Download the full issue of McKinsey Quarterly 2015 Number 3 (PDF–3.3MB).
Here’s news for executives looking to reinvent their companies in the digital age—your peers think disruption will unseat four of ten industry leaders within five years, according to a recent survey by the Global Center for Digital Business Transformation.
Few should be surprised. On the road to digital maturity, established companies often seem stuck in first gear. The difficulties begin with strategy: unrealistic ambitions get in the way of more targeted strategic responses. Even when strategies hit the mark, companies often lack the capabilities needed to carry them out at scale. And fast, agile organizational cultures—the kind that compensate for other shortcomings—are still more aspiration than reality.
This issue of the Quarterly takes stock of the digital performance of today’s big corporations, noting that many of them suffer from a low Digital Quotient, or DQ—the firm’s overall metric for digital maturity. Those that continue to struggle must build organizations and cultures capable of realizing realistic and well-aligned digital strategies, argue Paul and his colleagues Tanguy Catlin and Jay Scanlan in “Raising your Digital Quotient.”
One way to make rapid progress in the digitizing world will be to harness the increased potential of artificial intelligence. In “An executive’s guide to machine learning,” Cristina and her colleague Dorian Pyle look to help top managers make a confident start toward the coming era of greater human–machine collaboration. In the fairly near future, self-motivating, self-contained (and often self-programming) machine-based agents will carry out set objectives autonomously, without any direct human supervision.
The greater participation of machines is only one factor that will increase the importance of trust in the digital world, according to Tucker Bailey, James M. Kaplan, and Chris Rezek. In their article, “Repelling the cyberattackers,” these authors assert that companies need to move beyond considering cybersecurity as a control function and adopt a more integrated, resilient approach. This will require top executives to engage more deeply with questions of cybersecurity than most are doing today.
Throughout it all, the rapid pace of digital transformation gives pride of place to innovation. Two articles in this issue focus on crucial aspects of the innovation process. “The simple rules of disciplined innovation,” by McKinsey alumnus Donald Sull, now at the Massachusetts Institute of Technology’s Sloan School of Management, helps executives embrace the apparent paradox that constraints on the innovation process help rather than hinder creativity. And in “Disrupting beliefs: A new approach to business-model innovation,” Marc de Jong and Menno van Dijk show that prevailing conventions about how to make money in an industry can be turned on their head.
Taken as a whole, we hope these articles will provide new impetus to executives as they continue their difficult journey toward digital reinvention.
Download the full issue of McKinsey Quarterly 2015 Number 3 (PDF–3.3MB).
