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Survey Report

Chapter one: Digitally transformative organizations lead the way

2019 Pathways to Digital Enablement Survey Findings

Compensation Strategy and Design|Future of Work|Talent|Total Rewards
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July 12, 2019

Chapter one of the 2019 Pathways to Digital Enablement Survey Findings.

Transformative organizations are further ahead on both strategic and tactical fronts

Findings from the Pathways to Digital Enablement Survey reveal that organizations fall into one of four categories of digital maturity based on their approach to digital strategy and the key digital enablement levers (i.e., culture, leadership, digital strategy, human capital management, internal processes, structure and technology) (Figure 1).

  1. Emerging organizations have a very basic, reactive digital strategy (31% of respondents). These organizations may be pulling some of the digital enablement levers but without the benefit of a formal road map.
  2. Advancing organizations are in the early stages of developing a formal digital strategy (14% of respondents). They pull more levers, but their digitalization efforts remain fragmented and poorly aligned with their business strategy.
  3. Leading organizations are making substantial progress either by having a more fully developed digital strategy that is aligned or integrated with their business strategy or by being well along in implementing many of the levers (35% of respondents).
  4. Transformative organizations are further along on the journey than all the others as they have an aligned or fully integrated digital and business strategy powering new sources of value (20% of respondents). These organizations view digital as more than technology and pull all the levers on the path to digital enablement. Additionally, they tend to embed their digital capabilities throughout the organization’s value chain.
Pathway showing four categories of digital maturity: Emerging, Advancing, Leading and Transformative.
Figure 1: The pathway to digital success – four categories of digital maturity

Transformative organizations outperform

Twenty percent of respondents are transformative organizations. These organizations are further ahead of others in realizing their digital ambitions, and this is reflected in their financial performance (Figure 2). They are more than two and a half times as likely as emerging organizations to report being high performing relative to their peers.

The transformative category’s financial performance is substantially above its peer group at 31%. In other categories: All respondents are 19%, Emerging is 12%, Advancing is 17%, Leading is 19%.
Figure 2: Transformative organizations are more than 2.5 times as likely to be high performing than emerging organizations

Note: Percentages reflect the respondents that indicated their financial performance is substantially above that of their peer group.

Leadership in transformative organizations

Essential to transformative organizations, as well as all organizations, on this journey is leadership. Leaders must manage the levers that power the new digital ecosystem and are accountable for achieving their organizations’ digital ambitions. Seventy-five percent of transformative organizations report that they hold all their leaders accountable for the outcome of their digital efforts versus only 40% of organizations overall.

Transformative organizations are further along on the journey than all the others as they have an aligned or fully integrated digital and business strategy powering new sources of value.

In some organizations, the leadership team includes a chief digital officer (CDO). Transformative organizations are about three times as likely as emerging organizations to have a CDO who can be the focal point to architect and lead the change, engaging employees and contingent labor, and orchestrating the new work ecosystem.

How work gets done in transformative organizations

Transformative organizations recognize the value of, and utilize a plurality of means for, getting work done. This can involve the use of artificial intelligence (AI), robotics, alliances and outsourcers in addition to talent in more traditional employment relationships.

Contingent workers are an increasingly important component of the workforce. Today 25% of organizations say they are making more use of contingent talent due to automation and digitalization, and this figure is expected to more than double to 51% in the next three years. While many employers struggle to integrate contingent talent, transformative organizations have a clear advantage with almost three-fifths (57%) saying they are effective at integrating contingent talent with specialized skills into work teams versus only 23% of emerging organizations (Figure 3).

Fifty-seven percent of the transformative category indicate that their organization is highly effective at integrating contingent workers with specialized skills into existing work teams. In other categories: Emerging is 23%, Advancing is 40%, Leading is 44%.
Figure 3: Transformative organizations are more adept at integrating contingent workers with specialized skills

Note: Figure shows percentages of respondents that selected four or five on a five-point extent scale asking how adept they are at integrating contingent workers with specialized skills into their work teams.

In addition, over three-fifths (65%) of transformative organizations are actively planning to combine human talent and automation, well above the levels of organizations at earlier points in the journey.

Next chapter: Challenges of the digital transformation journey

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Lisa Relle