Digital Organization

Organizing for Digital: Why Digital
Dexterity Matters

2
Organizational Design is Key to Reaping the
Rewards from Technology Adoption
Figure 1: Labor Productivity in the Electrification Era Surged as Organizations Redesigned Operations
Source: Adapted from Erik Brynjolfsson and Andrew McAfee, “The Second Machine Age”, January 2014
In the late 19th century, the industrial
world’s factories underwent a massive
technology shift as electric power
replaced steam. However, at the outset,
electrification was not accompanied by
significant changes in operations. As a
result, it did not give productivity levels the
expected shot in the arm. In fact, it took
nearly three decades for productivity to
surge, when factories used electrification
to radically rethink their organizational
design (see Figure 1).
With electric motors, manufacturers
realized they could power smaller groups
of machines – and eventually individual
machines – rather than all machines at
once. These developments gave rise
to efficient layouts, such as assembly
lines, with Henry Ford famously reducing
the time to build a car from 12 hours to
2.5 hours in 19131
. Productivity surged
as a consequence of organizational
change, not just the emergence of a new
technology.
Fast forward from the age of electricity
in the 19th century to today’s digital
21st century, and we can see history
repeating itself. Today’s Henry Fords – the
General Electric. The aircraft engine
to industrial products conglomerate
understood the importance of large-scale
organizational change in the journey to
becoming a digital organization. Back
1915=100
40
60
80
100
120
140
160
180
1890 19301900 1910 1920
Productivity Surge CAGR of 2.5% over
15 years (1915 - 1930)
1913 - Ford’s Assembly
Line Begins Operation
CAGR of 1.16% over
25 years (1890 - 1915)
LaborProductivity
Year
digital masters – are harnessing digital
technologies to redesign their operations
and create truly digital organizations:
Starbucks. The company made
organization change its top priority as it
embarked on its digital transformation.
It carved out an internal, venture capital-
style incubator for digital technology
called Starbucks Digital Ventures.
The unit remained separate from the
company’s Marketing and IT groups,
but collaborated closely with both
to drive innovation in the company’s
digital strategy. Further, it brought key
Today’s Henry Fords
– the digital masters –
are harnessing digital
technologies to redesign
their operations and
create truly digital
organizations.
customer-facing initiatives under the
chief digital officer’s purview in an effort
to boost customer loyalty and growth.
As Starbucks chief digital officer Adam
Brotman says, “Before the CDO position
was created, my job was web, mobile
and social media. It wasn’t global digital
marketing, it wasn’t card, and it wasn’t
loyalty. Those were in three different
separate groups in the organization. We
realized those were all one thing and they
all work best together. If you listed the
vision for where we wanted to go with
digital, it was encompassing all those
things.”2
By bringing these fragmented
responsibilities together, Starbucks
strengthened its digital unit and set the
stage for its digital leadership. Today, 12
millionpeopleactivelyuseStarbucksapps,
conducting seven million transactions
a week. Starbucks’ loyalty program has
eight million active members, helping the
company become one of retail’s most
powerful mobile ecosystems3
.

3
N=135; Percentages indicate share of firms whose respondents report “Better than most” or “An Industry Leader” performance relative to their competitors or industry
Source: Capgemini Consulting analysis
and automating processes. Its simplified
organizational structure will also eliminate
nearly 1 ,000 dual reporting lines.
in 2011, GE’s software efforts were
distributed across the firm. Software
talent, as well as products, were based
in silos, creating a fragmented landscape
and undermining its objectives. Moreover,
analytics capabilities were limited. As GE’s
chief digital officer, Bill Ruh, puts it, “Every
one of our products had a different
underpinning platform, architecture,
technology, and set of vendors. It was
taking us years to build the software,
and years to get it out the door. And
customers’ needs were changing too
rapidly to keep up.”4
In the years that
followed, Ruh and other senior leaders
identified and eradicated key inefficiencies
by consolidating and co-locating talent
and building standard, enterprise-wide
technology platforms. The company set
aside $1.5 billion for boosting analytics
capabilities5
, assembled 1200 software
engineers, and formed GE Digital –
which brings all of GE’s software and IT
capabilities under one organization– to
become the go-to-platform that powers
the Industrial Internet6
. Today, GE
monitors and analyzes 50 million data
elements from 10 million sensors on $1
trillion of managed assets daily7
. Using the
new platform, GE Aviation alone analyzed
340TB of data from 3.4 million flights on
25 airlines to improve asset performance
and minimize disruptions8
.
HSBC. The multinational banking and
financial services organization has been
under pressure to drive down its cost
base in order to stay competitive. It also
had to meet the growing industry-wide
need for automation. These pressures
forced HSBC towards a large-scale
transformation that had organizational
change at its heart9
. The transformation
will shift 70% of its operations staff to
offshore locations and plans to eliminate
750 legacy systems across different
organizational units. The ultimate aim
is to streamline IT and operations in
order to generate up to $5 billion in
cost savings and more than $1 billion
of investment in digital. Furthermore,
HSBC will significantly re-shape global
finance and risk functions to save up to
$700 million by re-engineering, simplifying
Digital Organizations All Firms
90%
70%
80%
41%
35% 34%
46%
35%
Customer Satisfaction Partnership Relationship
Strength
Innovativeness Profitability Growth
90%
80%
GE set aside $1.5 billion
for boosting analytics
capabilities, assembled
1200 software engineers,
and formed GE Digital
– which brings all of
GE’s software and IT
capabilities under one
organization.
Figure 2: Digital Organizations Outperform their Peers

