Leading Digital_ Turning Technology into Business Transformation ( PDFDrive )

What Is Digital Mastery? 17
capabilities, excess prudence prevents these firms from building strong
digital capabilities. Unconcerned about technology fashion, the
Âcompanies focus on ensuring that every digital investment is carefully
considered and strongly coordinated. Leaders in these companies
don’t want to make mistakes that would waste their scarce time, effort,
and money. This caution can be useful, especially in highly regulated
industries such as health care and financial services. But it can also
create a governance trap that focuses more on controls and rules than
making progress. By focusing on control and certainty, Conservatives
find it hard to mobilize top management—and the rest of the organization—to
see the bigger prize that digital transformation can bring.
In trying to prevent failure, these companies fail to make much progress
at all.
DIGITAL MASTERY MATTERS
Digital Masters have overcome the difficulties that challenge their
competitors. They know how and where to invest, and their leaders are
committed to guiding the company powerfully into the digital future.
They are already exploiting their digital advantage to build superior
competitive positions in their industries.
To quantify the digital advantage, we conducted a survey of
391 companies in thirty countries. 17 We limited the survey to large
Âcompanies only—those with revenues of $500 million or higher. We
used statistical methods on specific questions in the survey to construct
factors representing subcomponents of the two dimensions of digital
mastery, to cluster the component factors, and then to make the two
dimensions as statistically independent of each other as possible. Then,
we split the sample at the median on each dimension to place each
company into one of the four categories, with each category containing
approximately 25 percent of the firms.
Next, we analyzed the financials of the 184 publicly traded firms in
our sample. We mean-adjusted the performance of each firm by subtracting
the average performance of all firms in its industry that were