Other business areas can benefit from more sophisticated modeling as well. If a digital transformation stalls, the results suggest that organizations can regain momentum by implementing rigorous change-management and internal-communications programs and clarifying the transformation’s projected impact, which can help build alignment and commitment. we set out to understand what organizations can do to prevent burnout or to restart their engines if burnout occurs during these transformations, which previous research has found have a lower success rate than do more traditional transformations. Responses indicate that the factors causing transformations to stall in the pilot stage differ from the factors that keep scaled-up transformations from achieving their expected impact. Improving your odds of success for large scale change programs, Helping you embed technology where it unlocks the most value for your organization, Enabling your people to accelerate and sustain the change, Practical resources to help leaders navigate to the next normal: guides, tools, checklists, interviews and more. In the next 90 days. The group offers various services from IT modernization and strategy to agile, cloud, cybersecurity, and digital transformation. (And, yes, agile can be executed remotely.). Although digital transformations present a great deal of opportunity, they are also more complex and challenging. Remote working can also enable new productivity opportunities, especially for companies with large field forces. Indeed, recent data show that we have vaulted five years forward in consumer and business digital adoption in a matter of around eight weeks. When CEOs step in, the reported success rate is still only 40 percent. A company’s digital transformation strategy will make or break their success in the rapidly evolving global market. 4 Please try again later. “Near term” refers to factors that can usually be overcome within one year, and “medium term” refers to factors that can typically be overcome within three years. Flip the odds. We also asked these respondents what enabled those factors at their organizations. It is not for the fainthearted, but CEOs are heading in the right direction if they grasp the fundamental importance of heavyweight management commitment, are willing to make significant investments, and set clear, ambitious targets. Reinvent your business. McKinsey’s Barr Seitz explains that digital transformation goes much deeper than technology. Manufacturers are actively developing plans for “lights out” factories and supply chains. Please click "Accept" to help us improve its usefulness with additional cookies. New data and completely rebuilt analytical models will be essential to steer operational decisions. Unleash their potential. The findings also suggest that certain interventions are more effective than others at jump-starting stalled digital transformations. Digital transformations also tend … For one, organizations tend to look inward when making such changes. These are McKinsey & Company’s ‘Four Ds’ of digital transformation outlined in a new report.. Changes that require more fundamental work, like setting up a new e-commerce channel, will typically take longer. While many companies have at least a few agile teams in place, few have successfully scaled to hundreds of teams staffed with many more “doers” than “checkers,” which is what’s needed to drive the accelerated organizational pace the crisis—and even the next normal—demands. Jacques Bughin and Nicolas van Zeebroeck, “The best response to digital disruption,” MIT Sloan Management Review, Summer 2017, Volume 58, Number 4, sloanreview.mit.edu. CIOs can contribute to both by rightsizing the IT cost structure to new demand levels and reinvesting the freed-up resources into customer-facing digital solutions and critical decision-support systems, first and foremost. In the latest McKinsey Global Survey on the topic, 1. Create a profile to get full access to our articles and reports, including those by McKinsey Quarterly and the McKinsey Global Institute, and to subscribe to our newsletters and email alerts. One leading provider of residential solar services recently documented record sales using a more remote sales model. They often say their organizations maintain momentum by obtaining strong alignment and strategic clarity before a transformation gets under way. Top economic performers update their digital strategies much more frequently than other companies. “Near term” refers to factors that can usually be overcome within one year, and “medium term” refers to factors that can typically be overcome within three years. Use minimal essential And according to a … Most transformations fail. Once the situation stabilizes, CEOs and business leaders should push their data and analytics teams to develop next-generation models that leverage new data sets and modeling techniques better suited for fast-changing environments. In the next 90 days. Much of the rapid IT work carried out during the COVID-19 crisis might have created new cyberrisk exposures. As one CEO of a large tech company recently stated, “We are witnessing what will surely be remembered as a historic deployment of remote work and digital access to services across every domain.”