The race to digital mastery is on in 2016

Firms that get digital in 2016 will begin to pull away -- those that are not, will begin to fade away. By Martin Gill
Written by Forrester Research, Contributor

When it comes to digital, we are at a pivot point. Digitizing your business isn't about technology: it's about customer obsession -- and in 2016, it will be among your ten critical business success factors helping position your firm for success in the Age of the Customer. In fact, next year will be a year of consequence: those firms that "get digital" will begin to pull ahead, and those firms that don't will begin to look increasingly archaic, facing the risk of extinction.

The preliminary results from our recent digital business survey are telling. An increasing number of firms are reporting that they have a coherent and comprehensive digital strategy. While this is good news, these firms are still the minority. The vast majority of firms report that their approach to digital is limited at best, and non-existent at worst. But the consistently bleak picture is that most executives think the wrong people are in charge of their digital activities and few (very few) think they have the capabilities to deliver.

But there are some shining lights.

Leading firms like John Deere are paving the path to digital mastery, demonstrating revenue and share price growth that outpaces less digitally savvy competitors. Executive committees are taking note. Innovation spend is on the rise, digital skills are in hot demand, and a new breed of digitally savvy senior leaders is finally emerging.

As we enter 2016, we expect to see:

Who leads matters more than ever. Savvy CEOs will resolve digital ownership. They'll realize that digital is their responsibility, just as it is the responsibility of every member of their executive team. They'll face some tough leadership decisions, though. Those that can attract and retain increasingly digitally savvy CIOs, like Andy Wolfe at Shop Direct; digitally adept operational executives like Carlos Torres Vila, who was promoted from head of digital banking to chief operations officer at BBVA; and visionary senior digital leaders like Scott Wilson, VP of eCommerce and merchandising at United Airlines will thrive. Those that can't will fall surely and steadily behind.

Your old ways of working (and employees) can't deliver any more. Digitally-savvy employees will be in demand more than ever before. Firms in less desirable locations will continue to buy talent by acquiring Silicon Valley startups and software houses. They'll open labs and funky new offices in Shoreditch and Manhattan. They'll do anything they can not to look like stodgy old accountancy or insurance firms. For many, these efforts will be lip service. A hundred or so cool kids in a redbrick agency-style office means the mothership can assume "hey, digital is their problem". The brightest of senior executives will realize that it's time to shake up their culture, challenge old ways of working, kick down some cubicle walls and champion a new wave of cross-functional collaboration.

Culture is the critical path. That lack of vision, coupled with a shortage in skills and organizational, political, and cultural inertia will hold many firms back. Executive teams will slowly begin to realize that digital transformation is a cultural shift, not a technology problem. It's no coincidence that many of the most digitally mature firms are smaller, leaner and employ fewer people than their least mature counterparts. It's just easier to pivot 1,000 people than 100,000. But size can't be a barrier. Behemoths like GE and Phillips are making the shift.

Forrester's Predictions 2016: The Race To Digital is now available. We've taken data and insights from our Business Technographics, eBusiness panel, and our recent digital business survey conducted with Odgers Berndston (Nigel Fenwick will be publishing the results soon) and combined the results with insight and direction we've received from dozens of executives in leading digital firms to predict what 2016 holds for digital business.

We hope you enjoy the results.

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