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Accelerating digital innovation inside and out

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The fifth annual MIT Sloan and Deloitte study of digital business reveals digitally mature organizations don't just innovate more, they innovate differently—leveraging ecosystems and cross-functional teams that play critical roles.

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Accelerating digital innovation inside and out

  1. 1. Accelerating Digital Innovation Inside and Out Agile teams, ecosystems, and ethics 0 6 / 0 4 / 2 0 1 9
  2. 2. 2 | Copyright © 2019 Deloitte Development LLC. All rights reserved. 2019 MIT Sloan Management Review and Deloitte Digital global research study2 | Copyright © 2019 Deloitte Development LLC. All rights reserved. 2019 MIT Sloan Management Review and Deloitte Digital global research study INTRO
  3. 3. 3 | Copyright © 2019 Deloitte Development LLC. All rights reserved. 2019 MIT Sloan Management Review and Deloitte Digital global research study3 | Copyright © 2019 Deloitte Development LLC. All rights reserved. 2019 MIT Sloan Management Review and Deloitte Digital global research study Our fifth annual research report studying digital trends, 2019 Undertaken by Deloitte Digital in collaboration with MIT Sloan Management Review (MIT SMR) 4,800 125 31% U.S.69% INTERNATIONAL 28 29% E X E C U T I V E I N T E R V I E W S C-suite and other executives, subject matter specialists 14 of business executives, managers, and analysts from organizations globally to understand how the digital enterprise is evolving industries Are +$1B in revenue Business executives and professionals countries S U R V E Y B Y T H E N U M B E R S Survey in Fall 2018 +
  4. 4. 4 | Copyright © 2019 Deloitte Development LLC. All rights reserved. 2019 MIT Sloan Management Review and Deloitte Digital global research study4 | Copyright © 2019 Deloitte Development LLC. All rights reserved. 2019 MIT Sloan Management Review and Deloitte Digital global research study Accelerating innovation through digital ecosystems Digitally maturing companies are not only innovating more, they are innovating differently. As innovation continues to accelerate, digitally maturing companies are considering both the social and ethical implications of digital transformation.
  5. 5. 5 | Copyright © 2019 Deloitte Development LLC. All rights reserved. 2019 MIT Sloan Management Review and Deloitte Digital global research study5 | Copyright © 2019 Deloitte Development LLC. All rights reserved. 2019 MIT Sloan Management Review and Deloitte Digital global research study Digital ecosystems, platforms, and cross- functional teaming spur innovation Our research shows that digitally maturing organizations are more innovative, are more likely to engage in external partnerships and ecosystems for digital innovation, and are more likely to be organized into cross- functional teams. More importantly, it's not just that they do these things more often, it’s that they fundamentally approach these activities differently than do their less mature counterparts. These companies reflect what Karl Weick called a loosely coupled organization - those that are characterized by increased autonomy of business units and more relational governance. As organizations collaborate more internally and externally and in more rapid, agile ways, ethical challenges can arise.
  6. 6. 6 | Copyright © 2019 Deloitte Development LLC. All rights reserved. 2019 MIT Sloan Management Review and Deloitte Digital global research study6 | Copyright © 2019 Deloitte Development LLC. All rights reserved. 2019 MIT Sloan Management Review and Deloitte Digital global research study INNNOVATION
  7. 7. 7 | Copyright © 2019 Deloitte Development LLC. All rights reserved. 2019 MIT Sloan Management Review and Deloitte Digital global research study7 | Copyright © 2019 Deloitte Development LLC. All rights reserved. 2019 MIT Sloan Management Review and Deloitte Digital global research study How close is your organization to that ideal? Connecting innovation with digital maturity Imagine an ideal organization utilizing digital technologies and capabilities to improve processes, engage talent across the organization, and drive new and value-generating business models. 1 2 3 4 5 6 7 8 9 10 3% 7% 14% 13% 14% 17% 16% 10% 4% 2% E A R L Y D E V E L O P I N G M AT U R I N G 24% 44% 32%
  8. 8. 8 | Copyright © 2019 Deloitte Development LLC. All rights reserved. 2019 MIT Sloan Management Review and Deloitte Digital global research study8 | Copyright © 2019 Deloitte Development LLC. All rights reserved. 2019 MIT Sloan Management Review and Deloitte Digital global research study Innovation drives digital maturity At these companies, continual improvement is the new normal, and staying at the forefront of digital innovation demands repeated self-reinvention. Digital innovation is a strength of my organization E A R L Y D E V E L O P I N G M AT U R I N G 81% 36% 10% (respondents who agree or strongly agree)
