Research Report: Accelerating Digital Innovation Inside and Out

For the past five years, MIT Sloan Management Review and Deloitte have investigated digital maturity, focusing on the organizational aspects of digital disruption rather than the technological ones. The research has examined companies at the early, developing, and maturing stages of digital transformation and have seen increasing signs of separation between more and less mature organizations. This year’s research finds that the gaps can often be explained by a company’s approach to innovation: Digitally maturing companies are not only innovating more, they’re innovating differently.

MIT Sloan Management Review and Deloitte’s fifth annual study of digital business is based on a global survey of more than 4,800 managers, executives, and analysts and 14 interviews with executives and thought leaders. The report presents the following findings:

1. Digitally maturing companies innovate at far higher rates than their less mature counterparts. Eighty-one percent of respondents from these companies cite innovation as a strength of the organization, compared with only 10% from early-stage companies. Maturing organizations invest more in innovation and constantly drive toward digital improvement in ways that less mature companies do not.
2. Employees of digitally maturing organizations have more latitude to innovate in their jobs — regardless of what those jobs may be. Nearly five times as many survey respondents from maturing companies as from early-stage companies report that their organizations provide them sufficient resources to innovate.
3. Digitally maturing companies are far more likely than their less mature counterparts to collaborate with external partners. While 80% say their organizations cultivate partnerships with other organizations to facilitate digital innovation, only one-third of early-stage companies do the same. The nature of collaboration also differs depending on maturity level.
   
4. Cross-functional teams are another important source of digital innovation. Not only are digitally maturing companies more likely to use cross-functional teams, those teams generally function differently in more mature organizations than in less mature organizations.
5. Digitally maturing companies are more agile and innovative, but as a result they require greater governance. Organizations need policies that create sturdy guardrails around the increased autonomy their networking strength allows. Digitally maturing companies are more likely to have ethics policies in place to govern digital business.
6. When asked to predict whether their company will be stronger or weaker moving forward, respondents from digitally maturing and early-stage companies show striking differences. The former believe their organizations have the power to adapt to changes wrought by digital disruption and expand their capabilities, while the latter see disruption as a result of market forces they cannot control.
   

Click to learn more about the report.