4
Digital Organizations Enjoy a
Competitive Edge
Our research shows that digital
organizations – firms that have redesigned
their organizations to adapt to digital
while investing significantly in technology
– reported that they outperformed
competitors on key performance
indicators, such as customer satisfaction
andinnovation(seeFigure2).Forexample,
90% of digital organizations believe they
achieve a class-leading performance in
customer satisfaction. This drops to 41%
across all respondents to the survey.
Digital organizations enjoy a competitive
edge and are better equipped to deal with
future disruption.
To understand more about the
capabilities and qualities of these digital
organizations, we launched an in-depth
research study, together with MIT Center
Digital organizations
– firms that have
redesigned their
organizations to
adapt to digital while
investing significantly
in technology – reported
that they outperformed
competitors on key
performance indicators.
for Digital Business, involving over 270
senior executives across 135 enterprises,
13 industries and 28 countries. In the
following sections, we consider the
key issues for organizations as they
navigate the transition towards digital
organizations. In this report, we provide:
ƒƒ The blueprint of the digital
organization and an assessment of
the importance of dexterity in today’s
fast-changing environment.
ƒƒ A guide to becoming a digital
organization: the mindset, practices,
talent, and data and tools required.
ƒƒ A self-assessment of your digital
organizationmaturity,to understand
where your organization sits on
the spectrum from beginner to
accomplished performer.

5
In our previous years’ research into digital
transformation with the MIT Center for
Digital Business, we showed how highly
accomplished organizations are using
investments in digital technologies to
fundamentally transform their capabilities
in key areas, from improving the customer
experience to streamlining operations10
.
However, in today’s volatile and disrupted
world, capability leadership is not enough.
Organizations also need to be nimble and
flexible – dexterous – if they are to respond
to ever-changing technology advances,
emerging competitive disruptions, and
changing customer needs (see Figure 3).
Digital capability is how companies
achieve specific tactical objectives,
Source: Adapted from Soule, D., Puram, A., Westerman, G. and Bonnet, D. “Becoming a Digital Organization: The Journey to Digital Dexterity” (September, 2015),
Working Paper, available at http://ssrn.com/abstract=2697688.
Digital Capability is using digital technology
to improve customer experience, internal
operations or employee engagement.
Digital Dexterity is the ability to self-organize
to deliver new value from digital technologies
Blueprinting Your Digital Organizationa
such as providing services on a mobile
application or facilitating customer self-
service. A number of organizations have
developed digital capabilities to work in
new ways. For instance, over a third of
respondents (36%) say their organization
uses digital technologies to collaborate
across organizational boundaries and
31% say they use digital to standardize
operations.
Digital dexterity is the ability to rapidly
adapt to change: new technologies,
changing customer expectations, industry
shifts, or internally-driven resource
allocation. Dexterity allows an organization
to flex, as the COO of a leading services
company describes. “We are very fluid,”
he explains. “We tend to organize based
on the information and the challenges
that we face at hand. So, we […]
reorganize frequently. And sometimes
things are centralized, and sometimes
things are decentralized11
. Enterprises
with high levels of digital dexterity exhibit
considerable flexibility in terms of their
organization design, allowing enterprise
divisions to pivot in response to market
opportunities. They do so while working
closely with technology partners and
vendors to rapidly take advantage of new
business opportunities.
Dexterity:critical in a fast-changing world
For Tanya Cordrey, Chief Digital Officer at Guardian News & Media, complexity and competitive intensity have reached new levels. “The world
is getting more complicated,” she says. “We’re still wrestling with the enormous changes in the competitive landscape. Not only do we have
a thousand-and-one fantastic little start-ups nibbling at our feet, you also have the likes of Google, Facebook and Apple who have decided
to park tanks on the lawn of news. We have issues around new technologies and where news and content is delivered. We also have shifts
in user behavior. All of those are changing all of the time.”12
Figure 3: A Digital Organization Combines Digital Capability with Digital Dexterity
a
This section adapted from Soule, D., Puram, A., Westerman, G. and Bonnet, D. “Becoming a Digital Organization: The Journey to Digital Dexterity” (September, 2015),
Working Paper, available at http://ssrn.com/abstract=2697688.

