Why people matter far more than digital technology or capital

Abstract

PurposeFifty-five per cent of executives at large corporations are extremely concerned about digital startups becoming significant competitors in their market. If the best technology these startups use is available to everyone and larger companies have the budgets to buy more, how can startups cause such a lack of sleep for leaders? Could the reason be the people, as startups generally are run and staffed by Millennials?Design/methodology/approachThe evidence for this comes via three separate research efforts and hundreds of hours of intense interviews with transformation leaders in commercial organizations such as USAA, Southwest Airlines, Citi, Hallmark, MIT and government agencies such as the GSA and the FCC. This research looked at how organizations were changing the way they think, organize, invest and act in pursuit of digital transformation success.FindingsSixteen per cent of larger organizations saw a real return on their digital transformation efforts. Successful digitally transforming organizations could cut OPEX three times more effectively than other organizations. Successful digitally transforming organizations (56 per cent of them) saw sales performance and customer satisfaction rise in unison. Forty-two per cent of these organizations revealed and solved new digital challenges that they had not recognized before; 87 per cent of these organizations saw enhanced growth in demand.Originality/valueTechnology is a huge part of digital transformation. IDC has predicted that in 2017, $1.7tn will be invested on digital transformation technology and processes alone. That is the size of the tenth largest economy in the world.