How to Future-Proof Your Bottom Line Through Digital Transformation
Here today, gone tomorrow - that's the well-known narrative of companies that resisted change until the digital wave swallowed them whole.
Borders bet on CDs and brick-and-mortar stores as readers started digital libraries; Blockbuster neglected the customer experience as Netflix morphed into an addictive digital streaming service; Montgomery Ward’s mail-order catalogue business withered on the vine as other retailers refreshed their images for the digital age.
Now, all that’s left of these companies is a cautionary tale about adaptation — and what happens to businesses that fail to evolve.
Even industry behemoths are not immune to the swift and unforgiving pace of change. According to Yale University Professor Richard Foster, the average life span of S&P 500 companies has decreased from 67 years in the 1920s to only 15 years in 2012.1
To gain a better understanding of leaders’ attitudes toward digital innovation — and what it will take to survive in the coming years — we conducted a global survey2 of 180 executives across a wide variety of industries.
We discovered that 84 percent of leaders feel that digital innovation is important to their business today, and 86 percent feel that it’s important to their future. Yet two-thirds3 of C-suite executives say their enterprises have a weak digital-physical strategy or no digital physical strategy at all.
Unfortunately, when an organization falls behind the digital curve, it’s often those same leaders who take the blame. Last year, CEO turnover reached the highest it’s been since 2008,4 and the average tenure for CIOs and CMOs has settled around 52 months5 and 45 months,6 respectively.
Target replaced its CEO and CIO after the company suffered a disastrous data breach in 2013, and Wal-Mart found a new CEO after slumping sales showed that the big-box retailer was not prepared to compete in the Age of Amazon.
These leadership changes aren’t always fair or prudent, but they reflect a legitimate fear of obsolescence. To prove your value and stop your organization from joining the ranks of companies like Blockbuster, Borders, and Montgomery Ward, you need to make digital transformation your number one priority.
*North Highland conducted a global survey of over 180 executives across a variety of industries with revenue in excess of $500M
- Gittleson, K. (2012, January 19). Can a Company Live Forever? Retrieved May 29, 2015, from http://www.bbc.com/news/business-16611040
- North Highland conducted a global survey of over 180 executives across a variety of industries with revenue in excess of $500m
- The Customer-Activated Enterprise: Insights from the Global C-suite Study. (2013, October 1). Retrieved May 29, 2015, from http:// public.dhe.ibm.com/common/ssi/ecm/gb/en/gbe03572usen/GBE03572USEN.PDF
- Nash, K. (2015, March 12). Meet the New Boss: CEO Turnover Can Imperil CIOs. Retrieved May 29, 2015, from http://blogs.wsj.com/ cio/2015/03/12/meet-the-new-boss-ceo-turnover-can-imperil-cios/
- Zetlin, M. (2011, March 7). Surviving CIO Regime Change. Retrieved May 29, 2015, from http://www.computerworld.com/article/2549893/it-management/surviving-cio-regime-change.html
- Vranica, S. (2013, March 23). Average CMO Tenure: 45 Months (But That’s an Improvement). Retrieved May 29, 2015, from http://blogs. wsj.com/cmo/2014/03/23/cmos-work-lifespan-improves-still-half-that-of-ceos-study/