The future will belong to companies that put technology at the center of their outlook, capabilities, and leadership mandate. The imperative for a strategic approach to technology is universal, yet some companies are already leading the pack; their responses show that better overall technology capabilities, talent, leadership, and resources (what we call a company’s “technology endowment”) are linked to better economic outcomes. At the same time, the results confirm that many organizations could be missing opportunities to invest in the areas of their business models that are most at risk of digital disruption. The pandemic has dramatically increased the speed at which digital is fundamentally changing business. At the same time, the pandemic has created new vulnerabilities to—along with new opportunities from—future disruptions. We know from experience that customers, employees, and value-chain partners have all increased their use of technology, which has made the barriers to digital disruption even lower than before the crisis and paved the way for more rapid, technology-driven changes going forward. In our survey, respondents in every sector say their companies have significant vulnerabilities, especially to their profit structures, ability to bundle products, and operations. We also looked at the areas of their business where industries have been investing and, for the most part, those investments don’t align with the areas that are most prone to disruption (or that offer the highest returns). For example, many healthcare and pharma companies are investing in tailoring their offerings, enabling on-demand access to products and services, and improving overall customer experience. Yet, according to the survey, these businesses face greater risks of disruption in their value chains, the structure of their operating costs, and the types of products they offer.
To meet new demands, companies are making digital and technology investments across the business model
Consistent with last year’s findings that executives have started to take a more strategic view of technology, thinking of it as more than a mere cost driver, more than half of this year’s respondents say their companies are looking to technology as a way to strategically differentiate themselves from competitors. At-scale investments in technology are significantly more likely to support a successful transformation than those that are smaller in scope. To achieve their ambitions, it’s critical that organizations understand what it really means to differentiate from others on their technology—especially since “technology” and “digital” are such broad terms and mean different things at different organizations. So we asked respondents about specific elements of technology that, based on our experience and prior research, underpin successful digital transformations and make up a company’s technology endowment. The results suggest a clear link between the technology endowment and economic outperformance.
Tech-savvy leadership helped set top performers apart—and will be even more valuable in the future
Given technology’s growing importance to business success, it’s perhaps not surprising that top performers are nearly twice as likely to have technology leaders who actively shape overall strategy. They’re also more likely to give tech leaders a major role in innovation and product development. Despite the importance of involving technology leaders in business decisions, it isn’t sufficient for companies to have a single technology leader responsible for driving a top-performing and digitally enabled business strategy. We asked how boards of directors, C-suite leaders, and business-unit heads are engaging in technology. Respondents at the top economic performers are nearly 2.5 times likelier than bottom-decile companies to say seven or more of these roles are leading the technology-related thinking for their organizations. There are even bigger differences at organizations with a top-decile technology endowment: those respondents are more than seven times likelier than the bottom decile to report at least seven tech-savvy leaders.
