Digital upends old models. They also create an adaptive design that allows the transformation strategy and resource allocation to adjust over time. 4 McKinsey says digital transformation needs to be holistic, not piecemeal. Clarity about ownership is critical, since responsibility often shifts among different groups as the digital transformation progresses, and the handoffs must be well-defined. (For more of McKinsey’s research on the success factors in broad business transformations, see “Why your next transformation should be ‘all in’” and “The numbers behind successful transformations.”) Our latest research shows that exceptionally effective digital transformations are distinguished mostly by the practices that executives choose to follow. Leveraging technology and changing an organization’s mindset, workflows, and systems to delight customers and compete in the digital-first era is harder than it seems. -, Commentary Jacques Bughin, Tanguy Catlin, Martin Hirt, and Paul Willmott, “, Companies making digital moves are those that are digital natives, industry incumbents competing in new and digital ways, or incumbents moving into new sectors. Successful digital and analytics transformations are likelier than others to employ more agile ways of working, such as encouraging risk taking, innovation, and collaboration across parts of the business, during a transformation. With successful digital transformations, respondents say their organizations keep efforts focused on a few digital themes—that is, the high-level objectives for the transformation, such as driving innovation, improving productivity, or reshaping an end-to-end customer journey—that are tied to business outcomes, rather than pursuing many different agendas (Exhibit 1). 1. Of course, organizations can rely on employees to be innovative, take appropriate risks, and work collaboratively only if they have the right digital talent. Please click "Accept" to help us improve its usefulness with additional cookies. The successful digital and analytics transformations are about 1.5 times more likely than others to be enterprise-wide in scale (Exhibit 2). Never miss an insight. For more on organizational agility, see Wouter Aghina, Aaron De Smet, and Kirsten Weerda, “Agility: It rhymes with stability,” McKinsey Quarterly, December 2015. These findings align with previous research on successful digital cultures, which found that being risk averse and too siloed often prevents incumbents from realizing business impact from their digital activities. We're speaking with Ari Libarikian who is a senior partner with McKinsey& Company. Explores why companies should go “all in” on transformations, looks at innovation and performance, and explains how talent is key to digital transformations. 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. Our flagship business publication has been defining and informing the senior-management agenda since 1964. For setting Interestingly, McKinsey says that by 2018 digital natives likely represented about 12 per cent of total revenue generated across sectors of developed countries. A larger share of success-group respondents than their peers strongly agree that their organizations are focused on attracting and developing highly talented individuals. Our latest McKinsey Global Survey on the topic confirms that the rate of success is alarmingly low. Use minimal essential Article Who owns the digital and analytics transformation is often a hotly contested question, since the initiatives that organizations pursue will affect how company resources are prioritized and might even change the entire direction of the organization. About eight in ten respondents say their organizations have begun digital transformations in recent years, but just 14 percent say their efforts have made and sustained performance improvements. These respondents are 3.7 times more likely than others to report a shared sense of accountability for meeting their transformations’ objectives. Flip the odds. To adjust for differences in response rates, the data are weighted by the contribution of each respondent’s nation to global GDP. What’s more, only 3 percent report complete success at sustaining their change. McKinsey research also suggests that the companies with a long-term view outperform their peers. We use cookies essential for this site to function well. Michael Krigsman: I'm excellent. our use of cookies, and Select topics and stay current with our latest insights, Five moves to make during a digital transformation. StumbleUpon. Digital Transformation: McKinsey’s Take. Respondents at successful organizations are more than twice as likely as their peers elsewhere to strongly agree that employees are rewarded for taking risks of an appropriate level and 2.6 times likelier to say their organizations reward employees for generating new ideas (Exhibit 4). The results from those efforts point to moves companies can make to keep their transformations on a path toward success: The survey content and analysis were developed by Jonathan Deakin, a partner in McKinsey’s London office; Laura LaBerge, a senior expert in the Stamford office; and Barbara O’Beirne, an associate partner in the Dublin office. Mehr als 1.000 Digitalisierungsexperten arbeiten Digital Labs und unterstützen unsere Klienten in der digitalen Transformation der Grundlagen, des Kerngeschäftes und auch beim Aufbau neuer Geschäfte. and the survey results show that this also holds true for digital transformations. hereLearn more about cookies, Opens in new Why construction is stuck in the analog era We drive transformation and build businesses by bringing together the capabilities needed to help organizations grow and thrive