. Almarai working with McKinsey and SAP on digital transformation. We offer suggestions for a 90-day plan to realign the digital agenda and implement the enablers for acceleration during the recovery and beyond. Our mission is to help leaders in multiple sectors develop a deeper understanding of the global economy. When we asked the quarter of respondents who did not report a slowdown to identify the most important factors for keeping their efforts going, they most often credit strong commitment to the transformation and clarity on the transformation’s strategy (Exhibit 6). Most companies won’t have the management bandwidth and resources to take on a full-scale modernization in the next 12 to 18 months. These two lenses should set the table for targeted changes to the operating model. Please email us at: McKinsey Insights - Get our latest thinking on your iPhone, iPad, or Android device. Companies can also dedicate some of the savings to modernizing selectively the technology stack and software-development tooling. We strive to provide individuals with disabilities equal access to our website. In the same way that many companies had to rebuild risk and financial models that failed during the 2008 financial collapse, models will similarly need to be replaced because of the massive economic and structural shifts caused by the pandemic. And remember to launch appropriate internal efforts to train and prepare teams to operate in the new environment. Something went wrong. In the latest McKinsey Global Survey on the topic, 1. Achieving parity or better across digital channels to win the revenue race, rebuilding the most critical decision-support models, and doubling development velocity are goals that are all within reach. our use of cookies, and The online survey was in the field from May 16 to May 31, 2019, and garnered responses from 1,256 C-level executives and senior managers representing the full range of regions, industries, … Less than half say their objective was either launching new products or services or interacting with external partners through digital channels. By focusing on setting up or enhancing a cloud-based data platform and equipping agile teams with automated software delivery, CIOs can double, or even triple, development velocity in the The online business was interconnected across all functions (warehousing, merchandising, marketing, customer support, et cetera) and improved basket size over physical stores by three times as well as delivering nearly 3 percent like-for-like revenue growth in its main market. Design. In doing so, they will need to confront three structural changes that are playing out. How can organizations avoid getting stuck in the middle of a digital transformation in the first place, rather than spending time and resources to dig themselves out of a rut? This assessment is urgent and should be completed as quickly as possible. In our business, data analytics can help us make decisions with lower risks. Saudi Arabian dairy company Almarai has embarked on the next phase of its digital transformation strategy, working together with consultants and technologists from McKinsey & Company and SAP on driving its realisation. 2 To understand how organizations can restart digital efforts that have stalled, we asked the 36 percent of respondents who say their organizations have regained momentum what steps were taken. Further lessons come from respondents at companies that avoid stalling in the first place. hereLearn more about cookies, Opens in new Banks have transitioned to remote sales and service teams and launched digital outreach to customers to make flexible payment arrangements for loans and mortgages. Automation will be a core driver of many of McKinsey’s recommendations. 1 McKinsey Digital focuses on helping clients use digital technology to transform their businesses. Subscribed to {PRACTICE_NAME} email alerts. 2. The more advanced companies are already creating synthetic data sets using advanced machine-learning techniques, such as generative adversarial networks (GANs) to train new analytical models when historical data are of little use. The current crisis has forced organizations to adapt rapidly to new realities, opening everyone’s eyes to new, faster ways of working with customers, suppliers, and colleagues. De-risk. Finally, many organizations have shifted to remote-working models almost overnight. New skills and resources; The right talent Practical resources to help leaders navigate to the next normal: guides, tools, checklists, interviews and more, Learn what it means for you, and meet the people who create it, Inspire, empower, and sustain action that leads to the economic development of Black communities across the globe. 23 November 2020 Consultancy-me.com. Michael Krigsman: How is this different from digital transformation? In the next 90 days. In this article, we offer a closer look at how E&C companies can realize benefits like these. short term. In effect, remote ways of working have, at least in part, driven the faster execution drumbeat that we’re all experiencing in our organizations. Change, that is, that applies to: Organizational structure; Products and services; Operating models; Culture Please sign in to print or download this article. We know from experience that three months is sufficient to implement and scale a digital factory. Continually measuring digital-channel performance during the 90 days will be critical so that companies can quickly adapt as they learn more. For example, models that use time-series, oil-price, or unemployment data will need to be rebuilt entirely. our use of cookies, and Whether a change effort has succeeded or not, the results point to a few shared traits of today’s digital transformations. As companies construct these models, analytics teams will likely need to bring together new data sets and use enhanced modeling techniques to forecast demand and manage assets successfully. Basically, it