We explored the progress of European leadership teams and boards on digital insight and activities – and we found some trend breaking results!
Digoshen conducted a comparative analysis of the results from our research on the topic of “Digital Business and Leadership Capability” during January-May, 2016, with the results collected during June-October 2016 (1).
During the spring we partnered with EcoDa (The European Voice of Directors) and the Swedish Academy of Board Directors using the Digoshen survey with their members to explore the status of companies, boards and leadership teams regarding digital. With them and many more leaders and board directors taking the survey during summer and autumn, and we can share some exciting movement.
Research findings (1):
1. 46% of the boards have started to adjust their business strategy for digital business trends, growing fast from 33% earlier this year.
2. Companies are increasingly identifying more opportunities for innovation and digital business at all levels in the company (51 % in autumn compared to 38% in spring)
3. Companies are increasingly cannibalizing on existing revenue to generate new revenue streams from more competitive offers including digital components (46 % in autumn compared to 27% in spring)
4. Companies are increasingly looking to attract digital skills at all levels, even leaders (49% in autumn compared to 39% in spring)
The leading daily business paper in Sweden, Dagens Industri, featured the trend breaking results on November 15, 2016 – find a digital version of the lead article (in Swedish) “Företag jagar digitala affärer” (google translated into English “Corporates are hunting for digital business” ) (2).
Digoshen will continue to monitor the development to inspire board members and executives as they embrace digital opportunities moving forward. We invite you to learn more about your situation, read more about that further down (3).
Digital is becoming more important at board level.
Digital progress is resulting in an exponential impact on both society as well as companies, and media has increased its reporting on the challenge.
The Digoshen research is continuously collecting responses, allowing us to observe how the digital business capability and the digital leadership capability develop over time. We notice increasing interest from boards, not only to learn more about the trends but also to understand more of the digital business impact and proactively influence how they conduct strategy work.
46% of our respondents state that the board has now started to adjust the business strategy for digital business trends, growing fast from 33% earlier this year (1).
It is instrumental that organizations like the EcoDa (The European Voice of Directors), Swedish Academy of Board Directors, as well as executive business schools like INSEAD with their corporate governance initiative, continue to address this challenge to their participants to advance the knowledge level. Digoshen contributes with inspiration and supports companies and executives increasing the leadership insight and behavioral change for the digital era.
Traditional incumbent companies need to address the challenge and adjust their strategy and approach to the ongoing progress of digitization.
Many traditional companies became successful by following a fixed strategy over time, optimizing for efficiency and economies of scale. However, the aftermath of digitization brings new competitive advantages, where innovation, flexibility, and agility are significant components.
Company executive teams and boards need to monitor and understand the business impact of digitalization and adjust the strategy, so it provides purpose, differentiation and consists of the most important competitive advantages for the future. It is crucial to deselect initiatives and secure more resources for innovation and business experiments, also with new partners. To accomplish this, companies need to align their leadership efforts, resource distribution and organization accordingly. Company culture will almost inevitably need to change to support the transformation.
More insights into examples of actions companies and boards are taking can be found in Digoshen Research Reports (25)
New, rapid growing and agile start-up companies are often referred to as a challenge for traditional incumbent companies, but can rather hold the key to the future.
Agile startup companies, who have found new ways of generating value for their customers and other stakeholders, are more challenging now as even small, flexible companies may quickly build a strong brand and grow globally via digital opportunities.
We notice the increasing trend of collaboration between startups and traditional companies (4). Corporates are now making almost a quarter of the total investments in startups, and more and more companies collaborate with startups to initially help and eventually acquire them. (5) This has happened already within the media industry; now we see more and more banks, consumer goods companies as well as industrial companies start to do the same. (6)
Larger incumbent companies can also learn more of the flexible business development approach used by startups, challenging their current business model with new hypothesis visualized in Business Model Canvas (7) and expediting their learning using more iterative business development approaches as outlined in Lean Startup (8).
When we at Digoshen educate Chairmen of Boards for The Swedish Academy of Board Directors, we teach how it is possible to follow the startup world even from the board level. Startups have many times found opportunities for new, value-adding components, highly interesting and beneficial to understand also to the larger incumbent companies.
Cannibalizing one existing revenue stream might be needed to achieve long-term growth, but requires transparent communication with key stakeholders.
Business strategies in an increasingly digital world imply that you secure the right customer value and that perseverance comes from the combination of unique competencies and advantages.
