Here is an excerpt from an article written by Didier Bonnet and George Westerman for Harvard Business Review and the HBR Blog Network. To read the complete article, check out the wealth of free resources, obtain subscription information, and receive HBR email alerts, please click here.
Digital technology is the biggest agitator of the business world today. Mobile technology, social media, cloud computing, embedded devices, big data, and analytics have radically changed the nature of work and competition. And digital innovations will continue to do so for the foreseeable future. Technology has tremendous potential to be the engine of increasing human, organizational, and economic prosperity.

However, digital technology is not the true story. Digital transformation is. Fulfilling technology’s potential will require leaders to recreate the way their institutions operate in a world of digital ubiquity. Leaders need to engage their people in a process of redefining how they work and what their companies do. Digital transformation is therefore the key managerial imperative for today’s business leaders.

So, are large corporations – or, more specifically, the leaders of those firms – ready to face the challenge? Or as Richard Straub of the Peter Drucker Society of Europe puts the question, “are managers equipped – in terms of skills, competencies and courage – to lead us toward the Great Transformation?”

Our research shows that some companies are ready, but they are in the minority. Over the past four years we have studied more than 400 large global firms around the world. We’ve talked with their executives and examined their performance. We’ve worked to understand how they approach all things digital, and what they have achieved. Our overarching conclusion is that, while many companies undertake digital initiatives, most do not manage to bring about transformative change.

There are, however, some inspiring exceptions. The companies we call “Digital Masters” are different. They use digital technology to drive significantly higher profit, productivity, and customer benefits. They take advantage of the transformative potential of digital technology to radically redesign how their organizations operate and compete.

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Here is a direct link to the complete article.

Dr. Didier Bonnet is a Senior Vice-President and Global Practice Leader at Capgemini Consulting, and co-author of Leading Digital: Turning Technology into Business Transformation, published by HBR Press. You can follow him on Twitter at @didiebon.

George Westerman (@gwesterman) is a research scientist in MIT’s Initiative on the Digital Economy. He is co-author of em>Leading Digital: Turning Technology into Business Transformation and other publications that help executives make sense of technology leadership challenges.