According to a new study from Bain & Company, even companies that are considered “digital disruptors” are having to adapt to emerging technologies that are creating new business models and new competitors, effectively disrupting the disruptors.
The firm’s fifth annual Benchmarking Survey of Corporate Digital Transformation surveyed 1,400 business leaders spread across 13 countries, and found that 70% of respondents were experiencing digital disruption, with 85% of business leaders expressing a belief that disruption will either maintain its pace, or even accelerate over the next five years. The research highlighted three ways disrupters stand out and detailed six digital transformation challenges that are likely to make or break companies’ efforts to stay ahead of the curve.
According to Bain’s research, disruptors have embraced the belief that we are living in the midst of a profound shift in the way business is conducted. Firms identified as disruptors are eight times more likely than latecomers to attract and retain the right people, with the right skills, in the right roles. Nearly two-thirds of disruptors are building digital businesses outside their core as a response to both disruption and opportunity. Most disruptors also view ESG as intertwined with their business efforts, with roughly 60% considering ESG a primary criterion in how they evaluate and prioritize digital initiatives.
Bain’s research identified six key areas for companies desiring to embrace disruption to focus their transformation priorities. Companies must commit to transformation and build that commitment into the business from the top down. The shift to cloud technologies must be prioritized, as well as investment in a modular and flexible enterprise technology stack. AI and machine learning should be leveraged to embed repeatable processes for scaling advanced analytics. Siloed operating models should be done away with in favor of Agile and other new ways of working. Company culture must shift into more risk-taking, combined with effective risk management. Lastly, companies must become “talent magnets,” investing in training as well as offering room to pursue experimental side projects.
"Digital transformation has unlocked significant value already for most companies, but with a
new era of technological evolution, it is only just beginning to exert its disruptive power," said Laura Polasek, Vice President within Bain's Vector practice. "Companies must stay focused on prioritization of their digital agenda to continue to transform and succeed."