If actors with advantages through an existing platform more rapidly can create increased customer value with more transparency, companies should more proactively assess whether to offer those customer values, even if this initially leads to lower revenue streams related to existing offers.
It remains the responsibility of the executive management team and the board to plan for the long-term increase in the value of the company. However, this requires solid communication to ensure understanding from key stakeholders like investors and media.
Recommended actions to boards and leadership teams to strategically address the digital transformation challenge.
The board is responsible for assessing and ensuring that the strategies, companies, and the leaders are adequately future-proof. As the digitization increasingly has an exponential impact on both society as well as companies, you need new insights and approaches to managing successfully.
- Innovate – Assess and clarify the company strategy and make sure to follow up on every board meeting. Be bold when prioritizing and deselect initiatives to ensure resources for new business opportunities. Re-assess the business strategy towards new digital business trends, an engaging purpose, and future competitiveness. Understand how today’s resources are distributed for the development of existing initiatives, and new opportunities: How do you want it to be? Is it possible to benefit from new business opportunities quicker, by collaborating and using other business models? Create a vision and strategy, which is perceived as clear and engaging. Find insight and inspiration via ref (9)(10)(11)(12)(13)(14)(15)(16)
- Align Action – Ensure to increase the flexibility and capability to innovate, and plan for new types of risks. Make sure that the organization becomes more agile and entrepreneurial, and run business development initiatives, in short, test and learning cycles. Revisit company culture and assess new collaborations, including startups. Follow up business experiments on the board level. Assess new types of digital risks, such as cyber risks as well as the risk to become obsolete. Re-assess the company risk register and risk management plans. Find insight and inspiration via ref (17)(18)(19)
- Sense – Increase the digital insight of the members of the board and the executive management team. This is required to secure the transformation and survival of the companies. Add and build skills on both board level and executive management level, and ensure behavioral change and continuous learning for existing members of the board and management team. Make sure more individual responsibility is taken for building own skills. Find insight and inspiration via ref (17)(18)(19)
1) Comparative analysis of the results of Digoshen research “Digital Business and Leadership Capability” during January-May, 2016, with results collected during June-October 2016.
3) Digoshen Survey “Digital Business and Leadership Capability” and Digoshen Research Reports
4) INSEAD Knowledge Blog: Corporate and Startups Engage or Else!
5) 500Startups & INSEAD Research: How do the worlds biggest startups Deal with the Startup Revolution
7) Strategyzer: Business Model Canvas
Innovate – Adjust strategy
9) McKinsey The economic essentials of digital strategy
10) Institute For the Future: The Automated World: Toward Human + Machine Symbiosis
11) Entreprenörskapsforum, Felländer, Teigland, Ingram Sharing Economy
13) BCG Acting on Digital Imperative
14) Integrative Innovation, Ohr A Model for Integrative Innovation management
15) Drucker Forum, Innovation360 Group Organizing for Simultaneous Innovation Capability
16) Boardroomresources How Digitally Savvy Directors Are impacting Corporate Strategy
Align Action – Ensure flexibility & speed
17) MIT Sloan Leaders must create context for success
18) Bain & Co Agile Innovation
19) Druckerforum, Denning The entrepreneurial organization at scale
21) MIT Digital Fostering a Digital Organization
Sense – Increase continuous insight
22) McKinsey Adapting your board to the digital age
23) INSEAD Evolving Leadership in the Digital Age
24) Digoshen Digoshen Insight Platform
25) Digoshen Digoshen Research Reports
About Digoshen and the Survey
The Digoshen Survey “Digital Business and Leadership Capability” is continuously ongoing and available in both English and Swedish here . Individual responses are confidential, and respondents automatically and directly get a feedback report including results for both the company as well as the responding leader’s digital matureness. The feedback report also includes some recommendations.
Digoshen research reports include insights, inspiration and examples from companies leveraging digital board members, innovation committees as sub-committees to boards, VC investments, startup collaborations and more business experiments.
If you like to keep updated on digital business matters, check out our Digoshen Insight Platform with inspiration, reports, and weekly digital magazines.
You can follow us on Twitter: @digoshen, our CEO @katycaroan and Chairman @liseeng or contact us at Digoshen
If you like to conduct a similar survey and comparison for your leadership team or board, business network, portfolio companies, geography or industry – contact us at Digoshen.
We would be excited to collaborate – read more about Digoshen advisory services and programs for leadership teams, boards, and insightful individual leaders.