Here is a brief excerpt from an article written by Jacques Bughin, Tanguy Catlin, and Laura LaBerge for the McKinsey Quarterly, published by McKinsey & Company. To read the complete article, check out other resources, learn more about the firm, obtain subscription information, and register to receive email alerts, please click here.
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Most executives we know have a powerful, intuitive feel for the rhythm of their businesses. They know how hard and fast to pull strategic levers, move their organization, and drive execution to achieve their objectives. Or at least they did.Digitization has intensified the rhythm of competition in many industries, leaving executives adrift, with information-gathering systems that are too slow or disconnected, direction-setting approaches that are too timid, and talent-management norms that are misaligned and incremental.These leaders know their companies must adjust and accelerate. Digital is putting pressure on profit pools as it transfers an increasing share of value to consumers. Furthermore, those profit pools are bleeding across traditional industry lines as advanced technologies enable companies to forge into adjacencies, changing who in the value chain is making money, what share of the pie they capture, and how. The slow and inefficient are left behind, competing for scraps.What is unclear to these executives, however, is how much and how fast to adapt their business rhythms. The exhortation to “change at the speed of digital” generates more anxiety than answers. We have recently completed some research that provides clear guidance: digital leaders appear to keep up a drumbeat in their businesses that can be four times faster, and twice as powerful, as those of their peers.In earlier studies, we identified 11 strategic and operational practices that are tightly correlated with the successful execution of digital efforts. More recently, we asked more than 1,500 executives how frequently their companies carry out these 11 practices. The responses of the best-performing companies—those in the top decile for organic revenue growth—suggest that the accelerated repetition of certain critical practices is closely associated with adaptive cultures that are comfortable with change, learning all the time, and swiftly responsive (Exhibit 1).These practices fall into two different categories. One is a set of actions that a company must take continuously (monthly, or even weekly) to increase the pulse of the organization. The other is a set of activities done intermittently (often quarterly) and involves taking a step back to review all that the company has learned, as well as making powerful adjustments or realignments accordingly (see sidebar, “Faster and harder: Behind the numbers”).* * *
Jacques Bughin is a director of the McKinsey Global Institute and a senior partner in McKinsey’s Brussels office, Tanguy Catlin is a senior partner in the Boston office, and Laura LaBerge is a senior expert in the Stamford office.
