Accelerating Digital Innovation Inside and Out
Agile Teams, Ecosystems and Ethics
The fifth annual MIT Sloan and Deloitte study of digital business reveals digitally mature organizations don't just innovate more, they innovate differently—leveraging ecosystems and cross-functional teams that play critical roles. Download the Digital Maturity Study 2019.
Digital Maturity Study 2019
The MIT Sloan Management Review and Deloitte business study was conducted in the fall of 2018 and captured insights from individuals in 125 countries and 28 industries from organizations of various sizes. Digital maturity was measured by asking respondents to “imagine an ideal organization utilizing digital technologies and capabilities to improve processes, engage talent across the organization, and drive new value-generating business models.” Respondents then rated their company against that ideal on a scale of 1 to 10. Three maturity groups were observed: early (1-3), developing (4-6), and maturing (7-10).
Digital Maturity Study 2019
Download the study (PDF)
Key findings of the study:
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. Notably, innovation happens throughout digitally maturing enterprises; it isn’t caged in labs or R&D departments. Digitally maturing companies are more likely to participate in digital ecosystems, and their employees are often organized in cross-functional teams.
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. This year’s research also finds a strong relationship between a company’s rate of digital innovation and its staffers’ confidence that the organization will be stronger in the future, thanks to digital trends.
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. Digitally maturing organizations tend to form alliances that involve less formal, controlled relationships; they rely more on relational governance and less on detailed contracts. Formal partnerships can still serve a vital role in collaboration and often exist as part of larger business ecosystems.
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. They’re given greater autonomy, and their members are often evaluated as a unit. Participants on these teams are also more likely to say that their cross-functional work is supported by senior management. For more advanced companies, the organizing principle behind cross-functional teams is shifting from projects toward products.
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. Policies alone, however, are not sufficient. Only 35% of respondents across maturity levels say their company is talking enough about the social and ethical implications of 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.
Achieving Digital Maturity
Deloitte has a proven ability and track-record in supporting organizations in their journey towards digitally maturity by starting small and scaling fast. We acknowledge the fact that not all organizations are at the same level of digital maturity and therefore define tailored next steps based on the current state and future ambition of the organization. Still we see many organizations swirling in an endless loop of ‘doing digital’ siloed pockets of work and launching new digital projects – an illusion of ‘being digital’ – rather than making fundamental changes to their business model, operating model, or company DNA. As Deloitte we therefore developed a proven approach along five key areas of transformation (Digital Engagement Model, Digital Organization Design, Agile Way of Working, Digital DNA and Digital Technology Delivery) to run in an holistic agile Digital Transformation approach delivering Minimal Viable Transformations. Together with you, we can imagine, deliver, and run the future.