6
Digital Dexterity Offers Significant
Advantage
Digital capabilities drive business
results in key areas such as improving
the customer experience, boosting
employee engagement or enhancing
internal operations. However, digital
dexterity allows organizations to
seize opportunities – and respond to
disruptions and changes – much more
quickly than their traditional competitors.
Our research found that organizations
that are high on digital dexterity are more
responsive, better at finding talent, and
able to self-organize at speed. They also
enjoy significant advantages in identifying
and re-deploying expertise when it is
needed and are better at establishing
partnerships (see Figure 4).
Digital dexterity allows
organizations to seize
opportunities – and
respond to disruptions
and changes – much
more quickly than their
traditional competitors.
Firms with the Highest Level of Digital Dexterity All Firms
73%
80%
67%
13%
17%
10%
8%
15%
It is easy to establish
partnerships
It is easy to detect
emerging trends
It is easy to self-
organise quickly
It is easy to find
experts when
needed
It is easy to respond to
customers’ individual
needs and preferences
73%
40%
N=135; Percentages indicate share of organizations agreeing with each statement
But dexterous digital organizations like
these are few and far between. This
cadre of leading organizations exhibits
a digital-first mindset, has digitized
their operations at company-scale, and
holds significant experience and skills
in digital technologies. The workforce of
digital organizations is highly engaged,
collaborative and seamlessly uses
technology tools, operations and
customer data to deliver a superior
performance. However, our analysis
suggests that only 7% of companies
have made the full transition to this
level of sophistication. The majority of
organizations are in a phase of transition
- journeying towards becoming digital
organizations in four key stages (see
Figure 5).
Figure 4: Advanced Level of Digital Dexterity is a Key Advantage over Competition

7
The majority of
organizations are in
a phase of transition
- journeying towards
becoming digital
organizations in four
key stages.
Stalling – These organizations are
grappling with the possibilities of digital
and are unclear on how to deliver results.
They are inflexible, without any significant
digital capability and unable to respond to
emerging trends and customer needs.
Initiating – These firms are mobilized to
start the transition. They invest in digital
expertise and initiate partnerships to
leverage digital opportunities. They start
developing digital capabilities in digitizing
operations, improving communication
and collaboration, and controlling brand
image.
Engaging – Here, enterprise transition
is underway. Firms have various digital
capabilities in personalizing customer
experience, simplifying routine tasks and
enabling collaboration across the firm.
They are able to detect emerging trends
and respond to changing customer
needs.
Self-Reinforcing – At this stage of
evolution, firms become highly flexible
digital organizations. They are able to
rapidly re-organize or self-organize to take
advantage of new digital opportunities.
They have developed advanced digital
capabilities in improving customer
DigitalCapability:Useoftechnology
Digital Dexterity: Ability to self-organize
Stalling
16%
Initiating
56%
Engaging
21%
Self-Reinforcing
7%
experience, operations efficiency and
workforce enablement.
Figure 5: How Firms are Progressing to Become Digital Organizations

8
Every enterprise has the potential to
become a digital organization, but it
will require leadership, investment and
tenacity. Drawing on our research, our
experience in working with clients and
interviews with industry practitioners, we
have identified four dimensions that are
critical (see Figure 6).
ƒƒ Digital-First Mindset: seeking and
prioritizing digital solutions first and
foremost
ƒƒ DigitizedPractices:digitizingoperations
and encouraging collaborative ways of
working and learning
ƒƒ EmpoweredTalent: raisingthedigital
IQ of the organization, developing key
skills and increasing engagement
ƒƒ DataAccess&CollaborationTools:
accessing data and collaboration
tools to drive innovation and share
intelligence across the organization
Digital-First Mindset
A digital-first mindset is a distinguishing
feature of a digital organization. It means
that the default position of the organization
is to employ a digital solution first. For
instance, how does the organization
connect with its customers? How does
it redesign its core processes using the
power of digital technologies? How does
the organization think of addressing any
new challenge using digital technologies
rather than traditional approaches?
In our research, 80% of digital organizations
said that they take advantage of digital
solutions wherever possible, as against
only 37% of all firms. Leading organizations
across the private and public sectors are
taking this approach:
ƒƒ At Pfizer, Kristen Peck, EVP
of Business Development and
Innovation, says: “Our approach is
‘think digital first.’ So when we’re
Becoming a Digital Organizationb
creating content and providing
information, we now ensure that it’s
accessible digitally.”13
ƒƒ The“DigitalbyDefault”programlaunched
by the UK government, which aims
to transition government services
to digital, incorporates a digital-first
mindset. Digital government is a top
priority for each department.
Source: Adapted from Soule, D., Puram, A., Westerman, G. and Bonnet, D. “Becoming a Digital Organization: The Journey to Digital Dexterity” (September, 2015), Working
Paper, available at http://ssrn.com/abstract=2697688.”
b
This section adapted from Soule, D., Puram, A., Westerman, G. and Bonnet, D. “Becoming a Digital Organization: The Journey to Digital Dexterity” (September, 2015),
Working Paper, available at http://ssrn.com/abstract=2697688.”
Automate what
can be
Employ
data-driven
decisions
Encourage
collaborative
learning
Digital-First
Mindset
Data
Access &
Collaboration
Tools
Digital
Organization
Automate what can be
Employ data-driven decisions
Encourage collaborative
learning
Digitized
Practices
Empowered
Talent
Increase use of real-time
customer and
operations data
Introduce collaboration
tools
Prioritize digital solutions
Openly explore digital
opportunities
•
•
Develop digital skills across the firm
Increase engagement within
and beyond the enterprise
•
•
•
•
•
•
•
80% of digital
organizations said that
they take advantage
of digital solutions
wherever possible, as
against only 37% of all
firms.
Figure 6: Four Key Dimensions that Form the Foundations of All Digital Organizations

