Like most countries, Belgium saw a surge in digital adoption during COVID-19. Many of those digital behaviors have persisted even as COVID restrictions have eased. In the face of this change, Belgian companies are taking stock of their digital capabilities and assessing how well prepared they are for the future.
Digital Quotient methodology
McKinsey’s Digital Quotient® (DQ) measures an organization’s performance in 32 practices across five key dimensions of digital maturity: strategy, organization and talent, agile delivery and culture, capabilities, and adoption and scaling (exhibit). The responses are captured on a scale of 1–5 and then converted to 0–100 scores using a nonlinear scale. Average scores greater than 3.3 are considered strengths, average scores between 2.8 and 3.3 are considered areas for improvement, and average scores less than 2.8 are considered lagging areas.
To date, more than 750 companies have participated in DQ. Executives use the results to compare their performance against hundreds of organizations and digital leaders, identify their digital strengths and weaknesses across business units, and prioritize the initiatives of greatest potential impact. McKinsey led a comprehensive DQ study for the Belgian market, measuring the performance of 77 companies of various sizes across six industries. McKinsey Belgium is a partner in Fastfwd Belgium, an initiative to help Belgian companies on their path to digitalization.
Analysis of the Digital Quotient® (see sidebar, “Digital Quotient methodology”) of 77 Belgian companies reveals a country that is emerging somewhat ahead of the pack in terms of digital capabilities, but its lead is not significant, and there are some vulnerabilities.
Belgian companies are somewhat ahead in terms of digital maturity compared with their global and regional peers
When it comes to their digital maturity, Belgian companies are somewhat ahead of their European and global peers. Not only are Belgium’s digital leaders more mature than those in other countries, but the country’s average performers do better as well.
Having a strong digital profile is increasingly important, as it correlates closely with business performance. Previous research shows that the five-year revenue compound annual growth rate (CAGR) of digital leaders is more than triple that of their peers, while their five-year total returns to shareholders (TRS) CAGR is twice as great.1
But despite their lead compared with their peers across the world, Belgian companies cannot afford to rest on their laurels. With the pace of digital disruptions continuing to accelerate, their lead is not safe, and Belgian companies need to continue to invest in building their digital maturity.
Belgian companies’ digital maturity is particularly strong in strategy and technology
Belgian companies show a number of common strengths. When it comes to elements of digital strategy, DQ analysis shows that 65 percent of Belgian companies believe their leaders are willing to make big bets and aggressive strategic changes as first movers (or first followers). Furthermore, 55 percent of companies believe they have established successful ecosystems of external partnerships to bring in best-in-class skills and capabilities.
In the field of technology, security in particular stands out as an area of excellence. Some 65 percent of companies believe their data security, privacy, and compliance practices are enabling their digital and analytics agenda while also protecting the company against undesired risks.
Telecom, media, technology, and financial services lead Belgian sectors
Telecom, media, and technology (TMT), as well as financial services and the public and social sector, have significantly higher levels of digital maturity than other industries, though practices where they outperform vary. TMT companies show a strong appetite for risk and ample support for creativity and taking initiative in digital and analytics activities (71 percent versus just 51 percent for Belgian companies overall).
Financial-services companies exhibit an effective organizational structure and clearly defined roles for digital and analytics initiatives (67 percent versus just 33 percent for Belgian companies overall), while public and social sector organizations are strong in linking their digital and analytics strategy to the broader business strategy (67 percent versus just 47 percent for Belgian companies overall).
Belgian digital leaders outperform their in-country peers across all capabilities
In every single one of the DQ dimensions, digital leaders outperform average Belgian companies by significant margins. The differences in agile delivery and culture as well as adoption and scaling in particular stand out.
Belgian companies are behind in terms of talent strategy, at-scale adoption of analytics, and change management
Efforts to stay—or even leap—ahead of competitors require executive commitment, a clear road map to value, and effective capabilities. As Belgian companies assess where to focus their energies, they might consider a number of areas where they lag and can prioritize. Only 20 percent of Belgian companies, for example, believe they create superior insights from data to drive significant bottom-line impact. On the change-management front, the same percentage believe that their analytics-enabled insights have led their company to approach decision making differently. In common with many companies around the world, just 25 percent of Belgian companies believe they are able to effectively recruit and retain digital and analytics talent.
All sectors share a common set of opportunities for improvement, but other obstacles to digital maturity vary by sector
As with strengths, challenges vary by sector. Just 33 percent of TMT companies, for example, have a clear prioritization of domains for digital and analytics initiatives versus 39 percent for Belgian companies overall. In financial services, just 22 percent have a cloud-first mindset and are migrating to cloud-based storage and computing versus 53 percent for Belgian companies overall. For industrial companies, a paltry 14 percent offer a seamless customer experience across channels, while 42 percent of Belgian companies overall do.
Smaller companies are not far behind their larger peers
Larger companies (those with 250 employees or more) are ahead of smaller businesses (companies with fewer than 250 employees) across each of the dimensions, but not by much. In agile delivery, culture, and strategy, in particular, the gap is narrow, while in organization, talent, and data, the gap is greater.
Belgian companies have a solid foundation from which to compete in the digital age. The strengths of local digital leaders in TMT, financial services, and the public and social sector provide inspiring examples, and the benefits of more local knowledge exchange and collaboration across sectors is significant. To further increase the digital competitiveness of the Belgian economy, companies should consider coordinated action to strengthen analytics capabilities and address the digital talent gap.