  9. 9. 9 | Copyright © 2019 Deloitte Development LLC. All rights reserved. 2019 MIT Sloan Management Review and Deloitte Digital global research study9 | Copyright © 2019 Deloitte Development LLC. All rights reserved. 2019 MIT Sloan Management Review and Deloitte Digital global research study … but not everyone is committed Innovating toward maturity E A R L Y M AT U R I N G My organization provides enough resources (time, money, people) to support innovation. My organization cultivates or supports an entrepreneurial mindset among its employees. My organization has moved significantly closer to an ideal digital maturity over the past three years. 15% 32% 22% 39% 51% 60% 74% 77% 87% D E V E L O P I N G D I G I TA L M AT U R I T Y (respondents who agree or strongly agree)
  10. 10. 10 | Copyright © 2019 Deloitte Development LLC. All rights reserved. 2019 MIT Sloan Management Review and Deloitte Digital global research study10 | Copyright © 2019 Deloitte Development LLC. All rights reserved. 2019 MIT Sloan Management Review and Deloitte Digital global research study 1 2 3 4 5 6 7 8 9 10 0% 20% 40% 60% 80% 100% <10% of my work involves the opportunity to experiment and innovate. >10% A little goes a long way As companies mature digitally, they allocate time for their employees to innovate. Making space for innovation and experimentation D I G I TA L M AT U R I T Y %OFRESPONDENTS
  11. 11. 11 | Copyright © 2019 Deloitte Development LLC. All rights reserved. 2019 MIT Sloan Management Review and Deloitte Digital global research study11 | Copyright © 2019 Deloitte Development LLC. All rights reserved. 2019 MIT Sloan Management Review and Deloitte Digital global research study One important way digitally maturing companies innovate is by participating in digital ecosystems A digital ecosystem can include traditional partnerships and consortia but is broader and can encompass less formal ways in which firms collaborate. Innovation ecosystems may include start-ups, large companies, and academics or digital platforms that include multiple layers of activities. We consider ecosystems to be a group of companies cooperating on innovative activities, often without formal ties
  12. 12. 12 | Copyright © 2019 Deloitte Development LLC. All rights reserved. 2019 MIT Sloan Management Review and Deloitte Digital global research study12 | Copyright © 2019 Deloitte Development LLC. All rights reserved. 2019 MIT Sloan Management Review and Deloitte Digital global research study Partnerships and digital maturity Leaders across all maturity levels recognize the importance of partnerships to innovation, but only at the maturing level are organizations consistently cultivating them. My organization’s external partnerships are vital to its digital innovation efforts. My organization cultivates partnerships with other organizations to facilitate digital innovation. E A R L Y D E V E L O P I N G M AT U R I N G D I G I TA L M AT U R I T Y 75% 33% 78% 59% 81% 80% Digitally maturing companies are more than 2x as likely to be cultivating partnerships compared with early-stage companies.
  13. 13. 13 | Copyright © 2019 Deloitte Development LLC. All rights reserved. 2019 MIT Sloan Management Review and Deloitte Digital global research study13 | Copyright © 2019 Deloitte Development LLC. All rights reserved. 2019 MIT Sloan Management Review and Deloitte Digital global research study Networking should be occurring within the organization as well through cross- functional teaming A cross-functional team is loosely coupled in that it is comprised of people from multiple functional areas and gives them the freedom to work across traditional organizational boundaries.
  14. 14. 14 | Copyright © 2019 Deloitte Development LLC. All rights reserved. 2019 MIT Sloan Management Review and Deloitte Digital global research study14 | Copyright © 2019 Deloitte Development LLC. All rights reserved. 2019 MIT Sloan Management Review and Deloitte Digital global research study E A R L Y D E V E L O P I N G M AT U R I N G Hallmarks of digitally maturing teams Digitally maturing organizations operate cross-functional teams differently than early stage companies. Cross-functional team leaders in my organization have considerable autonomy regarding how to accomplish team goals. My organization effectively evaluates the performance of cross-functional teams as a unit, instead of evaluating only the individual performances of the people on that team. Our organization's senior leadership effectively creates an environment in which our cross-functional teams can succeed. 38% 53% 69% 20% 33% 54% 29% 48% 73%
  15. 15. 15 | Copyright © 2019 Deloitte Development LLC. All rights reserved. 2019 MIT Sloan Management Review and Deloitte Digital global research study15 | Copyright © 2019 Deloitte Development LLC. All rights reserved. 2019 MIT Sloan Management Review and Deloitte Digital global research study ETHICS
  16. 16. 16 | Copyright © 2019 Deloitte Development LLC. All rights reserved. 2019 MIT Sloan Management Review and Deloitte Digital global research study16 | Copyright © 2019 Deloitte Development LLC. All rights reserved. 2019 MIT Sloan Management Review and Deloitte Digital global research study As organizations become more networked and distributed, governance models and ethical guardrails need to evolve.
