You can keep throwing money at digital initiatives, but large IT budgets do not necessarily equate to digital success. Rather, it’s a cultural mindset that moves the needle toward growth and success.
That’s the word from Marco Iansiti and Satya Nadella, who looked at the digital success rates of 150 companies in a recent Harvard Business Review article. They found that “outcomes did not depend on the relative size of IT budgets. Nor were the success stories confined to ‘born digital’ organizations.” Rather, creating a digital innovation mindset and culture is the defining factor.
Throwing gobs of money at the opportunity “does not result in more growth or better performance; in fact, in some cases it can actually damage the business if it accentuates divisions and inconsistencies across groups,” Iansiti and Nadella observe.
It’s interesting to hear that tech alone doesn’t deliver nirvana, especially from the head of one of the largest tech vendors in the world — Nadella is chairman and CEO of Microsoft.
Digital success is tied to “architectural, managerial, and organizational approaches,” they write. Of course, technology is still a cornerstone of digital efforts. Tech intensity is key to supporting a culture friendly to digital innovation, Iansiti and Nadella claim. This refers to the proliferation of tools, platforms, and access to all levels of employees. Such digital democratization doesn’t spring up overnight. Rather, it evolves through a series of stages. From their study of 150 companies, Iansiti and Nadella pinpoint five different stages:
The study’s conclusion is clear: to make digital transformation work, everyone needs to be involved in it, have a stake in it, and be encouraged — and not coerced — to participate.