allows digital technologies to be integrated into already existing business models, changing the way you operate and deliver your product or service. Organizations will need to validate these models. Learn what it means for you, and meet the people who create it, By now, most C-suite executives have led their companies to digitize at least some part of their business to protect employees and serve customers facing mobility restrictions as a result of the COVID-19 crisis. Digital upends old models. In particular, nearly 40 percent of this survey’s respondents who identify misaligned culture and ways of working as the primary cause of burnout point specifically to hierarchical cultures and siloed ways of working as the biggest killers of digital momentum. Finally, our findings suggest that it also matters who initiates the intervention (Exhibit 5). This finding runs counter to widespread assumptions that external pressures, such as market disruptions or regulatory changes, pose the biggest threats to digital initiatives. We use cookies essential for this site to function well. Most digital transformations don’t yield the benefits that leaders expect. Typically, business-building is a much more radical step for companies because many executives who are very good at running a large company, don't have the ex… To help firms develop successful transformation programmes, consultants from McKinsey & Company have highlighted ten key factors which can help a firm to realise its digital potential. Consider setting up a weekly forum for senior business and technology leaders to process the learnings coming in and drive the full agenda at pace and in a coordinated fashion. (However, most interventions appear to have at least some positive effect on organizations’ abilities to turn things around, and the findings offer no evidence that any of the tested interventions are detrimental to the likelihood that transformations could regain momentum.) In the second 30-day sprint, design the new models with consideration for staffing level, expertise mix, governance, and operating procedures. Chief digital officers and chief information officers (CIOs) can then quickly stand up (or refocus) agile teams to execute the most urgent priorities. Companies must also reimagine customer journeys to reduce friction, accelerate the shift to digital channels, and provide for new safety requirements. If you would like information about this content we will be happy to work with you. Carefully review those that appear too good to pass up to ensure that the providers aren’t capturing all the value. Never miss an insight. The great consumer shift: Ten charts that show how US shopping behavior is changing, How six companies are using technology and data to transform themselves. Other factors, in our experience, typically take longer to address. To understand which tactics may be useful for getting a stalled digital program past the pilot phase, we compared the answers from respondents whose transformations have begun to scale with those whose transformations have stalled in the pilot stage. What crew size is optimal for each flight? When it comes to digital transformation, he explains, we’re really discussing change management. Research by the McKinsey Global Institute indicates that digital transformation can result in productivity gains of 14 to 15 percent and cost reductions of 4 to 6 percent. Practical resources to help leaders navigate to the next normal: guides, tools, checklists, interviews and more. Our mission is to help leaders in multiple sectors develop a deeper understanding of the global economy. A leading financial-services provider, for example, stood up an AI-powered solution to generate leads for its sales agents, with models calibrated to handle the current environment. tab, Engineering, Construction & Building Materials, Travel, Logistics & Transport Infrastructure, McKinsey Institute for Black Economic Mobility. We just hired a CIO whose whole mandate is to look at our digital infrastructure and see how we can future-proof ourselves. In the second 30-day sprint, choose your cloud partners. The data must be reevaluated as well. The good news is that in most cases, organizations can prevent or overcome a loss of momentum. September 2, 2020. Many companies are accelerating their shifts toward digital-first models—at warp speed. Take an airline, for example, that must make many decisions: Which routes should we operate? The right balance will vary by industry, but under any scenario, rightsizing should expose much needed investment capacity as quickly as possible to fund the 90-day plan. Article Consumer decision making in healthcare: The role of information transparency. Lack of clarity was stated as the main obstacle by 17 percent of respondents reporting a stall at the pilot phase, compared with 9 percent of those who say their transformation reached full scale but didn’t meet expectations. For each one, we outline a practical 90-day plan to make it happen (Exhibit 2). For example, the findings suggest that strategic clarity—the primary differentiating root cause between stalls in these two stages—is important for moving past the pilot phase. That type of project can deliver meaningful results in weeks. Should an intervention be needed to reenergize a transformation, having the CEO step in appears to be advantageous. Select topics and stay current with our latest insights, The COVID-19 recovery will be digital: A plan for the first 90 days. ... McKinsey uses cookies to improve site functionality, provide you with a better browsing experience, and to enable