  17. 17. 17 | Copyright © 2019 Deloitte Development LLC. All rights reserved. 2019 MIT Sloan Management Review and Deloitte Digital global research study17 | Copyright © 2019 Deloitte Development LLC. All rights reserved. 2019 MIT Sloan Management Review and Deloitte Digital global research study Ethical guardrails enable agility Digital maturing companies are more likely to have adopted policies to support their organization’s ethical standards with regard to digital initiatives. E A R L Y D E V E L O P I N G M AT U R I N G 43% 16% 62% 30% 76% 57% D I G I TA L M AT U R I T Y >2.5X >2X Our organization has explicit policies in place to support our ethical standards with respect to our organization’s digital initiatives. Our organization’s leaders spend enough time thinking about and communicating the impact our organization’s digital initiatives have on society. B U T M O R E F O C U S I S N E E D E D Less than one-half (46%) of CEOs agree their leaders spend enough time thinking about and communicating the impact of digital on society.
  18. 18. 18 | Copyright © 2019 Deloitte Development LLC. All rights reserved. 2019 MIT Sloan Management Review and Deloitte Digital global research study18 | Copyright © 2019 Deloitte Development LLC. All rights reserved. 2019 MIT Sloan Management Review and Deloitte Digital global research study HOW TO BEGIN
  19. 19. 19 | Copyright © 2019 Deloitte Development LLC. All rights reserved. 2019 MIT Sloan Management Review and Deloitte Digital global research study19 | Copyright © 2019 Deloitte Development LLC. All rights reserved. 2019 MIT Sloan Management Review and Deloitte Digital global research study Believing in the importance of innovation isn’t sufficient— taking action is what matters Look beyond your organization to drive innovation. Loosen formal hierarchies and let teams explore and occasionally fail, learning fast and correcting as you go. Reassess how you cultivate and support cross- functional teams. Establish ethical guardrails as you drive innovation in your company—make it a priority, keep it in mind through all aspects of operations, review more than periodically to keep pace with innovations and market changes. H O W T O B E G I N
  20. 20. 20 | Copyright © 2019 Deloitte Development LLC. All rights reserved. 2019 MIT Sloan Management Review and Deloitte Digital global research study20 | Copyright © 2019 Deloitte Development LLC. All rights reserved. 2019 MIT Sloan Management Review and Deloitte Digital global research study … And don’t forget your organization’s mindset Digital maturity is rooted (at least partly) in mindset and whether people believe they can adapt, or whether they think digital disruption is eroding whatever finite advantage they have. I N 1 0 T O 2 0 Y E A R S , M Y O R G A N I Z AT I O N W I L L … Not exist (either will be out of business or bought by another company) Exist but be in a much weaker position Exist but be in a weaker position Exist and be no better or worse off Exist and be in a stronger position Exist and be in a much stronger position Market and competitive forces Digital capabilities 44% 16% 37% 22% 41% 25% 17% 36% 17% 48% 17% 56% Cause of position change
  21. 21. 21 | Copyright © 2019 Deloitte Development LLC. All rights reserved. 2019 MIT Sloan Management Review and Deloitte Digital global research study21 | Copyright © 2019 Deloitte Development LLC. All rights reserved. 2019 MIT Sloan Management Review and Deloitte Digital global research study Want to learn more? Read the full report here: www.deloitte.com/insights/mit-smr-digital-study.html @DeloitteInsight @DeloitteDigital @MITSMR Join the conversation: #DigitalEvolution
  22. 22. This publication contains general information only, and none of the member firms of Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collective, the “Deloitte Network”) is, by means of this publication, rendering professional advice or services. Before making any decision or taking any action that may affect your business, you should consult a qualified professional adviser. No entity in the Deloitte Network shall be responsible for any loss whatsoever sustained by any person who relies on this publication. As used in this document, “Deloitte” means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte USA LLP, Deloitte LLP and their respective subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting. Copyright © 2019 Deloitte Development LLC. All rights reserved. Member of Deloitte Touche Tohmatsu Limited Thank you. Global Study and study data ©Massachusetts Institute of Technology.

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