What’s your Digital IQ—and is it driving business growth?post by Chris Curran on October 16, 2015
That’s the billion-dollar question for CIOs and other digital leaders today. And no doubt you’ve asked yourself a variation of it on a daily basis—or your CEO or board of directors has.
How do you really know if you’re getting the return on your technology investments that everyone expects?
The stakes are high. With digital the corporate mantra, at times it seems like it’s the pat answer to every strategic question. And while we’ve come a long way in thinking about technology’s business value—from the days of IT automating business processes, to the ecommerce bandwagon, and, now, today’s mobile mindset—most companies have yet to fully connect digital with business growth.
That’s where your Digital IQ® comes in. We’ve been studying Digital IQ—how well organizations understand technology, weave it throughout the business, and get the returns they seek—since 2007. This year we analyzed data from nearly 2,000 executives (split evenly between IT and business roles) in 51 countries to better understand today’s state of play. Our findings are encouraging: a strong correlation between 10 critical practices around digital and better financial performance. Those organizations that embraced these practices—those in the top quartile whom we call our Digital IQ leaders—were twice as likely to achieve more rapid revenue and profit growth as the laggards in our study.
You can use Digital IQ to gauge how well positioned your company is by better understanding how it’s doing in each of the 10 areas that span digital strategy, innovation, and execution. It’s an especially powerful tool when you use it to structure a discussion with other company leaders. I recently conducted a customized Digital IQ benchmark survey with 125 global leaders at a large industrial company. While their Digital IQ score was quite strong, exploring each of the 10 attributes revealed that they were significantly behind in the way they communicate and develop a shared digital vision.
Of course, first you need to be on the same page about what value you’re after. We discovered that there’s often a disconnect between what business leaders say they want and where they’re putting their resources. Or the CEO expects one thing, but the CIO and CDO are focusing on another. In our survey, we asked executives what value they expect from digital investments—financial value, customer value, operational value, or disruption. And given all the talk about disruption in the marketplace and in the board room, we expected disruption to rank highly of the 10 choices.
Boy, were we wrong. Just 1% of executives said their number-one expectation for digital was to disrupt their own or other industries. (When asked to pick three choices, the number rises to 8%.)
And things got even more interesting when we looked across the C-suite. Everyone agreed that growing revenue and increasing profits were the most important returns from digital, but we see a different story about other priorities. For example, five times as many CEOs have disruption on the radar than CDOs.
It’s these differing expectations that can get a company in trouble, and why syncing up on strategy is so crucial to digital success. Four of the 10 Digital IQ attributes cover how you set and share strategy: a CEO champion, digital leaders driving strategy, an engaged executive team, and strategy-sharing throughout the organization.
To learn more about these practices and the six others that make up Digital IQ, explore the research here.
What value do you and your company’s leaders expect from digital investments? How do you compare to the executives in our study? We’d love to know.