9
Three Steps to Building a Digital-First Mindset15
1. Communicate the benefits to build engagement
Explain the benefits and make digital transformation meaningful to key stakeholders. Traditional financial and
competitive rationales are important but not sufficient to engage employees’ hearts and minds. You need to articulate
how digital transformation will improve the way people do their jobs — making their work easier, better, faster, or
more fulfilling. You also need to adapt those messages for your different organizational communities. For example,
explain to your finance department how digital tools will increase the visibility and accuracy of financial reporting;
show your marketers how to get a more refined, data-rich view of their customer segmentation.
2. Walk the talk
By acting as a role model for the desired change and encouraging your colleagues to do so, you take the first
important step in earning the right to engage your employees. Coca-Cola faced huge challenges when it deployed
its internal social collaboration platform. Only when Coke’s executives became engaged on the platform did the
community become active. “With executive engagement, you don’t have to mandate activity.”16
3. Align reward structures to digital
The reward structures for sustaining digital transformation should not be just financial. Intangible incentives such as
status, reputation, recognition, expertise, and privileges are great managerial levers to drive employee motivation,
productivity, and ultimately reach your transformation goals. For example, Chilean mining company Codelco and
technology company EMC created internal innovation awards to promote new ideas, encourage workers to innovate,
and drive culture change.
ƒƒ Capital One’s CEO Richard Fairbank
has stated: “Digital is who we are
and how we do business. We need
to make digital how we do business
not only with our customers, but also
how we operate the company.”14
Today, more than 75% of Capital
One’s customer transactions happen
over digital channels.
Developing a digital-first mindset is
important in improving both digital
capability and digital dexterity. Leaders
with a digital-first mindset will invest
more in developing digital capabilities in
the customer experience, operational
efficiency and workforce enablement.
Since a digital-first mindset values
systematicexperimentationandcontinues
to keep a look out for new technologies,
digital dexterity is reinforced.
Digital is who we
are and how we do
business. We need to
make digital how we
do business not only
with our customers, but
also how we operate the
company.
– Richard Fairbank,
Capital One

10
Digitized Practices
Digitizedoperations,data-drivendecision-
making and collaborative learning are
essential practices for organizations’
adaptability and long-term resilience. In
our survey, 80% of digital organizations
believed that their core operational
processes were automated and digitized.
Across all firms this drops to 32% (see
Figure 7).
ƒƒ Digitized operations: Lloyds
Banking Group invested in a 4-year
technology program that automated
and simplified its unique business
processes from 700 to just 2317
.
Lloyds cut the time it took its staff to
close old accounts from 30 minutes
to 3 minutes and for customers to
transfer money to Individual Savings
Accounts (ISAs) from a couple of
days to within 24 hours. This initiative
also allowed Lloyds to achieve
annual savings of £352 million17
.
ƒƒ Data-driven decisions: P&G is a
leader in the use of data and analytics
practices for decision-making. They
support real-time decision making
through “Decision Cockpits” that
provide a single source of truth for
data to all decision-makers across
geographies and business units.
This in turn has helped P&G speed
up decision-making and reduce time
to market19
.
80%
32%
90%
30%
38%
100%
51%
Our transactions with
suppliers are digitized
We systematically gather
and analyze process
data to improve how
we work
We make decisions
based on data and
analytics
Our leaders encourage
collaborative problem
solving
Our core operational
processes are
automated and digitized
80% 80%
29%
Collaboration without
regard to function,
geography, or silo will
help firms build their
dexterity.
ƒƒ Collaborative learning: Sodexo, a
global provider of on-site services,
uses a social learning program that
promotes peer-to-peer learning and
has helped break down functional
silos within the organization20
.
Collaboration without regard to
function, geography, or silo will help
firms build their dexterity. NTT Data
developed a collaborative learning
tool to build leadership skills among
its employees. The game has
successfully increased the number
of employees taking up leadership
roles by 50% compared to traditional
training methods21
.
P&G supports real-time
decision making through
“Decision Cockpits”
that provide a single
source of truth for data
to all decision-makers
across geographies and
business units.
Figure 7: How Digital Organizations Advance Their Practices and Operations

