Since the seemingly overnight emergence of ChatGPT, businesses everywhere have been buzzing about generative AI’s impact, particularly on process efficiency and workforce productivity. While the benefits in those areas are indeed transformational, we’ve been struck by how consumers and their perceptions and experience of AI have been largely sidelined in the conversation. Similarly, we see immense opportunities for GenAI to unlock growth, a frontier of AI transformation many businesses haven’t yet reached. 

That’s why we’re launching a study to explore: 

• What are consumers doing with GenAI today, and why?  
• How will GenAI affect them?     
• What are their plans for the future? 

The “tl;dr” on Our Initial Findings  

While the quantitative research is still underway, we wanted to share initial findings from our qualitative sessions because we think the implications are potentially profound. Specifically, we see clear evidence of the rise of AI-powered consumers who are moving faster, doing more and expecting more in terms of fast, frictionless and individualized offerings. They seem increasingly ready to turn over more of their lives to AI, are watching brands’ commitments to ethical AI, and are deeply invested in finding even more ways to benefit from it.  

Thus, firms looking to spark sustainable and transformative growth with GenAI will likely need to accelerate their plans to get ahead of – or even keep up with – the most creative-minded early adopters and power-users. That’s especially true for firms in retail, CPG, hospitality, financial services and healthcare, which are in the vanguard of GenAI adoption. We hope the insights in this article help you connect the dots between your AI strategies and the emergence of the AI-powered consumer.  

What Consumers Are Telling Us 

As is always the case with new technology, consumers have diverse views about GenAI. There are power users actively adopting GenAI across many facets of their personal and professional lives and more passive and cautious adopters. Tinkering is the norm for many in the middle. Each of these groups exhibits different uptake and usage patterns. There is also considerable nuance in their attitudes toward AI ethics and responsible adoption by businesses.  

Despite these distinctions, the initial phases of our research yielded evidence of five meaningful patterns in consumer adoption of AI.  

1. All Types of Consumers Are Moving Surprisingly Fast  

Conventional wisdom says that businesses are leading the way on AI, but our research shows that consumers are moving faster than many companies realize. When talking to us about AI, consumers used their own terms and definitions. They clearly see the value of the apps and tools they use and do not feel overwhelmed by AI’s complexity. That’s true of even the slower and more cautious adopters. Natural language processing – and voice integration – are of great interest to all types of users, because they make GenAI tools feel more accessible than the digital tools and platforms of the past.   

• What consumers say: “With AI, I don’t have to go down the rabbit hole of Googling my ailments but can have a conversation. It says, ‘it could be this’ and I say, ‘no, it’s not that.’ That’s better than having to read and read. AI scans for me and has a conversation,” said a somewhat frequent 60-year-old user.  
• So what: Because consumers are moving fast, there is urgency to identify new ways to engage with AI-enabled experiences that map to consumer needs and preferences. 
• Who’s doing it right: Colgate-Palmolive is leveraging AI to improve consumer experiences across the journey – from enhancing search with AI, to personalizing creative, to rapidly prototyping and testing product innovations.   

Consumers are using generative AI tools before, during and after purchases.

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2. Beyond Personal Productivity, Consumers Prioritize Creativity, Fun and Inspiration

Productivity is a big part of AI’s attraction. But our research shows that inspiration, shopping and fun are other major motivations to use GenAI. One consumer told us about how he enjoys creating AI images on his phone and sharing them with friends.  

• What consumers say: “When I’m on the bus, I will click over to [an AI image generator] and put in some words and just play around for 15-30 minutes,” said an occasional 30-year-old user.  
• So what: For businesses, creative AI-driven marketing activations and experiences can boost engagement by creating joy and delight.  
• Who’s doing it right: Warner Bros.’ Barbie AI Selfie Generator allowed users to design their own unique Barbie. Reaching 13 million users in just a few months, the generator was a hallmark of Barbie’s world-class marketing campaign.  

3. Consumers Have Strikingly Specific AI Aspirations

That old paradigm “if I had asked my customers what they wanted, they would have said a faster horse” may be less applicable as modern consumers become more tech savvy and have easy access to powerful tools. Consumers don’t necessarily grasp the technical fine points or legal guardrails about AI; but they are pretty clear about the experience they want.   