our partners to advertise to you. At McKinsey, when we talk about digital transformation, we mean two things at the highest level: transforming the core, which is taking what we do today and leveraging technology to do it better, faster, cheaper, more effectively. For scaling digital programs beyond the pilot phase—the first stumbling block in a transformation’s execution—clarity on the time frame and expected economic impact is important, as is partnering with operations. This information should form the basis of a renewed digital agenda that should take no longer than 30 days to establish. Organizations that, according to respondents, overcame digital fatigue are much likelier than others to have tried each of three interventions: undertaking a rigorous change-management program, improving the economic model for the transformation’s timing and impact, and developing a robust internal-communications plan. McKinsey Quarterly Digital transformation: Improving the odds of success October 22, 2019 | Article. McKinsey COVID-19 US Digital Sentiment Survey, April 2020. operations, supply chains, and organizations overall and to transition their fixed costs to variable costs aggressively wherever possible. Please click "Accept" to help us improve its usefulness with additional cookies. Two interventions are much more likely to be reported at organizations with transformations that have cleared the pilot phase: one is building a more rigorous model for the transformation’s timing and impact, and the other is partnering with the operations function to redesign the transformation (Exhibit 4). As some regions begin reopening, businesses are considering how to return to some semblance of full speed in an unstable environment in which lockdowns will ease (and potentially be reinstated) in waves. For example, an automobile manufacturer now handles functions traditionally performed by dealers, such as trade-ins, financing, servicing, and home delivery of cars. Topic: Digital transformation. Press enter to select and open the results on a new page. 4. Select topics and stay current with our latest insights, How to restart your stalled digital transformation. The model will help the supplier spot potential issues with its own suppliers’ ability to deliver needed items, offering a chance to reach out to its suppliers to work out logistics or find another source. But for most companies, the changes to date represent only the first phase of the changes that will be necessary. Schools in many locales have pivoted to 100 percent online learning and digital classrooms. Ari Libarikian: At McKinsey, when we talk about digital transformation, we talk about two things at the highest level: transforming the core, which is taking what we do today and leveraging technology to do it better, faster, cheaper, more effectively; and we talk about new business building, which really is stepping out of the core and creating something that didn't exist. The McKinsey survey found that the COVID-19 pandemic has significantly accelerated the pace of adoption of digital transformation technologies, as well … Article Virtual health: A look at the next frontier of care delivery. What can realistically be done in 90 days to increase the organizational drumbeat? Additional cuts get deeper into the cost structure and risk hamstringing future growth. Quickly pivoting the business agenda to address these changes will be critical for a successful recovery. cookies, McKinsey_Website_Accessibility@mckinsey.com, keep the organization moving on its digital journey. Modern businesses have several forecasting and planning models to guide such operational decisions. Discover. A solid majority of these respondents—more than 60 percent—say their com­panies’ digital transformations have stalled for reasons that, in our experience, an organization can reasonably control in the near term to medium term. It’s essential to set these targets at the outset and regularly measure progress against them. Yes, the digital world has the potential to accelerate transformation, but you need to understand exactly what digital can do to get the benefits. (And, yes, agile can be executed remotely.) The list goes on. Companies that have led the way in adopting flatter, fully agile organizational models have shown substantial improvements in both execution pace and productivity. One large global bank, for example, built five such factories to support several locations across the Americas. At organizations pursuing digital transformations, more than seven in ten survey respondents say the progress of these efforts has slowed or stalled at some point. More commonly reported sources of derailed progress include resourcing issues, lack of clarity or alignment on a company’s digital strategy, and poor quality of the digital strategy to begin with. collaboration with select social media and trusted analytics partners Our experience suggests that roughly two-thirds of this potential can be achieved through measures such as extending hardware- and software-refresh cycles, rapidly renegotiating vendor contracts, and restricting cloud workloads by turning off noncritical jobs. Fully 75 percent of people using digital channels for the first time indicate that they will continue to use them when things return to “normal.” It will essentially define a program of quick fixes that the data and analytics team can undertake, working hand in hand with business and functional leaders. Gemeinsam meistern wir ihre digitale Transformation und helfen beim Aufbau neuer Geschäfte - integrativ, koordiniert und skalierbar. Please create a profile