11
Collaborative learning also reinforces all
other practices, making it a critical quality
of a digital organization that embodies
dexterity. An EVP of a leading technology
design firm believes this means shifting
from a traditional view of organization
structure to something more dynamic.
“People have a natural way of working
across boundaries, interdependently,
Three Steps to Digitizing Your Practices22
1. Zero-Base Your Processes with Digital
Start by hitting refresh on your operational practices. Without being biased to current workflows, rethink your current practices
with a digital solution at the forefront. Encourage a systematic gathering and analyzing of data to not only drive decisions, but
identify improved ways of working – adapting your processes even further.
2. Encourage Adoption, Not Deployment of Tools
Implementations of tools that measure success in terms of live sites or licenses focus only on deployment, not adoption.
They miss the true value of their digital investments: collaboration among actively engaged users, smarter decision-making,
increased sharing of best practices and, over time, sustained behavior change. Encouraging employees to adopt digital tools
and technologies, and doing so visibly – through role modeling, gamification, rewards, or any other methods – can have a
significant impact on behaviors.
3. Institutionalize New Work Practices
Ensure new work practices become the default and adapt your management and people processes to institutionalize the
updated process. This should be a key opportunity for your HR or organization development functions to take a leadership role
in the transformation. Also, question your intuition—ensure that your most important managerial decisions are based on the
power of data and analytics. Fight against organization fragmentation and silo-based thinking. Encourage the transparency,
core process standardization, and operations efficiency that digital technologies provide.
which does not resemble a traditional
organization chart. We started to remove
business lines, and business groups, and
those vertical silos. Now, we have one of
the most fluid, dynamic organizations in
our company’s history.”23
Collaborative
learning, coupled with an engaged and
empowered workforce, offers significant
potential to accelerate a firm’s progress
along the path to digital dexterity.
Empowered Talent
In our survey, 70% of digital organizations
said that their enterprises have well-
established, well-distributed digital skills.
However, across all firms, this drops to just
14%. Digital organizations put a premium
on building widespread digital skills and
ensuring engagement for its people
within and beyond their organization’s
boundaries:
ƒƒ Intel added a Digital IQ training
program for all employees to
increase innovation, communication
and collaboration. Within two years,
more than 20,000 employees
completed the training24
. This sort
of commitment to learning can also
help an organization retain its key
talent and build an appreciation for
digital initiatives.
Engaging the workforce can often mean
changingthecultureandrewardstructures
of the organization. An executive in
charge of talent development emphasizes
the importance of engagement with
employees: “We’re trying to change our
culture because we’re trying to attract
a different kind of talent than we ever
needed before. The expectations of our
workforce are different. So, for example,
we’ve just added non-financial benefits
designed to help people feel that they
are involved in the spirit of the company,
engaged with the company.”26
70% of digital
organizations said
that their enterprises
have well-established,
well-distributed digital
skills. However, across
all firms, this drops to
just 14%.

12
100%
90%
40%
We have access to
Integrated Operational
performance
58%
70%
36%
We have access to
Integrated - End user
data
We have access to
Real-time Financials
data
80%
29%
We have access to
Real-time Customer
data
Providing access to
data can empower and
engage an organization’s
workforce.
Navigating the Journey to a Digital
Organization
As they embark on the journey to
becoming a digital organization,
companies need to prioritize activities
depending on their stage of evolution
(see Figure 9).
ƒƒ Enterprises in the Stalling Stage can
begin by digitizing their practices to
gain immediate cost advantages
offered by digital technologies, which
could help them showcase early
wins. Only 5% of enterprises in the
“Stalling” stage said their operational
processes were automated and
Data Access & Collaboration
Tools
Digital organizations exhibit data capability
levels that are far more advanced than
their peers (see Figure 8). They use data
to drive new levels of efficiency and
customer responsiveness. For example,
UPS’s ORION system uses prescriptive
analytics that integrates its operations
and customer data to optimize delivery
requirements and route alternatives,
prompting drivers – in real time – to the
shortest, safe route out of its 200,000
options. This system is expected to save
UPS more than $300 million per year
once fully implemented.27
Providing access to data can also
empower and engage an organization’s
workforce. At 7-Eleven Japan (SEJ),
store managers can adjust any order
they have placed in real time. Managers
can even adjust orders on a daily basis,
such as ordering more hot food on days
that are expected to be cold and rainy.
In a company where more than 50% of
products are new each year, SEJ values
local input, giving full reign to store
managers to experiment on what will
“Ambitious employees will want to remain innovative so create opportunities for them to work on new initiatives. If they can
develop new skills at your company, an offer to work elsewhere will be less appealing.”25
– CEO of Wayfair.com
sell the most in their store. Successful
experiments then turn into innovations
that SEJ shares across all of its stores.28
Figure 8: Access to Real-Time Customer and Integrated Operations Data for Digital Organizations