• What consumers say: “If I could enter what I want to eat and if my fridge could use AI to analyze the ingredients I have, what I need from the shop, and then build a shopping cart I can review and order, that would be great,” said a somewhat frequent 65-year-old user.  
• So what: Because consumers are imagining new ways to use AI, they can help imagine and co-create breakthrough applications as part of clearly defined innovation processes.  
• Who’s doing it well: Coca-Cola’s Creations platform provides a space to engage consumers and capture their input for new product innovations. The Y3000 Flavor of the Future was created by leveraging consumer insight and the power of AI to drive engagement with Gen Z, the brand’s growth target.  

4. In the Eyes of Consumers, ChatGPT is Only the Beginning

The first killer app of the GenAI age, ChatGPT is incredibly powerful for consumers and among the most popular and frequently used apps. But consumers hope to use many other applications in the future, largely because they see the limits of ChatGPT; as one consumer told us, “It only takes me so far.” In fact, they are looking for more nuanced, bespoke answers to the questions they need. 

• What consumers say: “I’ve tried things like ChatGPT for trip itinerary planning. It’s helpful but doesn’t get that detailed. If I want to know details like the safest place to walk around as a woman, it can’t give me that yet,” said a high-frequency, 23-year-old user. 
• So what: Consumers want more precision, meaning businesses can develop bespoke solutions based on proprietary data and look to deliver on unique brand promises. Build, buy and partner – depending on the use case, each of those approaches can be viable.  
• Who’s doing it well: Via a partnership with OpenAI, KAYAK used its historical travel database to train GPT-4, the large language model. The goal is to help users find travel experiences meeting their precise needs.  

5. Consumers Are Paying Attention to How Businesses Talk About AI 

Consumers told us they want to hear about AI, but within preferred contexts and applications. If an experience is piloting or experimenting with AI, consumers appreciate a call out that it’s AI, and that it’s “still learning.”  

Some consumers are annoyed by “overly promotional” language about AI; they are looking for authenticity and transparency instead. We also heard about the importance of brands communicating their commitments to use AI in ways that align to the organizational purpose and values – clear evidence of consumer interest in AI ethics.  

• What consumers say: “I’m thinking about what brand do I want to support with AI? Who is investing and being thoughtful in terms of protection and checks? And which firms are brazenly advancing and not so worried about protection?” said a high-frequency 23-year-old user. 
• So what: Because consumers are paying attention, brands should be deliberate in crafting intentional, authentic messaging around AI, presenting it in the moments that matter. The focus should be on explaining brand intentions and providing helpful and transparent guidance. For more ways Marketers can use AI, see our Four Ways to Maximize Value  
• Who’s doing it well: S&P Global is taking a holistic approach in positioning its brand for the age of AI. It’s developing an AI brand narrative linked to its company purpose, designed to resonate across its wide array of audiences. From there, it’s integrating clear, consistent messaging across all of its brand communications and experiences that stem from that positioning. 

Ethics Matter on the Road Ahead 

Discussions of AI are incomplete without mentioning ethics. And, according to our research, all types of users – from cautious adopters to more pragmatic users – have AI ethics on their mind. The common theme is that ethics and brand intentions matter, though they will influence decisions differently in different contexts and for different users. Consumers aren’t just blindly adopting every GenAI app; rather, they are thoughtfully considering and – in the case of power users – calculating where they want to spend their time and engagement. 

Imagine a world where multiple AIs work in the background to find bargains, negotiate better prices for consumers, and make smart purchase decisions. Or where personal assistants connect accounts and act on consumers’ behalf across financial services, healthcare and other sectors, particularly with those companies that have cultivated trust with their AI deployments.  

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In this year’s State of Digital Transformation report, we set out to identify the key differences between the businesses that are succeeding at digital transformation, and those that are still struggling. We surveyed over 600 executives from North America, Europe and Asia across a range of industries to highlight not only their current digital capabilities but the key investments and choices they made that got them to where they are today. By separating the responses of high performers and average performers, we identified key characteristics of companies that successfully met their transformation goals. 

This report serves as a benchmark for what digital maturity looks like in 2023 and charts a path forward for businesses that are looking to drive growth and thrive in the next wave of digital transformation initiatives. 