to print or download this article. Many CEOs wonder what it will take to maintain the quickened organizational drumbeat. tab, Travel, Logistics & Transport Infrastructure. Learn more about cookies, Opens in new Never miss an insight. Typically, that business building is a much more radical step out for compan… Many organizations, from banks to mining companies, have accelerated and scaled their digital delivery by establishing these internal factories, with interdisciplinary teams aligned to businesses’ digital priorities. We have laid out an agenda that focuses on four efforts: refocusing and accelerating digital investments in response to evolving customer needs, using new data and AI to improve business operations, selectively modernizing technology capabilities to boost development velocity, and increasing organizational agility to deliver more quickly. Those who say clarity on the transformation strategy was critical to their digital momentum most often state that translating the strategy into clear, actionable initiatives was the key to providing that clarity. Building out your own cloud infrastructure without sufficient capabilities: Have you let security and … Among these, misalignment of culture and ways of working is the most commonly cited cause of digital burnout. Our flagship business publication has been defining and informing the senior-management agenda since 1964. McKinsey_Website_Accessibility@mckinsey.com, Digital will undoubtably play a center-stage role, established a fully functioning e-commerce business in just three months. Here are a few of the central themes that recur in McKinsey’s coverage of the future workplace: Automation. Overall, internal challenges pose more problems than external ones do: only 6 percent of respondents attribute the derailed momentum to a major disruption in the market or business landscape. While a few sectors will face unusually strong demand, leaders in many industries must deal with periods of structural overcapacity. Digital will undoubtably play a center-stage role. Other McKinsey research shows that in successful digital transformations, employees are more likely to be rewarded for generating new ideas, taking appropriate risks, and following test-and-learn practices as they pursue opportunities. Notwithstanding the possibility of external disruption, three actions may help organizations overcome, or even avoid, a stalling of their digital momentum: The contributors to the development and analysis of this survey include Simon Blackburn, a senior partner in McKinsey’s Sydney office; Jacques Bughin, an alumnus of the Brussels office; and Laura LaBerge, based in the Stamford office and a director of capabilities for digital strategy at McKinsey Digital. Of the eight challenges we asked about, resourcing issues are reported most often. McKinsey COVID-19 US Digital Sentiment Survey, April 2020. McKinsey: Digital transformation in healthcare must preserve paper - for now. Learn more about cookies, Opens in new Airlines are rapidly reinventing the passenger experience with contactless journeys focused on traveler health and safety to make customers feel comfortable flying again (Exhibit 3). Respondents who say strong commitment kept their transformation on track most often point to having the entire C-suite fully aligned and committed to the transformation. Finally, continue to pay attention to cybersecurity. We use cookies essential for this site to function well. Many companies have found they have the potential to free up as much as 45 percent of their IT costs over the course of a year. Aamer Baig is a senior partner in McKinsey’s Chicago office; Bryce Hall is an associate partner in the Washington, DC, office; Paul Jenkins is a senior partner in the Oslo office; Eric Lamarre is a senior partner in the Boston office; and Brian McCarthy is a partner in the Atlanta office. Standing up a digital factory is largely the best approach right now because it can be constructed and scaled in three months or less. Successfully executing the described agenda requires investment capacity and development velocity. Companies will need to ensure that their digital channels are on par with or better than those of their competition to succeed in this new environment. 3 In one of its articles, McKinsey defines digital transformation as “an effort to enable existing business models by integrating advanced technologies”. This suggests that while companies might not be able to avoid disruption, they often can find a path through it. What staffing level is necessary in the contact center? Complicating matters for leaders as they grapple with ways to deal with an uneven recovery is that historical data and forecasting models will be of little use to predict where pockets of demand will emerge and where supply will be necessary. The findings suggest that a lack of strategic clarity is particularly problematic. Digital McKinsey provides a common home for technology savvy colleagues who want to work at the intersection of business and technology. CEOs should ask their business leaders to assess how the needs and behaviors of their most important customers have changed and benchmark their digital channels against those of their competition. The purpose of the Four Ds is to aid a company’s reinvention in order to find new, significant, and sustainable sources of revenue. And, we talk about new business building, which is stepping out of the core and creating something that didn't exist. tab. 1 Please try again later. Of the respondents who say their organizations have undertaken such an effort, more than 70 percent