13
tools. Compared to the Initiating
Stage, for example, 52% more will
usedigitaltechnologiestocollaborate
across boundaries and 46% more
will use technology to standardize
operations and reduce exceptions.
Increasing access to customer and
operations data and collaboration
tools will further increase the digital
capability of companies in this stage
of development.
ƒƒ Organizations in the Self-Reinforcing
Stage are digital organizations that
are exploring new opportunities
and addressing emerging design
possibilities for maintaining their
competitive advantage. Enterprises
in this stage understand that being
digital is an ongoing journey and use
their rare ability to self-organize and
reorganize to meet even the most
accelerated changes in their internal
and external environment.
An Organization’s Imperative
Many traditional brick and mortars
organizations have pushed forward their
digital agendas. They now have the
foundational capabilities that allow them
to engage in new ways with customers,
exploit big data and operate faster
and better. However, while they have
changed the way they do business, the
pace of business itself has not changed
for most. Digital businesses move faster
than traditional businesses and new
entrants, disruptive technology or fast
changing customer needs can quickly
expose expose companies’ inability to
adapt. To ensure they stay relevant in this
environment, organizations need to have
the agility to respond to disruption or even
disrupt their own core business. In today’s
uncertain, volatile and complex world, it is
digital dexterity that is of the essence in
an organization’s design. Dexterity means
your organization is truly rewired for the
digital age.
Source: Adapted from Soule, D., Puram, A., Westerman, G. and Bonnet, D. “Becoming a Digital Organization: The Journey to Digital Dexterity” (September, 2015),
Working Paper, available at http://ssrn.com/abstract=2697688.”
Stalling EngagingInitiating Self-Reinforcing
StrategiesDefinition
•
•
•
•
•
•
•
•
•
•
•
Enterprises are grappling
with digital possibilities,
unclear on what is
practical and how to
achieve results for their
organization.
Enterprises are
mobilized to start the
transition, but still
unclear on what is
realistic to achieve.
Enterprise transitions
are underway and
experience the largest
growth.
Digital organizations that
are able to rapidly
reorganize and
self-organize to take
advantage of digital
opportunities.
Digitize Practices as they
offer early beneﬁts:
Zero-base practices and
services with digital
technologies
Encourage adoption, not
deployment of tools by
relying on digitized
information to inform
decisions
Institutionalize new work
practices, encourage
transparency and
standardization that come
with digital technologies
Emphasize the
importance of digital:
Reinforce the benefits of
digital to individual
constituents
Walk the talk by acting as a
role model at the
leadership level
Improve reward structures
to digital including
non-financial and intangible
benefits
Enhance characteristics
based on digital
capability initiatives:
Improve access to
customer data to improve
customer experience and
operations data for
operational efficiency
Improve collaborative tools
and engagement
opportunities for workforce
enablement
Use organizational
characteristics to explore
new possibilities:
Use an engaged workforce
and digital-first mindset to
highlight new technologies
for you
Use digitized practices to
quickly respond to customer
needs and identify trends
Use collaboration within and
beyond your enterprise to
quickly form partnerships
digitized, whereas 80% in the “Self-
Reinforcing” stage said they were.
Firms will benefit by zero-basing
practices with digital, focusing
on adoption, and collaborating
across the firm when digitizing their
operations.
ƒƒ 56% of firms were in the Initiating
Stage, where they are mobilized
to begin the transition. While
mobilized for action, they still lack
certainty about the advantages
and practicality of digital solutions.
These organizations will benefit from
reinforcing a digital-first mindset
- reminding employees about the
benefits, leading by example, and
aligning reward structures.
ƒƒ As organizations reach the Engaging
Stage, they have developed
momentum and experience across
most dimensions, e.g. mindset,
practices, talent, data access and
Figure 9: Strategies on an Organization’s Journey to become a Digital Organization

