Are you still just transforming or are you transcending? PwC’s 2020 Global Digital IQ report assesses thousands of companies around the globe and how they navigate the digital transformation. The results are sobering: only 5 percent of companies – the Transcenders – are seeing returns on all aspects of digital. Here is how you can join their ranks.
For over a decade, PwC’s Digital IQ reports have summarised the findings in studies of thousands of digitally-transforming companies. This year, from our survey of 2,380 executives in 76 countries around the globe, we discovered a group of companies that consistently generate returns and get significant value on their digital investments in every area we assess – growth and profits, innovation, customer experience, people and retaining talent. And for the first time, we discovered not only who is a digital winner, but also which skills and tools are needed to make it to the top performing category: the Transcenders.
Only 5 percent of companies are doing all it takes in digital adoption to enter the payback period, and only 36 percent of companies oversee widespread adoption of new digital initiatives. What does it take to make your digital investments successful and profitable? We have identified four driving factors. Hint: Transcenders don’t fear change, they eat disruption for lunch.
The first step that the Transcenders have mastered is mandating change. They are aware that from top to bottom, changing how you work is key to win in the digital landscape. In order to avoid stagnation in an outdated business model, leaders must adapt fearlessly. Transcenders break office barriers, involving all employees from all business areas. They encourage collaboration and ideation – and they act on ideas generated in these processes (as opposed to simply collecting them). Having everybody on board early in this process also ensures that transformation is supported throughout the company.
The power of people in digital adaption
The second step to becoming a Transcender is preparing today for tomorrow. This means investing in what is happening next, not what is happening now. Build a flexible long-term roadmap, defining your vision for how technology can extend your company’s future success and outlining your priorities for investment. This holistic approach and initial infrastructure are key to getting a return on investment. Transcendent companies are more likely to have a similarly long view of transformation; 96 percent (versus 74% of others) have clear direction for digital. In addition, Transcenders invest 33 percent more than others in digital initiatives with a 17 percent higher profit margin growth to show for it.
The next step to reach Transcender status is empowering your people. People are your best asset, and if they aren’t at the center of your work, innovation will not happen. Invest in upskilling your workforce with a focus on developing skills instead of amassing knowledge. Give your employees the opportunity to use their new skills immediately and to learn from each other. If they have the skills to work more deftly, plus the mindset and tools to innovate, they can master any change and drive business. 89 percent of Transcenders say they don’t get pushback on new initiatives – and they are twice as likely to attract and retain talent than other companies. In order to help your employees improve their digital skills, we have developed the PwC Digital Fitness app – and we are making the app available to businesses and the Swiss population free of charge until the end of July 2020. It can help to further train skilled workers and anchor the necessary competence throughout the company.
Last but not least, digital winners build resilient cultures. A staggering 98 percent of Transcenders don’t fear extinction, despite the fact that two thirds of them have experienced a major disruption in the last two years. Transcenders equip their people with the skills to navigate and create opportunities in ongoing digital shifts. The ability to adapt and pro-actively tackle change, what we call BXT, is a prerequisite for thriving in the rapidly changing business world.
Time to look for returns
PwC’s 2020 Global Digital IQ research shines a spotlight on how to turn digital initiatives into functioning and profitable business models that boost performance and achieve returns on investment. Here is a summary of the four key steps to become a Transcender:
Four key steps
- Mandate change.
Mandate a leadership strategy focused on collaboration and cross-functional work. Digital should be your corporate strategy, not just a sideshow.
- Invest like you mean it.
Understand the technology, processes, operating models, and ways of working that you need to succeed in the future. Invest accordingly.
- Empower your people.
Tap into the creative brain power of all your employees. Upskill them and upgrade your training. Foster a mindset that revolves around employee experience.
- Build up resilience.
The new normal is constant change. Build a resilient culture and learn to regroup, readjust, and tackle change head-on.
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