Key Takeaways:

• The majority of companies (45%) chose business growth as their top goal for digital transformation, followed by innovation (45%) and efficiency (42%). 
• Top-performing companies tracked metrics like innovation (36%) and digital literacy (32%) to measure digital transformation success, while average performers tracked business performance (42%) and efficiency (40%). 
• Limited budgets (34%) and a resistant culture (27%) were the top obstacles to digital transformation success. 
• Despite challenging economic times, 42% of digitally mature companies were accelerating their digital transformation efforts this year. 
• Top-performing companies were more likely to have their digital transformation led by the CEO (33%), compared to average performers where the CIO or CTO (36%) were more likely to be in charge. 
• The top transformation priorities for companies were upgrading technology (50%), achieving operational efficiency (34%) and getting more value from data (32%) 

Summary

Chan Suh, chief digital officer at Prophet, says that technology-led digital transformations often fall short of the intended impact. Instead, it should be steered by a purpose-led mission. At Prophet, we pull together our range of capabilities and expertise to help our clients transform from within. Learn more about Prophet’s approach to digital transformation in this blog.

Digital Transformation at Prophet

Prophet is a convergence accelerator and purpose-led transformation consultancy that will help you reimagine your firm, integrate and scale digital investments and drive real, defensible growth. We believe that to accelerate convergence we take your existing assets – such as data, brand, culture, business models – reimagine them for today’s customers and employees and look for new ways to integrate capabilities and talent with a reimagined sense of purpose. Then, we drive towards scale.

Get in touch today if you’d like to learn how to bring digital convergence moves to grow your organization.

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Summary

Chan Suh, chief digital officer at Prophet, shares how the firm’s heritage in branding has positioned our teams to tackle digital transformation challenges in today’s dynamic market. We blend science and art; technology and human understanding. Learn more about Prophet’s holistic and human-centered approach to transformation. For more on digital convergence, check out this blog.

Digital Transformation at Prophet

Prophet is a convergence accelerator and purpose-led transformation consultancy that will help you reimagine your firm, integrate and scale digital investments, and drive real, defensible growth. We believe that to accelerate convergence we take your existing assets – such as data, brand, culture, business models – reimagine them for today’s customers and employees and look for new ways to integrate capabilities and talent with a reimagined sense of purpose. Then, we drive towards scale.

Get in touch today if you’d like to learn how to bring digital convergence moves to grow your organization.

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Summary

Chan Suh, chief digital officer at Prophet, explains how technology has enabled businesses to grow better. However, the businesses that grow best are those that embrace the concept of digital convergence – the approach of orchestrating digital transformation efforts around a singular purpose that has been reimagined for today’s customers and employees. Watch this video to find out what digital convergence looks and – even sounds – like. For more, read this blog post. 

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“Never let a good crisis go to waste” may be old advice, but it feels timelier than ever. While businesses are still struggling to distill the ongoing lessons of the pandemic, they now see inflation, interest rate hikes and an ongoing war pushing the economy closer to recession. If that wasn’t enough, supply chain issues continue to disrupt and consumer confidence is fading. 

Companies are also challenged as they try to figure out if we are in the great resignation or the great retirement, and what that all might mean for the great hybrid experiment.  

A new norm has emerged: The only true business constant is continuous business disruption. 

Predictably, many businesses are already fearful, cutting budgets, freezing new hires and even laying off staff.  We are seeing this in our clients. Governments are getting involved in companies’ marketing spend. And chief sustainability officers wonder how best to pay for the commitments they’ve made over the past two years. 

All these issues are real and complex, and in some ways, it’s good to be on high alert. But businesses have a choice in how they respond, as they did in the economic crises of 2001, 2008 or 2020.   

Each downturn has produced new economies that did not exist before, from e-commerce to the sharing economy to the experience economy to the world of subscriptions and crypto. There’s a long list of companies that have been created by these downturns including Netflix, Uber, Airbnb, AbbVie, Spotify, Instagram, Bitcoin and Ethereum. Others, such as Samsung, GM, Microsoft, Amazon, Google and Bank of America have been reimagined in ways that would be hard “to imagine” before these downturns. 

So, instead of talking about crises, cutbacks and retrenching, we are choosing to use words like resiliency, durability, agility and radical innovation, as we guide clients through this latest challenge. We know growth can’t happen amidst panicky cost-cutting or short-sighted pivots. 

