McKinsey & Company

Leadership in the Digital Age
CONFIDENTIAL AND PROPRIETARY
Any use of this material without specific permission of McKinsey & Company is strictly prohibited
Leadership in the Social Era
Liz Ericson
Associate Principal
McKinsey
Katie Carroll
Sr. Editor, Social Media EMEA
LinkedIn

Leadership in the Digital Age
CONFIDENTIAL AND PROPRIETARY
Any use of this material without specific permission of McKinsey & Company is strictly prohibited
Liz Ericson
LinkedIn Talent Connect | 21 October 2015

McKinsey & Company
Standing out
Common truths
Your questions
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Digital
strategy
is not the target
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Customer expectations
are industry agnostic
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Digital
is (still) all
about the
physical stuff
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Data
is only as
good as the
decisions
you make
as a result
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Agility
is the true
killer app
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Standing out
Common truths
Your questions
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Digital and disruption are not
someone else's
problem
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Most transformations fail
because of people
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Leaders need to
know the
right
questions
to ask
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Success is not
guaranteed
but there are
things to
look out
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Linked to business
strategy
Bold, long-term
orientation
Centered around
customer needs
Strategy
Digital Quotient assesses organisations’ digital maturity
Risk appetite
Test and learn
Speed / Agility
Internal collaboration
External
orientation
Culture
Connectivity
Automation
Data-driven decision-
making
Content and digital
marketing
Customer experience
IT architecture
CapabilitiesOrganization
Roles and
responsibilities
Talent and leadership
Digital investment
Governance / KPIs

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Not all DQ leaders are great at everything
The “Digital Souls” (23%)
The “Super Stars” (46%)
Higher than average score
against the majority of
management practices
The “Digital Hands” (31%)
Terrific culture overcoming
weak digital capabilities
Terrific capabilities
overcoming weak external
orientation – To be confirmed
as dataset increases
Culture CapabilitiesOrganizationStrategy
32
64
60
36Total DQ™ dataset average
74
40
83
67
59
34
58
28
73
35
69
69
Note: Digital leaders defined as DQ score equal to or above 50. N=13 for digital leaders, N= 147 for dataset average

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Strategy: Digital leaders’ strategies are more ambitious, targeted
and integrated
Companies with a high DQ™ score are…
SOURCE: McKinsey Digital Quotient dataset
more likely to have a well-defined mobile strategy6x
4x more likely to have fully integrated digital
initiatives in the strategic planning process
more likely to develop comprehensive digital
initiatives that address the most important threats
and opportunities to position them as digital leaders
in their industry
7x
5x
more likely to have defined their digital strategy
based on a granular understanding of customer
needs at each stage of the CDJ

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Culture: Digital leaders rally behind bold, calibrated
opportunities and move fast to turn them into reality
Companies with a high DQ™ score are…
more likely to nurture a culture of trust and
mutual accountability6x
4x more likely to take bold risks to transform
their customer experience
2x more likely to rely on external partners to
build new products and services
more likely to run strategy by experimentation8x
SOURCE: McKinsey Digital Quotient dataset

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Organisation: Digital leaders are built to support long-term
digital efforts
Companies with a high DQ™ score are…
SOURCE: McKinsey Digital Quotient dataset
6x more likely to have clear distribution of roles
and responsibilities for digital
more likely to measure ROI of digital
initiatives beyond digital marketing6x
6x more likely to have transparency and
alignment on priority digital initiatives
more likely to have an effective recruitment
process for digital talent10x

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Capabilities: Differentiation between digital leaders and average
is weaker for the Capabilities dimension
Companies with a high DQ™ score are…
SOURCE: McKinsey Digital Quotient dataset
7x more likely to have made digital one of the top
priorities for IT investment
6x
more likely to understand and answer
customer needs when it comes to
online/mobile customer service
24/7

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Capabilities dimension concentrates the “universal headaches”
that all companies are trying to figure out
 Low level of personalization and connectivity across-channels, driven in part
by data challenges - less than 5% of companies have a fully integrated view of
internal and external customer data and can turn collected data into
breakthrough insights
 Constraints from legacy IT architecture – less than 7% of companies have a
modern and flexible IT architecture that can support all digital initiatives
 Limited automation for purposes non directly related to customer service – less
than 3% of companies use digital technology to manage employee performance
and capacity and/or to share, coordinate and streamline work
DIGITAL LEADERS DO NOT PARTICULARLY STAND-OUT ON THESE DIMENSIONS
SOURCE: McKinsey Digital Quotient dataset

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This is a journey
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Standing out
Common truths
Your questions
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Thank you
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