My clients have an intuitive feel for the rhythm of their businesses. These seasoned executives know how often to make certain decisions, how hard to drive specific objectives, and how fast to react to changing circumstances.
Or at least they did. In recent years, digitization has accelerated the pace of competition in many industries, putting pressure on profits, changing who in the value chain is making money, and introducing rivals from outside traditional industry boundaries. The slow and inefficient—those whose information-gathering systems are too disconnected, direction-setting approaches too timid, and talent-management norms misaligned and incremental—are left behind, competing for scraps.
What hasn’t been clear so far is just how much and how fast incumbent companies need to adapt their business processes and activities. The exhortation to “change at the speed of digital” generates more anxiety than answers. So my colleagues and I recently completed some research to see if we could gauge the rhythm of this digital drumbeat. In earlier studies, we had identified 11 strategic and operational practices that are tightly linked to the successful execution of digital efforts. Then we asked more than 1,500 executives how frequently their companies carry out these 11 practices.
Our findings provide clear guidance: digital leaders tend to move four times faster, and with twice as much the power, as their peers. And their higher frequency of certain critical practices is closely associated with organizational cultures that are comfortable with change—companies that learn all the time and respond swiftly.
Digital leaders move four times faster, and with twice the power, as their peers
These practices fall into two categories. One is a set of actions that a company must take continuously (monthly, or even weekly) to increase the organization’s pulse. For example, nearly half of digital leaders collect and analyze customer data weekly or more frequently to identify new ways of winning over buyers, compared with just 16% of laggards, which, on average, dig into customer data only monthly.
The other category are activities done intermittently (often quarterly) that involve reviewing what the company is learning and making decisive adjustments. Our survey, for instance, found that digital leaders undertake big strategic initiatives more often—and more successfully—than their peers do. Two of the most important such initiatives are acquisitions and capital investments. Not only are these two of the five big moves shown by our colleagues in separate research to be the greatest contributors to exceptional corporate-performance improvement, they also proved to be powerful differentiators that separated digital leaders from laggards.
How do you speed up your company’s rhythm? You can’t do it by fiat. In this article, my colleagues and I lay out how some of the most successful companies have approached this challenge to become digital leaders. You can also read the full summary of our research findings there.
This article was originally published on LinkedIn.