Digital issues have gone from a sideshow to a key topic, says PwC's Greg Doone. Photo / Nick Reed
Leaders with digital smarts are driving businesses that run faster than their not-so-switched-on peers.
An international survey of companies by PwC found a link between having a well-developed digital strategy and rapid growth in revenue and profit.
For nearly 10 years, PwC has asked what it takes for leaders to ensure their digital investments deliver and sustain value.
This year the PwC survey identified 10 critical attributes connected with stronger financial performance.
It says the top performers are more deliberate in their digital strategy, innovation and execution.
"They are more likely to have CEO commitment, strategic clarity and shared understanding.
"They are more apt to take a broad view when applying technology and identifying sources of innovation.
"And they are more prone to being skilled at turning their data into insight, proactive in cyber-security and consistent in measuring outcomes from digital investments," the report says.
Local PwC digital strategy and data leader Greg Doone says that by tying the digital investment behaviour to a company's financial fortunes, the survey is able to draw correlations and guide companies on where investments have been effective and the key factors that contribute to that success.
"It's unashamedly been based on trying to understand where people are making better bets in a rapidly changing world and which ones are paying off."
The most fundamental change since the survey began in 2007, Doone says, is the elevation of digital to become central to business strategy at the executive or board level, rather than being stuck within the marketing or IT team.
"Effectively it's gone from a sideshow to one of the main topics of executives," he says.
And those that have digital integrated into high-level strategy are always the leaders of the pack, Doone adds.
It's not about your strategy, he says, it's about having a business strategy for the digital age.
"Whilst that sounds like a clever play on words, it's a very fundamental mindset shift of an organisation and it's about how our business adapts to the new digital world, which is much more than technology."
The "winners" intrinsically understand that technology has triggered a significant change in consumer and employee behaviour, he says.
Understanding those changes is key to a successful strategy, rather than focusing on the latest hot new technology, Doone says.
Of the 10 key attributes that drive stronger performance, Doone says the report's data on New Zealand revealed six areas of weakness, significant change or differences unique to the local market. New Zealand chief executives and boards are enthusiastically embracing technology, but Doone says that too often the strategy is not right.
He says many businesses are running with a strategy written back in 2009, with sensible aspirations about mobility and different digital channels, which were never implemented because it was written by someone well down the organisational hierarchy.
"We probably still see maybe a third to a half of New Zealand organisations are still trying to look at digital strategy at that level and the first thing that we'll do is say 'you won't succeed if that's what you want to achieve'."
Achieving success hinges on ensuring that digital is embedded in your high-level organisational strategy, he says.
One of the strong trends - locally as well as internationally - is that digital disruption is top of mind for CEOs, but it's not where they are focusing digital dollars.
Only 1 per cent of those in the global survey expected their digital investment to result in disruption of their own or other industries.
Doone says many businesses are pinning their hopes on attracting a digital superstar into management to lead the way.
"Certainly, most boards would give you a wry smile if I said they've talked about going and finding the guy from Google who will come and sit on their exec team and change their business.
"Those success stories are few and far between.
"What we do see is the digital mavericks who've grown up within the business and created great success."
Rather than bringing in someone from outside, often a couple of key people can have more impact if they are given the freedom to run lean and agile projects.
Doone says an example used in the New Zealand report is BNZ's success with an app development that has flowed through into the wider business.
"That was more about giving existing talent the space and the platform than necessarily finding some Steve Jobs-esque Google or Apple character to come in.
"I'm not suggesting that that fails, I'm suggesting that it hasn't proven to be the silver bullet that some businesses hoped it would be."
Some findings from the PwC survey
•Our CEO is champion for digital
Global: 73 per cent per cent
New Zealand: 74 per cent
•The executives responsible for digital are involved in setting high-level business strategy
Global: 77 per cent
New Zealand: 68 per cent
•Business and digital strategy are well communicated enterprise-wide
Global: 69 per cent
New Zealand: 76 per cent
•We actively engage with external sources to gather new ideas for applying emerging technologies
Global: 64 per cent
New Zealand: 78 per cent
•We consistently measure outcomes from our digital technology investments
Global: 72 per cent
New Zealand: 82 per cent