What differentiates digital leaders from the rest?

A comparative study of 'digital' implementations for organisations worldwide by Harvard Business Review shows that ability to initiate necessary organizational change is critical for success


Almost all the companies worldwide are spending time and money for digital technologies but only about one-third of companies could achieve significant positive business outcomes from their use of ‘digital’, as per the Harvard Business Review Analytic Services report.

What then differentiates the leaders of the ‘digital’ world from the strivers? Where does one lack and the other flourishes?

As per the report, all the companies, ones with positive outcomes and those without, face similar barriers while implementing new digital technologies, but it is the way the organizations react to these problems is what differentiates them. Inability to experiment quickly was the most faced challenge by the leading companies, organizational silos were more common for the under-achievers, whereas, legacy system troubled both type of companies equally. The study, however, found that successful digital transformation hinges much more on the ability to embrace necessary organizational change.


How a company reacts to the risk defines how high it would reach in the digital arena. Risk-averse culture is one of the basic differences between the leaders and the followers. As per the report, more than half (53%) of the companies that are digital strivers compared to less than a third (31%) of leaders.


Also, many companies strive for a focused vision for their digital strategy. The lack of vision troubled double the number of companies with unsatisfactory results as per the Harvard report. Many companies, use new technologies on a trial basis, limited their access to the digital. More than half, 54%, of IT leaders from US, admitted in the ‘Cloud Readiness Report’ that their teams struggle to form a cloud strategy. And US is leading the cloud readiness index at 5th rank. Thus, those who are leading are also not perfect but certainly are better in adapting to changes.


Alex Clemente, managing director, Harvard Business Review Analytic Services, said, “digital transformation is not challenging because it is about technology – but rather that it is challenging because it is about change." 

The Harvard study demonstrates that leaders clearly leverage the power of digital technology more effectively to receive broader business benefits because their technologies are driven by innovative strategies such as expanding markets, launching products, and creating new business models, as well as more operational cost cutting and asset utilization.

The underperforming companies were uncomfortable adopting new business models, which seemed to be a basic technique for the leader. Only a quarter of other companies embrace digital technology to create new business models, states the report. Also tried to increase the current base of customers more whereas, the focus of the upcoming ones remained in increasing and exploring newer markets. A majority of leading companies, as many as 77%, saw more opportunity to use digital to create new markets against only 30% of others sharing similar ideology, according to the report.

Nearly 80% of global leaders use digital technology to launch new products and services compared to only 39% of companies following same pattern worldwide, as per the report.

Establishing a systematic enterprise-level process aligns digital interventions to business outcomes was a lack for both the types of digital aspirants. However, leaders are four times more likely than strivers (40% versus 11%) to embrace such a company-wide approach.

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