Any survey that suggests leadership is going backwards at such a crucial juncture for many businesses is extremely concerning. But according to research from Capgemini’s Digital Transformation Institute, organisations feel less equipped when it comes to leadership capabilities than they did six years ago. And this is despite considerable investment in digital transformation initiatives.
The consulting and technology services’ company’s in-house think-tank found that 35 per cent compared with 45 per cent in 2012 believe they have the right leadership capabilities while less than half feel they have the right digital capabilities to advance their transformations (39 per cent in both 2012 and 2018).
The research report, Understanding Digital Mastery Today: Why companies are struggling with their digital transformations, surveyed more than 1,300 business leaders in some 750 organisations and analysed the findings against a Capgemini Consulting and MIT Sloan 2012 report.
It found that while organisations are making progress on evolving their customer experience, they are struggling to transform their back-end operations. Furthermore, businesses are failing to create the strong digital culture needed to bring their employees into their digital transformation agendas.
Indeed, when it comes to digital capabilities, organisations have certainly prioritised customer experience with, for example, 43 per cent of organisations using mobile channels to sell products and services, compared to 23 per cent in 2012. Nearly 40 per cent are also improving their knowledge of markets and customers through devices embedded in products, compared to 17 per cent in 2012.
When it comes to operations, though, only 36 per cent of organisations reckoned it was an area they excelled in. Only 35 per cent are monitoring operations in real time (48 per cent in 2012) and only 29 per cent modify their operational processes to quickly adapt to external challenges (34 per cent in 2012). In addition, many organisations are not providing the tools and capabilities that their employees might expect. For example, only 38 per cent of organisations state their employees can collaborate digitally with other employees and one third of organisations agree that digital technologies improve communication between senior executives and employees (compared to 70 per cent and 62 per cent in 2012, respectively).
Perhaps one of the most worrying findings though is the disconnect that appears to exist between the chief information officer (CIO) and other members of the digital team. In 2012, two-thirds of organisations (65 per cent) felt that the CIO and senior business executives had a shared understanding of the role of IT in their organisation, but this has declined to 37 per cent in 2018.
Six years ago, more than half of respondents (53 per cent) agreed that the CIO and senior business executives have a common view of IT investment priorities, but that has also declined in 2018 to 36 per cent. The report concludes that such reductions suggest optimisation is still occurring in silos or that business leaders are impatient with the pace of IT and are spinning off shadow IT to lead their initiatives.
Having witnessed first-hand the silo mentality that still exists in many organisations, I am minded to agree with the research. There is little doubt that it also comes down to the prevailing culture in organisations which still isn’t as digital-friendly as it could be. The report found that only 36 per cent of companies said there are possibilities for everyone in the firm to take part in the conversation around digital initiatives – a decline from 49 per cent in 2012 – and just 38 per cent say they have a formal programme in place for digital reskilling of existing employees. Moreover, only 36 per cent of organisations believe senior executives and managers share a common vision for transformation.
It strikes me that the lack of progress is not so much to do with technology itself but rather good old-fashioned soft skills like communication, collaboration, engagement and building the right culture and environment for innovation to flourish. Could it be the case that today’s leaders are perhaps worrying too much about technology and forgetting the fundamentals? Time may tell, but time is also rapidly running out.