![]() ![]() The chief digital officer (CDO) is an essential member of the leadership ensemble: all successful companies have a CDO. It’s also evident that transforming into a digital company requires the addition of specialized leaders. ![]() Digital enablement tends to produce better results when a company puts emphasis on attracting and developing highly talented people and hires employees with strong digital and analytics capabilities. Investing in talent-especially at the top. ![]() The chance that a digital transformation will be exceptionally effective is also higher when executives determine which elements of the transformation involve “hard to reverse” choices that are critical to the company’s direction and agree on how to approach those elements. Survey respondents who said that their companies had defined their digital transformations in this way were 1.7 times more likely than others to report that the transformation’s results had surpassed expectations. In digital transformations, focusing on a few clear themes that are tied directly to measurable business outcomes is conducive to achieving better results. Applying the practices in all five groups maximizes the chance that a company’s digital transformation will exceed performance expectations-echoing research by our colleagues who recommend that your next transformation should be all in (Exhibit 2). Following just two groups of practices greatly reduces the likelihood that a transformation will miss expectations. Emerging from that analysis were five thematic groups of practices that particularly move the performance needle. With those complementary methods, we isolated transformation characteristics that are statistically significant in both explaining and predicting the likelihood of exceptional success. We also used regression analyses to home in on practices that had an unusually large effect on improving a digital transformation’s outcomes relative to expectations. We used multiple machine-learning classification techniques to identify “clusters” of digital-transformation practices that are closely associated with expectation-beating performance. To derive this conclusion, we analyzed our survey results in two ways. To adjust for differences in response rates, the data are weighted by the contribution of each respondent’s nation to global GDP. 1 The online survey was in the field from September 11 to September 21, 2018, and garnered responses from 1,733 participants representing the full range of regions, industries, company sizes, functional specialties, and tenures. The likelihood of surpassing profit expectations, on average, is just one in ten. In a new survey of more than 1,700 C-suite executives, we learned that the average digital transformation-an effort to enable existing business models by integrating advanced technologies-stands a 45 percent chance of delivering less profit than expected. Ascending to that elite group is far from easy. McKinsey research shows that the best-performing decile of digitized incumbents earns as much as 80 percent of the digital revenues generated in their industries. ![]() For established companies, the pressure to digitize business models and products has reached new intensity. ![]()
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