No one enjoys downturns. But we can see how our clients in the past have channeled anxiety into strength and resiliency. They evolve. They make intelligent choices and emerge stronger than the competition. This is a moment to leapfrog and discover ways to accelerate, creating an opportunity to differentiate companies from competitors and create net-new businesses and categories, customer experiences and offerings. 

To this end, here are five ways we are advising clients as they strive to build their own versions of relentless resiliency. 

Accelerate Purposeful Leadership 

In the last two years, purpose-driven companies have become the norm. COVID-19 triggered an unprecedented number of companies to go out, find their North Star and align to a higher-order purpose. These past few years have shown leaders that doing good in the world, doing right by employees and customers and making money can all work in concert. Now is not the time to throw all of that goodwill and equity away.    

Purpose-driven companies are forcing leaders to become more agile, transparent and even a little vulnerable. The radical communications door that opened during COVID-19 needs to stay that way. The entrepreneurial spirit that allowed companies to reinvent how they did business has to continue to thrive. The agile strategies that respond to a changing environment must become the norm.  And, importantly, with a strong purpose in place, they can make hard decisions through a values-based filter. Steps to take now: 

1. Invest in purpose-driven growth moves. Remind teams that downturns always open white space opportunities for those that are looking “between the cracks.” Encourage teams to continuously search for the next big thing. What will be the crypto or sharing economy of 2023? How might it align with your purpose? How will it move you forward? And, importantly, how does it pay off your purpose? Assume your competition is doing the exact opposite. 
2. Be ruthlessly transparent. Agility is important, but moving too fast can cause whiplash, confusing employees rather than inspiring them. A change in direction and purpose alignment can’t just be clear to leadership–it must be evident to all teams and employees, as well as customers, shareholders and other stakeholders.  Be vigilant, strong and consistent in your communication approach. 
3. Accelerate brand, demand and innovation efforts. Discretionary spending is generally first to go, yet, we have seen in the last three recessions that companies that kept their foot on all of these pedals have come out stronger on the other side. On the innovation side, widen the acquisition aperture. Start-ups and small companies might currently be more open to acquisition discussion, and can immediately fill in offering and experience gaps at a lower price point. On the brand and demand side, it’s easy to fall into the false dichotomy that companies must tradeoff between brand or demand marketing. However, you need both. And there must be a real partnership between the two disciplines often most at odds—sales and marketing–to figure out the right mix today and tomorrow. 

Leverage Employees as Your Greatest Competitive Advantage  

There are many reasons the employee base is so fragile right now. The great resignation, the great retirement and many of the experiments coming out of COVID-19 are still in motion. Many companies will use recession nerves to back off employee engagement efforts. If they haven’t yet focused on their employee value proposition (EVP), they may think they can let it slide.  

This is a big mistake. Like many other companies, Prophet just went through a talent war like few others we have seen. There is no reason to think that will change on the other side of this downturn. 

The current economy is making employees increasingly uncertain about the company-employee contract, despite all the employee engagement skills businesses have built through COVID-19. The EVPs just re-launched at many companies will be thrown into disarray. Pragmatically, if personnel cuts need to be made, it must be done through a strategic lens, tying back to the company purpose. Steps to take now: 

1. Choose programmatic and initiative cuts over personnel reduction. We are still in the early days. And just as the pandemic sparked supply chain issues and are still causing mayhem (just peek in a Target or Walmart warehouse), so too will the labor shortages many are experiencing on a daily basis. 
2. Encourage cross-functional teams. New research from Prophet finds that 63% of companies with higher cross-functional collaboration skills say it increases employee satisfaction scores, and 54% say it boosts retention. People want to work with one another. 
3. Poke at pain points. Hybrid workforces are in their infancy, and there is much to be done to make the experience more fulfilling. Is commuting grinding people down? Are they stressed by after-hours e-mail? Do they have Slack or Zoom fatigue, and are there other tech solutions that might help? 

Make Budget Decisions Through the Experience Lens, not Just Organizational Constructions and Functions 

As mentioned, it’s natural for companies to consider cuts across the organization– in each function and business unit. In tough times, this often feels “fair”. Instead, decisions should be made using the experience point of view: What allows for the best customer and employee experience? 

