As they strive to achieve successful transformation, companies may be misleading themselves by assuming that adopting new technologies is the ultimate end goal. New research from MIT Technology Review Insights stresses that adopting new tech for its own sake does not set the organization up to continue to adapt to changing circumstances.
Accomplishing a more holistic evolution of the organization should be the greater goal. Yet the firm’s new survey, produced in partnership with Thoughtworks, finds that transformation is still synonymous with tech for most, with 70 percent planning a new technology adoption in the next year, but only 41 percent pursuing changes to their business model.
The new report Evolutionary Organizations Reimagine the Future, explores how organizations approach transformation and the obstacles they encounter in adapting to a continually changing business and technology environment.
Additional findings are as follows:
The business environment is changing faster than many leaders think
Most survey respondents (81 percent) believe their organization is more adaptable than average and nearly all (89 percent) say that they’re keeping up with or ahead of their competitors—suggesting a wide gap between the rapidly evolving reality and executives’ perceptions of their preparedness.
All organizations must build capabilities for continuous reinvention
The only way to keep up is for organizations to continually change and evolve, but most traditional businesses lack the strategic flexibility necessary to do this. Nearly half of business leaders outside the C-suite (44 percent), for example, say organizational structure, silos, or hierarchy are the number-one obstacle to transformation at their firm.
Focusing on customer value and empowering employees are keys to organizational evolution
The most successful transformations prioritize creating customer value and enhancing customer and employee experience. Meeting evolving customer needs is the constant source of value in a world where everything is changing. However, many traditional organizations fail to take this long view, with only 15 percent of respondents most concerned about failing to meet customer expectations if they fail to transform.
Rapid experimentation requires the mindset to accept failure and the ability to recover quickly
Organizations agree that iterative, experimental processes are essential to finding the right solutions, with 81 percent saying they have adopted agile practices. Fewer are confident, however, in their ability to execute decisions quickly (76 percent)—or to shut down initiatives that aren’t working (60 percent).
Evolutionary organizations will succeed in the future
Companies that develop the capability to repeatedly reinvent what they do—not just the technology they use to do it—will be most prepared to respond to future disruptive technologies, market ecosystem changes, and societal shifts. When adaptive structures and mindsets are woven into strategies and operating models, organizational value is created and extends beyond that of a single digital transformation initiative.
“Successful transformation requires more than just adopting new technology—it demands a focus on building an organization’s capability for continual evolution,” said Laurel Ruma, global director of custom content for MIT Technology Review, in a news release. “Enterprises that develop the ability to repeatedly reinvent themselves will be the ones to succeed in the future.”
“Transformation suggests there’s a beginning and an end. Yet this research shows that organizations must constantly evolve and adapt to changing market dynamics and customer needs,” said Marcelo De Santis, chief digital officer at Thoughtworks, in the release. “For the modern digital business, transformation is a continuous series of ‘experiments’ in pursuit of building an ‘evolutionary mindset’ organically throughout all levels of the organization—one shift at a time.”
The report draws on a survey of 275 executives and business leaders along with in-depth interviews with digital transformation, business strategy, and emerging technology experts from organizations including Prudential Financial, PEXA, and INSEAD.