14
How Digitally Mature is Your Organization?
This assessment can help you understand
where your organization stands on the
journey to becoming a digital organization.
The survey comprises 32 questions
to assess your organization’s position
across the four dimensions: a digital-first
mindset, digitized practices, empowered
talent, and data & tools capability.
How to use this assessment:
1. Assign a score between 1 and 6 for
your organization on each statement.
2. Calculate the score per characteristic
byaveragingthescoresforstatements
under that characteristic
3. Sum the average scores calculated
to arrive at the overall score for your
organization
To what extent do you agree
or disagree with the following
statements:
Strongly
Disagree
Disagree
Somewhat
Disagree
Somewhat
Agree
Agree
Strongly
Agree
Score
1 to 6
Average
Score per
Characteristic
Digital-First Mindset
We take advantage of digital
solutions wherever possible
1 2 3 4 5 6
People naturally think of digital
technologies when we consider
ways to improve
1 2 3 4 5 6
Practices: Digitized Operations
Our core operational processes
are automated and digitized
1 2 3 4 5 6
We monitor our operations in
real time
1 2 3 4 5 6
Our transactions with suppliers
are digitized
1 2 3 4 5 6
We standardize processes that
require human input
1 2 3 4 5 6
Practices: Data-Driven Decisions
We make decisions based on
data and analytics
1 2 3 4 5 6
We define clear expectations
and metrics for roles and
responsibilities
1 2 3 4 5 6
We systematically gather and
analyze process data to improve
how we work
1 2 3 4 5 6
Practices: Collaborative Learning
Our leaders encourage
collaborative problem solving
1 2 3 4 5 6
People collaborate seamlessly
across disciplines and specialties
1 2 3 4 5 6
Our leaders promote a culture of
experimentation and learning
1 2 3 4 5 6
Decision-making responsibility
is appropriately centralized or
decentralized
1 2 3 4 5 6
Our culture values information
transparency and openness
1 2 3 4 5 6
4. Compare the overall score with
the legend provided at the end
of the survey to understand your
organization’s digital maturity
5. To identify which characteristic
require most improvement,
undertake a relative comparison
between the average scores per
characteristic
Source: Assessment items adapted from research survey conducted by MIT Center for Digital Business and Capgemini Consulting

15
Talent: Technology Experience
Our organization has
experience with mobile devices
and applications
1 2 3 4 5 6
experience with social media
tools and data
1 2 3 4 5 6
experience with big data and
advanced analytics
1 2 3 4 5 6
experience with artificial
intelligence and machine
learning
1 2 3 4 5 6
experience with the internet
of things
1 2 3 4 5 6
Talent: Digital Skills
Digital skills are widely
distributed across our
enterprise
1 2 3 4 5 6
Our enterprise has the skills
necessary to conduct digital
initiatives
1 2 3 4 5 6
Talent: High Engagement
Our workers are self-motivated 1 2 3 4 5 6
Our workforce is highly
competent
1 2 3 4 5 6
We have a strong
entrepreneurial instinct
1 2 3 4 5 6
Data Access and Collaboration Tools
We have communication,
feedback, and collaboration
tools that make it easy to be
productive
1 2 3 4 5 6
We can access flexible
computing power and storage
(e.g. through cloud services and
external assets)
1 2 3 4 5 6
Characterize the availability
of the following in your
enterprise:
Completely
Unavailable
Unavailable
Somewhat
Unavailable
Somewhat
Available
Available
Completely
Available
Score
1 to 6
Average
Score per
Characteristic
Data Access and Collaboration Tools: Real-Time Customer Data
Real-time Customer Data 1 2 3 4 5 6
Integrated End-User Data 1 2 3 4 5 6
Data Access and Collaboration Tools: Integrated Operations Data
Integrated Financial Data 1 2 3 4 5 6
Integrated Operational
Performance Data
1 2 3 4 5 6
Integrated Product/service
Performance Data
1 2 3 4 5 6
Integrated Supply-chain
Performance Data
1 2 3 4 5 6
Overall Score
Overall Score Legend:
10 - 22.5 : Stalling - Your organization is grappling with digital possibilities and unclear on what is practical and how to achieve results
22.5 - 35 : Initiating - Your organization is mobilized to start the transition, but still unclear on what is realistic to achieve
35 - 47.5 : Engaging - Your organization’s transition is underway and can experience the most growth in characteristics
47.5 - 60 : Self-Reinforcing - Your organization has become a digital organization able to rapidly reorganize and self-organize to take
advantage of digital opportunities
Source: Assessment items adapted from research survey conducted by MIT Center for Digital Business and Capgemini Consulting