in the digital age. New research shows that five practices maximize the chance of extraordinary outcomes. McKinsey Quarterly. For starters, respondents who report the greatest levels of success in pursuing digital transformations say their organizations ruthlessly focus on a handful of digital themes tied to performance outcomes. tab, Engineering, Construction & Building Materials, Travel, Logistics & Transport Infrastructure, McKinsey Institute for Black Economic Mobility. Our flagship business publication has been defining and informing the senior-management agenda since 1964. Getting leaders to agree upon the best way forward can be challenging, but the survey results suggest a need for consensus. This video is based on the Social Media Revolution Series by Digital Transformation Speaker Erik Qualman. cookies. Five practices can help E&C companies move beyond isolated pilots and unlock digital’s value across their enterprises. Respondents at successful organizations are more than twice as likely as others to strongly agree that their allocation of talent to digital initiatives has been dynamic during their transformations. We see this adaptability ingrained in the design of successful transformations: respondents reporting success are almost three times more likely than others to say their efforts involve at least monthly adjustments to their strategic plans, based on business leaders’ input on the state of the transformation (Exhibit 3). The… Linkedin. Jacques Bughin, Tanguy Catlin, Martin Hirt, and Paul Willmott, “Why digital strategies fail,” McKinsey Quarterly, January 2018. Reinvent your business. Virginia Herbst Beraterin. Reinvent your business. People create and sustain change. 4. Our flagship business publication has been defining and informing the senior-management agenda since 1964. Top 10 percent contribution to digital revenue by sectors, % Source: McKinsey Digital Survey 2018, McKinsey Global Institute analysis 95 85 93 77 77 Professional services 60 Financial industry Media/telecom Retail High-tech services Automotive Anyone interested in the subject would be wise to listen to their advice. The fast pace at which digital drives change explains why so many companies are launching digital transformations and why the transformations themselves must be flexible. They also say their organizations have been clear about the financial effects of their initiatives; for example, they estimate impact based on the company’s current business momentum and models of near- and long-term scenarios. There also is greater clarity at successful organizations about who is responsible for which portion of the transformation, whether it’s the ownership of a specific initiative or a particular stage in the process. July 16, 2019. For example, leaders at these organizations are more likely to communicate their transformations’ progress regularly to the markets. A look at responses describing leadership roles shows significant differences between the success group and others in how certain roles lead the transformation’s strategy and its execution. Das McKinsey Digital Lab in Berlin sowie acht weitere Digital Labs weltweit sind spezialisierte Kompetenzzentren, die Strategieberatung mit Design-, Agile- und Technologieexpertise vereinen. Share. We define a successful transformation as one that, according to respondents, has been very or completely successful at both improving performance and equipping the organization to sustain improvements over time. (Explore the survey results in our data visualization, “An interactive look at digital transformations.”). In addition, they adopt agile execution practices and mind-sets by encouraging risk taking and collaboration across parts of the organization. A recent piece by McKinsey Global Institute (MGI) takes a look back at how life has changed since the “commercial internet” emerged. collaboration with select social media and trusted analytics partners Learn more about cookies, Opens in new But a look at the structure of digital and analytics transformations points to five key moves at particular stages of a transformation that set successful change efforts apart. For more, see “How digital reinventors are pulling away from the pack,” October 2017. Please try again later. Companies making digital moves are those that are digital natives, industry incumbents competing in new and digital ways, or incumbents moving into new sectors. Research by McKinsey & Company shows that only 16% of organizations believe their digital transformations have successfully improved performance and … What’s more, these respondents report that an average of 53 percent of employees have been trained in new digital and analytics capabilities since their transformations began—1.7 times greater than the share of employees reported at other organizations. Die Studie “State of Fashion 2019” von The Business of Fashion und McKinsey & Company: 20 börsennotierte Modeunternehmen dominieren mit der größten Wertschöpfung die Branche – 10 Trends – von grundlegenden Veränderungen im Verbraucherverhalten bis hin zu einer fundamentalen Transformation des Fashion-Systems – werden die Mode-Branche im Jahr 2019 prägen – China … a larger share of respondents reporting success say their organizations have reallocated their operating expenditures to fund the transformation. cookies, digital transformations are harder than more traditional ones, McKinsey_Website_Accessibility@mckinsey.com, How digital reinventors are pulling away from the pack, require monthly, if not weekly, adjustments, with previous research on successful digital cultures, A winning operating model for digital strategy. 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