Does Your Team Think Digitally?

The difference between operating digitally - and being digital. A self-assessment tool. JL

Tanguy Catlin and colleagues report in Harvard Business Review:

Analyzing more than 200 companies around the world identified key digital strengths in four areas—strategy, culture, organization, and capabilities.

1. We all know it’s important to be “digital” in today’s marketplace—but what does that mean? Yes, it involves understanding technology, but it’s also about taking thoughtful risks with digital initiatives, whether you’re launching a new product or automating core processes. It’s about building relationships and testing ideas with customers through apps, personalization software, and social media, and using new tools to speed up the pace of work and decision making. It’s about learning and adapting.
   McKinsey has found that when teams and organizations do all that effectively, they’re rewarded with better financial performance. By analyzing more than 200 companies around the world, we have identified key digital strengths in four areas—strategy, culture, organization, and capabilities.
   Answer these questions to see how digitally savvy your team and organization are overall and to roughly gauge progress in each area.

2. How actively does your organization support risk-taking and experimentation on digital initiatives?

   I have tried a lot of new things and might be willing to try more, but each time, I have to overcome resistance in my organization to digital experimentation. There is no penalty for sticking with tried-and-true ways of doing things, so people tend to do that. I have ample support for creative risk-taking in digital activities.

3. Suppose that you’re automating customer service for certain types of requests, such as changing address, phone number, or bank information. Or say you’re launching a mobile app that helps people make better use of your products. How would you describe the pace of decision making and execution on key digital initiatives like these in your organization?

   It typically takes more than a year to move from idea to implementation. Time spent usually ranges from a few weeks to six months. Most of the initiatives are completed in six months to a year.

4. What is your team’s approach to building digital capabilities?

   We always develop them in-house. We actively seek and build partnerships to codevelop products and bring in new capabilities. We rely on external partnerships, but only for capabilities that cannot be developed in-house.

5. How do you think about digital initiatives you’re working on when it comes to building competitive advantage?

   My team keeps up with what competitors are doing digitally. They make work easier internally but aren’t essential for addressing changes in our industry. Our digital initiatives differentiate us from our competitors.

6. To what extent do you take customers’ needs and expectations into account when developing digital initiatives?

   I’m not sure my team has a sufficient understanding of what our customers need and expect when it comes to digital. We’re usually clear on how we’re meeting customers’ needs and expectations, but only across a few digital channels. We’re always clear on this—at all stages of the customer journey and across all relevant digital channels.

7. How much does your team benefit from automated processes such as data reporting and integration?

   We fully benefit from automated processes and are actively involved in shaping them. Not at all. Somewhat, but we could be finding more ways to digitize processes.

8. How systematically does your team use insights from collected data to improve decisions and performance?

   We regularly use insights from collected data to make better decisions and improve performance. We often use data to make decisions, but that doesn’t typically lead to significant performance improvements. We’ve tried, but we’ve found that the data is usually too complex to parse.

9. How would you characterize your organization’s awareness of technology and customer experience trends that are relevant to the business?

   People are keenly aware of digital trends related to the business and adjacent sectors, and we consider their impact on the company when making decisions. People are aware of most of them and try to factor them in when making work decisions. People aren’t as aware of them as they should be.

10. How well can you articulate how your team’s digital initiatives tie into the company’s overall strategy?

    It’s not even clear to me how the initiatives tie into the overall strategy. I understand how they tie in and I can articulate all the company’s goals and metrics. I see how they tie in generally, but I can’t articulate all the company’s goals and metrics.

11. Does your team have the resources and capabilities to produce, share, and update digital content (such as videos, quizzes, and games) to attract and engage customers?

    We have some resources and capabilities, but not enough to achieve the scale we need for real impact on the business. We have the resources and capabilities—and the scale—we need. We lack the resources and capabilities to do that effectively.

12. How does your team monitor the performance of digital initiatives?

    We track basic metrics, such as traffic and social sharing. We track a range of metrics and review them on a monthly or quarterly basis. We track a range of metrics and review them at least twice a month.

13. How would you characterize your team’s digital budget?

    We do not have the overall budget to make significant allocations to digital initiatives. We periodically allocate resources to digital initiatives as the need arises. We regularly allocate resources to digital initiatives and have a formal process for doing so.

14. How many members are on your working team?

    1–5 6–10 11–20 21–30 31–50 > 50

15. What is your industry?

    Accounting/financeArchitecture/engineeringBanking/financial servicesConsultingEducationFood serviceGovernmentHealth care delivery/medicineInsuranceLawManufacturingMedical devicesNot for profitPharmaceuticals/biotechnologyPublishingReal estateRetailSoftware/computer hardware/electronicsTransportationTravel/tourismWebWholesaleOther

16. What is your function?

    Owner/PartnerCEO/President/ChairmanOther C-level (CFO, COO, etc.)Executive Manager (EVP, SVP, GM, Managing Director, Administrator)Vice PresidentDirectorSenior Manager/Department HeadManager/SupervisorAdministrative AssistantConsultantEducatorStudentOther

17. What is your primary geography?

    ArgentinaAustraliaBotswanaBrazilCanadaChileChinaColombiaDenmarkEgyptUnited Arab EmiratesFinlandFranceGermanyGhanaIndiaIndonesiaItalyJapanKenyaKoreaKuwaitMexicoMoroccoNetherlandsNigeriaNorwayPakistanPeruPhilippinesPolandPortugalRomaniaRussiaSaudi ArabiaSingaporeSpainSwedenThailandTurkeyUnited KingdomUnited StatesVenezuelaZimbabweOther

18. What was your company’s approximate overall revenue last year?

    < $50M $51M–$500M $501M–$1B $1.1B–$2.5B $2.6B–$25B $25.1B–$50B > $50B Don’t know