Companies should take this opportunity to understand what is required across the functions to create differentiated experiences for customers and employees. This may require more granular cuts. And in every company, there are pockets within the budget that will always be spent, often in procedural and programmatic ways. That money may well be redirected to experience investments. Paused programs can always be restarted. Steps to take now: 

1. Create agility through experience pods. Many companies have already put smaller pods into place to boost agility. Put these newer teams to work differently, across functions and in ways that build customer or employee experiences. Create assignments that build connective tissue. 
2. Enhance collaboration. Break down silos and optimize spending by developing a more collaborative working model. Our recent research shows that while 80% of leaders believe collaboration leads to better outcomes, only 28% of hybrid workplaces effectively support it. And only 50% of respondents believe their teams collaborate effectively, even when they’re all in the same room. What are new ways to rewire traditional methods of working including budgeting, resourcing and product development? 

Harness the Investments Made in Technology  

Digital thinking continues to be the lifeblood of business. It drives everything from manufacturing to delivery to remote work. And technology accounts for trillions in business spending, including ongoing investments that can’t be reduced. The problem is that in most companies, this tech exists in ponds and lakes, with little ability to pull it all together.  

And in many, that single view of a customer–the dashboard we’ve all dreamed of–still doesn’t exist.  

If possible, it’s a good time to pause or slow new tech investments, reevaluating digital priorities. Any spending that improves customer experience should move to the top of the list. Steps to take now: 

1. Clarify customer journeys. Use the point of view of each customer segment to ensure existing technology adds value, eliminates friction and provides the right data for future decision-making. This includes mapping the tech to each existing critical process. Encourage teams to find greater optimization. 
2. Reconsider the employee experience. The right digital tools increase employee productivity and satisfaction, enabling the kind of collaboration that drives growth. 

Knowledge of Customers, Competitors and the Market Is the Only Superpower 

Stop guessing. When no one knows what lies ahead (and no one does), it’s critical to understand how customers think, behave and buy in real-time. And it’s just as essential to know exactly what the competition is doing. Amid so many economic changes, the rules of many categories are being rewritten as people and businesses alter their spending patterns. 

What’s required is a set of processes and mechanisms to gather as many insights as possible. This needs to be combined with a mindset that accepts the insights readily, with the willingness to adapt accordingly. No one knows exactly what is going to happen six months from now, but we need the skillset to collect and discern as much about the changing environment as possible. Steps to take now: 

1. Pulse the market. Invest in pulsing capabilities, then embed findings into practices and processes. This constantly feeds into new products, services, experiences and go-to-market approaches. 
2. Use insights to prioritize new investments. These insights may tell you that you do not have what it takes to be successful in an ever-changing world. Don’t be afraid to test and learn as a result, shifting investments as needed. 
3. Challenge team behavior. The hardest part of integrating insights into your business may be changing the behavior of team members to act on the insights. This kind of cultural shift isn’t easy, especially when people are frightened. While you may be cost-cutting, invest in the change required in your culture to drive agility in the organization. 

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Omar Akhtar, Senior Analyst and Research Director at Altimeter, Chan Suh, Chief Growth Officer at Prophet, and Jacqueline Alexis Thng, Partner and ASEAN Lead at Prophet, present key takeaways from Altimeter, a Prophet company’s flagship report, The State of Digital Transformation – which surveyed nearly 600 executives from the U.S., Europe and China.

Our expert speakers discuss key trends in transformation, as well as how companies in China approach digital transformation differently compared to other countries, providing important insights for businesses in Asia.

If you’d like to learn more about Prophet’s approach to digital transformation, get in touch today.

Omar Akhtar, Senior Analyst and Research Director at Altimeter, and Chan Suh, Chief Growth Officer at Prophet, present the biggest takeaways from Altimeter, a Prophet company’s flagship report, The State of Digital Transformation – which surveyed nearly 600 executives from the U.S., Europe and China. They discuss key trends in transformation, including where leading companies are expanding their digital capabilities, what investments they are making and common roadblocks they encounter along the way.

If you’d like to learn more about Prophet’s approach to digital transformation, get in touch today.