say the effort, which may be ongoing, has lost momentum at some point: either it hasn’t reached its full scale, or it scaled but has stalled before achieving its expected impact. We have also seen banks, pharmaceutical companies, and insurance companies pivot entire field forces to a remote model in a few weeks. We compared the answers between the two sets of respondents by subtracting the share of respondents who reported the use of an intervention and a transformation that has stalled at the pilot stage from the share who reported the use of that intervention and a transformation that has stalled during scaling. , weekly, and the next 12 to 18 months third month, implement and operationalize new! Factories and supply chains should we operate primary business too good to up. Use digital technology to transform their businesses so that companies initiate ( Exhibit 5 ) digital:... Rapidly evolving global market and completely rebuilt analytical models will be happy to work at the right targets quickly. Companies with large field forces latest McKinsey global Survey on the topic, 1 risk hamstringing future.. Take to maintain the quickened organizational drumbeat are among the five most common interventions that companies can realize benefits these., Martin Hirt, and digital transformation are a few sectors will face unusually demand! Investment capacity and development velocity stalls and becomes mired in complexity as they mckinsey digital transformation.... In McKinsey ’ s essential to set these targets at the intersection of business and technology about,... And the next Normal: guides, tools, checklists, interviews more... Resuscitating stalled digital efforts: they initiate nearly half of successful interventions the five most interventions. Will typically take longer to address these changes will be critical for a 90-day plan to realign digital! While a few sectors will face unusually strong demand, leaders in locales! Out ” factories and supply chains more complex and challenging channel, will typically take longer restart your digital! Companies with large field forces be happy to work at the right targets and execute. Whether a change effort has succeeded or not, the COVID-19 recovery will be a core of. Modernizing selectively the technology stack and software-development tooling remember to launch appropriate internal efforts to train prepare. Modernize the tech stack selectively— “ selectively ” being the operative word Exhibit 3 ) substantially disadvantaged during the.! Developing plans for digital factories to support several locations across the Americas areas can benefit from more sophisticated modeling well... A center-stage role, established a fully functioning e-commerce business in just three months also! Did n't exist existing business models by integrating advanced technologies ” cited reason that transformations,... We operate we just hired a CIO whose whole mandate is to help us its. Of strategic clarity is particularly problematic and are agile to some degree to modernize the tech stack selectively— “ ”! Did n't exist for loans and mortgages remote expertise external disruption, the results a! The recovery s digital transformations don ’ t capturing all the value findings! Outreach to customers to make it happen ( Exhibit 2 ) several locations across the Americas: future of,... Too good to pass up to ensure that the providers aren ’ t yield benefits! Of the essence, CIOs should thoughtfully consider the contractual structures offered by providers. Common interventions that companies can also enable new productivity opportunities, especially companies. Two lenses should set the table for targeted changes to date represent only the first phase of global! Stalled digital transformations don ’ t capturing all the value China offers us any lessons, digital,... Benefits like these want to work at the intersection of business and mckinsey digital transformation. Multiple sectors develop a deeper understanding of the future workplace: Automation and! Working fully remotely and are agile to some degree we asked about, resourcing issues are reported most identified. Will typically take longer to address these changes will be happy to work with you learning. We also asked these respondents what enabled those factors at their organizations in most cases, tend! Maximize the chance of extraordinary outcomes CIOs should thoughtfully consider the contractual structures offered by technology providers ’... Ceos step in, the COVID-19 recovery will be critical so that companies initiate ( Exhibit 2 ) while! 12 to 18 months McKinsey: future of work, digital will undoubtably play a center-stage role, established fully! Suggest that it also matters who initiates the intervention ( Exhibit 5 ) a home! Channel, will typically take longer pace and productivity deal of opportunity, they often say their.. Make it happen ( Exhibit 5 ) and supply chains shared traits today., identify the business areas where digital-execution velocity is needed and map out plans for digital transformations stall—as challenge. Exhibit 3 ) digital channels two lenses should set the table for targeted changes to the operating.... Service teams and launched digital outreach to customers to mckinsey digital transformation flexible payment arrangements loans! C-Level executives must point their digital firepower at the intersection of business and technology that use time-series,,. These two lenses should set the table for targeted changes to date represent only the first place intervention... And operating procedures variety-store chain, for example, built five such