16
References
1 History.com, “Ford’s assembly line starts rolling”, Accessed November 2015
2 MIT Sloan Management Review, “How Starbucks Has Gone Digital”, April 2013
3 Starbucks Investor Presentation, “Digital Overview – Adam Brotman, chief digital officer”, December 2014
4 Harvard Business Review, “Digital Ubiquity: How Connections, Sensors, and Data Are Revolutionizing Business”, November
2014
5 Capgemini Consulting, “Going Digital: General Electric and its Digital Transformation”, May 2015
6 Forbes, “GE To Take On IBM In The Race For IOT Dominance”, September 2015
7 ge.com, “GE to Open Up Predix Industrial Internet Platform to All Users”, September 2015
8 ge.com, “A cloud purpose-built for industrial data and analytics: with Predix”, Accessed November 2015
9 HSBC Investor Update, “Actions to Capture Value from our Global Presence in a Changed World”, June 2015
10 MIT and Capgemini Consulting, “The Digital Advantage: How digital leaders outperform their peers in every industry”, 2013
11 Interview conducted in June 2014 for MIT Center for Digital Business/Capgemini Consulting research
12 Diginomica, “Digital doesn’t answer everything, says Guardian News & Media CDO”, October 2015
13 Capgemini Consulting, “An interview with Kristin Peck, EVP WW Business Development & Innovation, Pfizer and John Young,
President & General Manager Primary Care, Pfizer”, November 2012
14 Adapted from G. Westerman, D. Bonnet, and A. McAfee, “Leading Digital: Turning Technology into Business Transformation.”
(Boston: Harvard Business School Publishing, 2014)
15 G. Westerman, D. Bonnet, and A. McAfee, “Leading Digital: Turning Technology into Business Transformation.” (Boston:
Harvard Business School Publishing, 2014)
16 HBR, “Convincing Employees to Use New Technology”, September 2014
17 ComputerWeekly.com, “Lloyds customer complaints plummet after automating manual processes”, June 2013
18 Capgemini Consulting, “Backing up the Digital Front: Digitizing the Banking Back Office”, November 2013
19 Capgemini Consulting, “Cracking the Data Conundrum: How Successful Companies Make Big Data Operational”, January
2015
20 TechTarget.com, “Collaborative learning thrusts HR into vanguard of enterprise social trend”, October 2013
21 Adapted from G. Westerman, D. Bonnet, and A. McAfee, “Leading Digital: Turning Technology into Business Transformation.”
(Boston: Harvard Business School Publishing, 2014)
23 Interview conducted for this research in November 2014
24 Harvard Business Review Blog, “Intel’s social media training”, February 2010
25 Fortune, “3 ways to prevent your employees from quiting”, May 2015
26 Interview conducted for this research in June 2014
27 Wall Street Journal, “At UPS, the Algorithm Is the Driver”, February 2015
Research Methodology
Together with the MIT Center for Digital Business, we conducted a survey of 274 industry executives, representing
135 different enterprises across 28 countries. In addition to this survey, we jointly conducted in-depth interviews with
31 executives, representing enterprises from a range of industries. Digital Dexterity is measured from informants’
responses to key items from the survey relating to mindsets and behaviors. Digital Capability is measured
by averaging responses for survey items in three categories: Customer Experience, Operational Efficiency and
Workforce Enablement. The current report adapts findings from our original study [available at http://ssrn.com/
abstract=2697688] and adds new analysis conducted by Capgemini Consulting.

Rightshore®
is a trademark belonging to Capgemini
CapgeminiConsultingistheglobalstrategyandtransformation
consulting organization of the Capgemini Group, specializing
in advising and supporting enterprises in significant
transformation,frominnovativestrategytoexecutionandwith
an unstinting focus on results. With the new digital economy
creating significant disruptions and opportunities, our global
team of over 3,600 talented individuals work with leading
companiesandgovernmentstomasterDigitalTransformation,
drawing on our understanding of the digital economy and
our leadership in business transformation and organizational
change.
Find out more at: www.capgemini-consulting.com
Capgemini Consulting is the strategy and transformation consulting brand of Capgemini Group. The information contained in this document is proprietary.
© 2015 Capgemini. All rights reserved.
Authors
For more information contact
About Capgemini and the
Collaborative Business Experience
France
Stephane Regnier
stephane.regnier@capgemini.com
Sweden/ Finland
Ulf Holmgren
ulf.holmgren@capgemini.com
United States
Chris Miller
christopher.miller@capgemini.com
Norway
Anders Rygh
anders.rygh@capgemini.com
Netherlands
Marc Burger
marc.jc.burger@capgemini.com
Germany
Thomas Friedrich
thomas.friedrich@capgemini.com
United Kingdom
Didier Bonnet
didier.bonnet@capgemini.com
The authors would like to thank George Westerman and Deborah Soule of the MIT Center for Digital Business for their
contributions as well as Ashwin Gopakumar from Capgemini Consulting India.
DIGITALTRANSFORMATION
INSTITUTE
Digital Transformation
Institute
dti.in@capgemini.com
Subrahmanyam KVJ
Manager, Digital Transformation
Institute
subrahmanyam.kvj@capgemini.com
Didier Bonnet
Senior Vice President
didier.bonnet@capgemini.com
Akshita Deora Puram
Senior Consultant
akshita.puram@capgemini.com
Amol Khadikar
Senior Consultant, Digital
Transformation Institute
amol.khadikar@capgemini.com
With almost 145,000 people in over 40 countries, Capgemini is
one of the world’s foremost providers of consulting, technology
and outsourcing services. The Group reported 2014 global
revenues of EUR 10.573 billion. Together with its clients,
Capgemini creates and delivers business and technology
solutions that fit their needs and drive the results they want. A
deeply multicultural organization, Capgemini has developed its
own way of working, the Collaborative Business ExperienceTM,
and draws on Rightshore®
, its worldwide delivery model.
Learn more about us at www.capgemini.com.
Jerome Buvat
Head of Digital Transformation
Institute
jerome.buvat@capgemini.com
China
Julien Bourdinière
julien.bourdiniere@capgemini.com

Digital Organization

More Related Content

What's hot (20)

Similar to Digital Organization (20)

More from Capgemini (20)

Recently uploaded (20)

Digital Organization