In a digital world, are you ready for tomorrow?
Our world today is undeniably digital. New technologies—from social media and GPS systems to artificial intelligence and digital twins—have made the planet we live on almost unrecognizable compared to 20 years ago.
If you feel overwhelmed by the speed of change, hold on. It’s only going to accelerate. Disruptive technologies are arriving faster, and they are transforming how we live. Today, you don’t need to be a digital native to act like one. Middle-aged people are curating their social media profiles and tracking their exercise routines on Fitbit. Seniors are choosing tablets over newspapers and FaceTime over phone calls. More and more of us are spending more time online, with the average American now spending more time staring at a screen than sleeping.
The same technologies are driving new business models, where organizations use digital tools to create and monetize new forms of value. Increasingly, this value is delivered through cross-sector, outcome-based propositions rather than traditional sector-specific products and services. Organizations capable of providing customers with customized products and services will reap the rewards.
Startups and digital giants are navigating this world with ease and are ready to seize business opportunities. Their confidence, knowledge, and ambition are reshaping entire industries. In contrast, successful incumbents tend to tread cautiously.
Transformation for Tomorrow – Digital at Its Core
These organizations choose to “experiment on the edge,” aiming to use digital technologies to enhance customer experience or improve operational efficiency, rather than reshaping the entire value chain. Among these leaders, 68% feel more comfortable adopting digital technologies to boost their current business models rather than disrupting their existing one.
The truth is that taking a “digital on the edge” approach leaves money on the table. Follow this path, and you’ll miss significant opportunities to create and monetize value. To transform for tomorrow, you must look beyond experimentation and toward fully reinventing your organization.
As leaders look to transform for the future, our report identified three key areas of focus to unlock digital transformation opportunities:
1. Follow the Digital-First Blueprint
Digital mindsets are driving both digital giants and new market entrants as they aim to disrupt their current markets or create entirely new ones. Incumbents, who often seek to adapt cautiously, need to break free from the constraints of the past and act boldly to seize future opportunities.
To do this, they will need to look toward partnering with dominant technology players. For example, the automotive industry has collaborated with geofencing technology providers to accelerate the delivery of new cars to dealerships, making the process more precise and less risky. Sensors embedded in cars detect the exact moment when a vehicle transporter arrives at the dealership, and the software instantly transfers the asset from the manufacturer’s balance sheet to the dealer.
At the same time, incumbents must begin to imagine how they can disrupt their own organizations, learning from the digital-first mindset of leading companies. Any disruption should start from the customer’s perspective, reducing effort and friction at every touchpoint, using data to anticipate and respond to their needs.
2. Facing the Digital Talent Challenge
For digital transformation to succeed, it must be led by the C-suite and the board. However, our findings indicate that organizations are still focusing on core roles like programming, rather than equipping leadership teams and non-executive directors (NEDs) with the necessary digital skills.
With more than three-quarters of organizations (78%) acknowledging tensions between traditional operating models and new digital ways of working, leaders must take proactive steps to ensure their teams have the skills needed to drive the desired transformation.
Leaders will need to look beyond their own sectors to uncover different ways of thinking, upskilling their workforce along the way. Notably, our findings show that many NEDs are not aligned with other senior leaders. While NEDs are there to provide an external perspective in strategic decision-making, the noticeable difference in optimism levels around digital transformation suggests that we need to expand the talent pool in NED roles to refine the insights they bring.
3. Encouraging Experimentation
When faced with the choice between investing in what has worked so far and investing in what might work in the future, our report found that leaders typically choose the former. This safety-first approach stifles innovation and cultural change. Leaders told us they largely struggle to envision, plan, and launch new services or divisions as if they were standalone companies born on the internet. More than two-thirds (69%) said they don’t believe they’ve adapted their workforce and culture to the digital age.
To successfully transform for tomorrow, leaders must adopt a “think big, start small, scale fast” mindset. This approach allows them to quickly recognize what’s possible, encourage experimentation, and move from ideas to value at a fast pace. By doing so, they can empower people to innovate, enable multiple experiments to run simultaneously, and create a sense of momentum and excitement within the organization.
How Will You Get There?
We believe that every company must eventually transform for the future if it is to seize the opportunities offered by the digital world. Simply adding new features to old foundations is no longer enough—comprehensive transformation is essential.
While some organizations may survive for now by installing new features on outdated infrastructure, bolder players will take the lead by reinventing their digital core. They understand that future advantages will come from creating new value through digital technologies and digitally enabled business models, not from trying to protect current value in existing models.
Are you ready to transform for tomorrow?