Digital transformation is nothing new. Companies we talk to every day have been trudging along on digital transformation journeys for close to 20 years. Despite spending trillions to add newer, more sophisticated digital initiatives to their agendas (with more projected over the next five years), few have been able to grow the way they hoped. A recent survey from the Harvard Business Review reports that only 20% of executives believe their transformation efforts have been effective in any way.

It’s not that all the steps they’ve taken have been misguided. Far from it. Many companies have made significant strides to optimize their existing businesses by using new digital tools and operations, cutting costs and launching new products along the way. But, as business environments change and customers along with them, what we’re finding is that simply adding new tech capabilities, data sets or rich omnichannel experiences without changing the way the business works will limit your company’s growth potential.

Moving Past the “Add-On” Digital Transformation Approach

The evidence we’ve collected by observing clients and conducting field research shows that growth must be an intentional goal of transformation, and achieving it requires businesses to move beyond the “add-on” approach of digital transformation. The add-on approach is a consequence of being overly preoccupied with a typical metric of many digital transformations – digital maturity. Digital maturity is measured by the number of tactics used to optimize the existing business and misses the point: long-term growth.  Digital maturity alone will not unlock what Prophet calls “uncommon growth”– the type of growth that is purposeful, transformational and sustainable over time.

“Digital maturity alone will not unlock what Prophet calls ‘uncommon growth’– the type of growth that is purposeful, transformational and sustainable over time.”

To unlock growth with digital transformation, firms must build on digital maturity to achieve convergence. Convergence is the approach of orchestrating digital transformation efforts around a singular purpose that has been reimagined for today’s customers and employees. Businesses that embrace convergence don’t just add new digital capabilities to solve existing problems, they use existing digital capabilities to work differently, solve new problems and deliver growth.

The progress of individual workstreams, specific digital projects and initiatives, and the building of shiny new capabilities is a known challenge. The more intractable part is getting people in your business to embrace a renewed purpose with digital tools, infuse new rituals into the DNA of the company –and then structure the workstreams that serve customers and unlock growth.  Successful transformations necessitate holistic, if more complicated point of view.

Without converging on a customer-and employee-led purpose, digital transformations are doomed. A business’ purpose must be central to this transformation because it defines the role the business plays in customers’ lives, the meaning of the work that its employees do and the impact that it has on society. As environments change, the purpose of the business needs to be continually re-examined to ensure its continued relevance. Global digital acceleration, sparked by mobile and boosted by the pandemic, is rapidly changing the expectations and behaviors of customers and employees – now the purpose needs to change along with it.

Convergent enterprises are the companies that understand the power of ongoing transformation. They have adopted a mindset that allows them to look beyond the add-on approach to digital maturity and pursue initiatives converged on a renewed purpose that incorporates customer and employee capabilities.

As a first step towards digital convergence, organizations must embrace the challenge of defining a renewed purpose. It doesn’t mean losing your authentic brand and value proposition. Rather it demands reimagining the business through a new lens, integrating digital capabilities throughout, and scaling the outcomes. And that must be done with creativity, empathy and action, not panic or cynicism.

How Best Buy is Rewiring Itself to Go Beyond Retail for Growth

Let’s take Best Buy, a Prophet client, as an example. Over 10 years ago, Best Buy and other big-box retailers began their digital transformation journeys with a determined focus on omnichannel retailing and effective e-commerce. As it moved toward streamlined online experiences, so did all its competitors. Instead of just pressing the “more digital commerce” button, Best Buy leadership realized that to find uncommon growth, they would need to start with a renewed purpose and converge digital capabilities around it. Reinvention had to be based not on how consumers wanted to shop at Best Buy but on why they were there in the first place.

That meant questioning everything from brand purpose to organizational structure to customer experience. By re-centering itself around helping customers make all of their technology work together – not just sell them more stuff – they located an addressable problem that was way bigger than the market they originally sought to capture. They extended their subscription services, installation packages and extended warrantee offerings to the consumer while reimagining their square footage as experiential media opportunities for their manufacturer partners.

By expanding the borders of its value proposition and building a moat around proprietary digital tools, Best Buy continues to build a convergent enterprise limited only by its imagination and poised for sustainable growth. The results so far are astonishing. In its latest quarterly results, revenues have steadily increased 24% over the last five years.

