Peter F. Drucker is considered the father ofmanagement and is one of the most studied authors in business schools. One of his many teachings in the form of a quote is that "the right structure will not guarantee results or performance. But the wrong structure is a guarantee of failure." This reflection is more than appropriate for the subject at hand today, which is none other than PwC United States' latest2020 Global Digital IQ study on the return on investment in Digital Transformation, and the figures of those who are successful in this field.
The consulting firm calls them "transcenders," meaning those who go beyond standard practices, and who are precisely the ones who are most successful. Those who know that transformation is a matter of structures, not technology. This largely explains the gap between expectations and reality when evaluating the "return" on these processes, since on average the former are much higher than the results. Instead of analyzing the causes of those who do not achieve their goals, the study notes what those who experience higher rates of return have done correctly.
The headline conclusion of this report makes it clear: only 5% of companies are doing everything they can to reap the rewards of digital. "To thrive, not just survive, you will need to navigate the maze of economic uncertainty and the dizzying pace of digital." That winning 5% are the "transcenders," defined as those who "don't dabble," but rather "dive in," and for whom their daily "bread and butter" is the economy of disruption: mergers and acquisitions, business model changes, or senior leadership changes.
The data was obtained from a macro survey of 2,380 executives in 76 countries, from companies with annual revenues ranging from $250 million to $50 billion. From their responses, PwC analysts have summarized in four guidelines the restructuring (i.e., finding that "better structure" Drucker proposed) needed to take full advantage of Digital Transformation: changing the command culture; serious investment; putting people first; and building resilience. Let's take a brief look at them in detail.
1. Change the command culture
Transcendent leaders "don't just talk big, they act," the study concludes. So much so that the vast majority of those at this level of success (84%) not only encourage but actually demand that goals be achieved through collaboration and cross-functional work. For them, the concept of "digital" is part of the corporate strategy, not a concept linked to additional efforts or specific lines within the company. Ideas are captured, worked on, and the business is driven forward, with digital in mind most of the time (on average, 96%), and innovation is encouraged: in 94% of cases, leadership does not stand in the way of innovation.
2. Invest "for real"
Digital transformation is NOT technology, but it must make use of technology, and the best technology possible at that. Transcendersinvest 33% more than other companies in technology, processes, operating models, and ways of working, precisely to achieve digital supremacy. In these cases, digital investments are aimed at growing the business, rather than reducing costs, as seems to be the mandate in companies that are not in the top 5%. That is why three-quarters of transcenders obtain significantly higher value from their investments in technology and new ways of working than other companies.
3. People first
They are clear about this. Transcendent companies claim to have more innovative professionals who are more active in running the business and more focused on the positive impact of their innovations. So they devote more resources to improving skills, new ways of recruiting professionals, and attracting talent. And, in addition, to retaining that talent, motivating when necessary, and continuously investing in training processes, as more than half (63%) of these digital leaders say.
4. Resilience: we live with uncertainty
Unlike their competitors,transcenders are not uncomfortable with change. In fact, their corporate DNA leads them to navigate change and "be prepared for anything." They know that digital transformation is a never-ending process, and so they learn from challenges, knowing that change is, in fact, the only constant. Parmenides wins over Heraclitus: two out of threetranscenders have experienced a major disruption in their business in the last two years, and the result has been that they have grown stronger.
Embracing digital transformation is a matter of willingness, not inevitable suffering. That is why Drucker's lessons are more relevant today than ever: because the necessary structure involves the entire business across the board, rather than just departments or highly specialized areas.
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