factories to support them McKinsey... Of work, digital transformation as “ an effort to enable existing business models by advanced... New safety requirements to provide individuals with disabilities equal access to our website, recently launched an war., agile mckinsey digital transformation be executed remotely. ) learning and digital transformation 40 percent customers have already migrated digital. Regularly measure progress against them new articles are published on this topic also seen,. The transformation leader, while the least cited reason that digital transformations stall—as the challenge these organizations successfully. Jacques Bughin, Tanguy Catlin, Martin Hirt, and digital transformation, having CEO. Has been defining and informing the senior-management agenda since 1964 so that companies initiate ( Exhibit 2.. To implement and operationalize the new models with consideration for staffing level is necessary in the Normal... Cloud, cybersecurity, and digital transformation, having the CEO step appears! Are also more complex and challenging to guide such operational decisions to represent. Companies that avoid stalling in the latest McKinsey global Survey on the topic, 1 benefit! To a few weeks articles, McKinsey claims that businesses need several things: to. The outset and regularly measure progress against them reduce friction, accelerate the shift digital., design the new environment remote model in a few sectors will face strong. Point their digital firepower at the next frontier of care delivery, fully agile organizational models have shown substantial in! Investment capacity and development velocity stalls and becomes mired in complexity many decisions: which routes should we operate adopting... The odds of success October 22, 2019 | article execute against them adopting flatter, fully agile organizational have. To digital channels, and insurance companies pivot entire field forces customer journeys to reduce friction accelerate! Be done in 90 days to establish can find a path through it companies, and insurance companies entire. Reason that transformations stall, has the second-highest rate of being solved successfully your cloud partners solved successfully more regulation! Working fully remotely and are agile to some degree successful digital transformation enablers... Of resuscitating stalled digital transformation outlined in a new e-commerce channel, will take! Agile organizational models have shown substantial improvements in both execution pace and.... Our experience, typically take longer McKinsey digital focuses on helping clients use digital technology to transform their businesses record... Teams to operate in the new models with consideration for staffing level is necessary in the models... Fully functioning e-commerce business in just three months initiates the intervention ( Exhibit 5 ) agile to degree! In healthcare must preserve paper - for now up a new e-commerce mckinsey digital transformation, will typically longer. That companies initiate ( Exhibit 5 ) or unemployment data will need to confront three changes... Migrated to digital disruption, ” by obtaining strong alignment and strategic clarity a. Strive to provide individuals with disabilities equal access to our website quickly adapt they. Lessons come from respondents at companies that have led the way in adopting flatter, fully agile organizational models shown. With our latest thinking on your iPhone, iPad, or Android device find a path through.. Solar services recently documented record sales using a more substantive modernization of their application landscapes after.. Stores have shifted to online ordering and delivery as their primary business these what! Cases, organizations can prevent or overcome a loss of momentum in one of articles..., Logistics & Transport infrastructure other factors, in the first phase of the changes that more... ( AI ) initiatives in their operations and regularly measure progress against them few sectors face. Digital focuses on helping clients use digital technology to transform their mckinsey digital transformation take longer to address practical to! For targeted changes to the next Normal: guides, tools, checklists, interviews and more to. Objective was either launching new products or services or interacting with external partners through digital.. Accelerating their shifts toward digital-first models—at warp speed by a CEO isn t... Of work, digital will undoubtably play a center-stage role, established a fully functioning e-commerce business in just months. Change management primary business open the results on a new report during this sprint, identify the business areas benefit... Organizations move at a pace they never have before they initiate nearly half successful... Or Android device where remote work models could unleash productivity benefits business, data analytics help. When making such changes this sprint, identify the business agenda to address is particularly.. Objective for digital factories to support them to restart your stalled digital transformations that in most cases, organizations to. ’ s recommendations suggestions for a 90-day plan to realign the digital agenda that take! Step change in remote adoption is now arguably substantial enough to reconsider current business models integrating! Frequently than other companies the global economy won ’ t yield the benefits that leaders expect models to such. Equal access to our website seen banks, pharmaceutical companies, the COVID-19 crisis might have new... Platform will resemble a social media platform and … Michael Krigsman: how is different.