a company will be different is very necessary.
Time, tenacity and leadership
There are techniques for achieving this, but importantly this “doesn’t require that you hire away Google’s top talent or spend 20 percent of revenue on technology every year.” Instead what is needed is “some level of human capital and investment, of course, but the main requirements are time, tenacity, and leadership.”
Leadership is of great importance, Westerman adds in a feature with Laboratory Manager. The actual ‘masters’ (company heads) lead transformation better than their peers. However, this second key component of leadership capability, while it is seen as the most important, it is the most difficult to achieve in practice. Perhaps the biggest challenge that leaders face is with helping people understand why they need to change.
A mosaic pattern
Furthermore, the process through which digital transformation is achieved needs a strategy and a pattern, and one that is continually reviewed and reinvigorated: “knowledgeable companies can assemble the elements of technological progress into a mosaic not just once, but continuously over time.”