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Digital transformations that unlock uncommon growth are special. They require more than just adding on new digital capabilities or deploying new experiences, or even fielding new business models. Rather, organizations must work hard to converge these efforts around a singular purpose that is relevant to how customers live and work today – and find ways to satisfy their unmet needs.

1. Re-focus The Operating Model

Everything from talent, organization design, processes, interactions and tools should support the customer or employee experience that the company is trying to achieve. This means converging KPIs and measuring success in a way that ties the organization together in a shared commitment to customer outcomes.

2. Solve The Customer’s Actual Problem

Both internal and external-facing initiatives must embrace the evolved capabilities and new behaviors that customers and employees have today. The needs that your business was originally designed to address are likely being re-shaped by new capabilities that your customers are using. By pursuing new businesses at the intersection of what customers want and what they can already do with digital, firms will be able to address unmet needs in underexplored growth territories.

3. Reskill The Organization From the Top-Down

Investment in training for everyone from executive leadership to support staff will drive an enterprise-wide understanding of the software, tech and agile processes on which the business is built. Successful transformations are led by CEOs and executed teams who can connect strategy to implementation; orchestrate between new processes, new data and digital tools; and create impact.

4. Upgrade Your Go-to-Market Capabilities

Treat data as a renewable resource. Leverage marketing and sales functions to get closer to the customer and use always-on insights to enable a loyalty engine that not only drives preferences and new value props but also helps organizations anticipate shifts in demand.

5. Create Incentives for Innovation

Developing incentives for innovation throughout the company means rewarding test-and-learn, experimentation and calculated risk while tweaking funding models and time horizons to ensure that worthy investments are given a fair chance to succeed. No more short-termism or single-horizon thinking.

“Organizations must work hard to converge these efforts around a singular purpose that is relevant to how customers live and work today – and find ways to satisfy their needs.”

Getting Started:

Becoming a convergent enterprise is not quick or easy. We don’t expect every business will attempt it all at once. But, regardless of where you are in your transformation journey, we believe that every company has the ability to achieve convergence. The only requirement is a commitment to renewing purpose, shifting mindsets and aligning your priorities and pursuits. That starts with introspection.

Renewing your company’s purpose is not unique to digital transformation but because the digital environment has fundamentally transformed the way we live, it is a prerequisite for driving successful convergence.

Four Steps To Get Started

1. Assess the relevance of the business purpose to today’s customers, employees and stakeholders. 
   Begin by asking how context, competition and new capabilities have impacted your purpose. Has any part of it become outdated?
2. Map your existing digital transformation activities to convergent moves.
   Identify the gaps between the initiatives you’ve already invested in and those you should be investing in, to balance the portfolio of moves that are right for your organization.
3. Measure the change readiness of your organization. 
   Understand how proposed shifts in priorities will impact decision-making and ways of working – establish a team to help lead the transition.
4. Develop the convergence agenda to connect the convergent moves to an updated purpose.
   Use your renewed sense of purpose to prioritize the orchestration of effort.

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In this year’s State of Digital Transformation report, our goal is to identify the key differences between the businesses who succeeded at digital transformation, and those who were still struggling. We surveyed 587 executives from the US, Europe and China, across a range of industries to highlight not only their current digital capabilities but the key investments and choices they made that got them to where they are. By separating the responses of high performers and average performers, we identified the key characteristics of companies that successfully met their transformation goals.

This report serves as a benchmark for what digital maturity looks like in 2021 and charts a path forward for businesses that are looking to thrive in the next wave of digital transformation initiatives.

Key findings include:

• Growth and innovation were the top transformation goals for top performers, while average performers cited modernization and efficiency as their top goals.
• The majority of companies used a holistic, or coordinated simultaneous transformation approach to transform the organization, rather than transforming departments in isolation, or sequentially.
• COVID-19 reduced budgets and resources for transformation, but it did not slow transformation programs. In fact for high performers, it accelerated transformation efforts.
• Companies with successful transformations were much more likely to prioritize data management, innovation, customer experience and employee experience initiatives, compared to average companies.
• Transformations led by the CEO are more successful than those led by other positions
• Digitally mature companies are looking to invest in leveraging data, optimizing customer and employee experiences, and building external partnerships and networks to prepare for the next phase of transformation.

Download the full report below to learn more.