Embracing risk key to digital transformation

Can Canadian businesses overcome their conservative reputation to transform?

Embracing risk remains one of the major traits that sets apart those who merely say they’re ready for a more digital future and those who’ve invested in that future, according to new research.

The study conducted by Deloitte and the MIT Sloan Management Review interviewed 3,500 executives from around the world, including roughly 140 from Canada. It grouped their companies into three rankings – those that are early in their digital transformation, those mid-stream, and those that are digitally mature (based on how much a given company was using technology to change how they did business). It then highlighted the practices that the most experienced companies had successfully adopted to provide a beacon for those further down the curve.

“Overcoming aversion to risk is perhaps the most important characteristic of digitally maturing [corporate] cultures,” the report’s authors wrote. “They have conquered this cultural barrier by encouraging their organizations to experiment and accept the risk of failure – approximately 71% of digitally maturing organizations versus some 29% of early-stage companies.”

Across all levels of digital sophistication, those surveyed found an overall need for more bravery when it came to modernizing their companies and agreed that business leaders needed more of an “experimentation mindset” (61%) and “risk-taking attitude” (55%) to drive transformation.

Canadian companies have a bit of a reputation for being conservative, but experts believe consumers may be pushing them beyond their comfort zones.

“While Canadian marketers are traditionally risk averse, as consumer data builds the case for various user behaviors, marketers are responding,” says Sonia Carreno, president at IAB Canada. “Mobile is a great example of this. The shift in usage towards mobile has effectively motivated investment to meet the patterns of usage.”

The IAB’s latest online ad revenue report indicates a 57% surge in Canadian mobile ad spending in 2016, making that $2.5 billion investment nearly half of all online spending last year.

Carreno says she sees Canadian firms quickly realizing how fast new technologies can disrupt an entire business sector. After Uber and Amazon shook up transportation and shopping, for example, she says companies are “no longer being graded on singular criteria, they are being graded on a scale that includes all of their other online experiences. This is creating an enormous amount of pressure on marketers to innovate and to deliver great user experiences from initial impression to final transaction.”

Photo credit: Alex Wong on Unsplash