- Just 7% of large companies have digitally savvy executive teams, according to research published Wednesday by MIT Sloan Management Review. The authors of the study define digital savviness as "an understanding, developed through experience and education, of the impact that emerging technologies will have on a business's success over the next decade."
- A review of nearly 2,000 companies found that organizations with digitally savvy leaders outperformed peers on revenue growth and valuation by over 48%.
- CTOs and CIOs top the list of digital experts in the C-suite, with 47% of CTOs and 45% of CIOs having digital know-how. Just 23% of CEOs are considered digitally savvy.
Businesses will become irrelevant if decision-makers are unaware of how technology fits into their strategy — a lesson learned by Blockbuster and Kodak. Competition, soon, will outpace laggards through innovation and slimmer operating costs.
Without a digitally savvy top leadership team, businesses will struggle to use digital tools in a strategic way, said Stephanie Woerner, research scientist at the MIT Sloan Center for Information Systems Research and coauthor of the study.
"There's a real pressure to become future ready," said Woerner. "These firms need to become ambidextrous, innovating and taking costs out."
Appointing leadership figures tied closer to innovation to the CEO seat is a frequent move, in the tech realm especially. In February, Amazon tapped AWS CEO Andy Jassey as its future CEO, taking over for Jeff Bezos following his retirement in the third quarter of 2021. Microsoft CEO Satya Nadella, appointed in 2014, nabbed the top leadership spot after serving as EVP of the company's cloud and enterprise group.
Expect the trend of CIOs escalating to the CEO role to continue, said Woerner, as well as the addition of CIOs to the leadership board and partnerships between CIOs and other C-suite leaders to support digital strategies.
A partnership between a CIO and the CFO, for example, means the CIO "has a partner with someone that knows what technology can do for the firm, and rather than acting as a gatekeeper on the finances is actually thinking about 'How do we use our investment dollars wisely?"'
The pandemic drove forward the criticality of having leaders with digital skills, a clear business mandate prior to the crisis.
"What the pandemic did was, all of a sudden, smash right in front of you this idea that we've got to change the way that we do business," said Woerner. "A lot of companies had made a start on this, but many of them were really quite surprised by it all, and found that they were having to make significant changes in months rather than years."
But having a tech-informed perspective of the business isn't solely a C-suite responsibility. Leaders "should also be thinking about people below and how they're going to tap them, and what are the exciting things that they can do with those people," Woerner said.