Blockbuster, Sears, Kodak, Borders, Compaq – we have all heard of their stories, their failure to effectively respond to the disruption that is hitting companies from all directions, in every industry and sector. We look in retrospective and see the culprits the brought so many companies down – more agile competitors, changing customer preferences, tighten regulations, dated business models, disruptive technologies, company culture. The list goes on and if we dig deeper, we can easily uncover an underlying element in their journey to fiasco: the inability to transform.

It’s not that organisations don’t want to transform. Leaders have, for some time, understood the need for constant transformation. But, as an often-quoted research from McKinsey shows, 70% of all transformations fail. The problem is that many leaders have focused on the “hardware” of change — such as introducing new technology and systems — the greater challenge is to create the “software” needed to alter culture and create the conditions for continual transformation and consequently long-term success.

Digital disruption has emerged as the defining business issue of our age. With new products, services, and brands entering the market at lightning speed, transformation is needed not just once but over and over again. For organisations, it means bringing better products, services, and experiences to market faster than ever before. It means helping employees embrace consistent change and attracting sought-after talent of all demographics from across the world. It means engaging directly with customers on an ongoing basis. It means keeping up with — or even overtaking — pure-play digital leaders. It means developing the capacity to continually transform and thus achieving digital sustainability

The future of work belongs to those who can continuously adapt. Yet, despite its ubiquity, organisations across the world struggle to manage digital change.

The good news is that while there is a formula for failure, there are also guidelines for success. Many things are important to the success of sustainable transformation but built on nearly five decades’ experience and data developed to help the world’s leading companies change, Korn Ferry has identified the five key dimensions that enable organisations to transform time and again to respond to change: Agility, Connectivity, Discipline & Focus, Empowerment & Alignment, and Openness & Transparency.



Korn Ferry examined the traits of digitally sustainable businesses to produce the Korn Ferry Digital Sustainability Index (DSI). Based on in-depth meta-analysis and investigation, the DSI ranked 362 organisations across five industries and 14 countries on the five dimensions of digital sustainability.

Among the DSI’s core findings:

  •         The Index shows a correlation to profitability. High performers in the Digital Sustainability Index see a 5.6 percentage point increase in profit margin (EBITDA) versus the low performers.
  •         Empowerment & Alignment, which measures how well employees understand their contributions to the business’s journey, is the dimension most closely correlated with overall DSI score, demonstrating that people are the lynchpin of digital sustainability.
  •         Companies in all industries are struggling to create lasting sustainability, but Financial Services leads the pack, topping the industry Index by some margin. Outperforming even Technology firms, the industry achieves a low score in Agility but excels in all other dimensions.
  •         The top-performing company in the DSI comes from the Technology industry, leading all other companies by a wide margin of 12 points. Showing high performance is possible in any industry, the top three companies are all from different industries — Consumer, Industrials, and Technology.

Digital sustainability differs considerably by industry.

The Financial Services industry ranked highest among the five industries in the study. Financial companies have, for some time, had the compelling commercial drive to shift culture, processes and practices. Under pressure from expensive regulation, cheap competition, and rising customer expectations — the industry has embraced digital ways of working to kick-start a revolution.

Surprisingly, the Technology industry did not make the top spot in the DSI coming in at number. 2. The Technology sector is not only made up of the high-growth start-ups and disruptors, but also decades-old legacy tech giants in need of structural, cultural and work process reform. The more traditional firms – once pioneers of the industry – now need to overhaul their strategies and work processes to ensure future survival. This second-place overall finish underlines a finding by the Index: digital products and infrastructure do not always equal digital sustainability. In fact, it is people who will ensure lasting success.

While the Life Sciences & Healthcare industry is known for having innovation front of mind, it has been unable to make the adjustments necessary for the future of work due to a failure to be open and transparent with employees and customers. The third-place ranking industry has to raise above its legal and regulatory fears to keep pace with disruptions.

Second from bottom overall in the global list, Industrial businesses around the world are failing to keep up with the rapid changes associated with the digital economy, and are in danger of being swallowed by disruptive forces. The impetus to become digitally sustainable may not have hit the industry yet, with Industrials firms experiencing the lowest level of market disruption of the industries covered in this research. However, disruption is likely to accelerate as the Internet of Things, automation, driverless cars, and 3-D printing become widespread and manufacturers seek new ways of scaling production and efficiency.

Sitting in fifth and last place on the Index, Consumer companies are at a crossroads. Many have one foot in the digital world and one foot in the traditional storefront. Companies have adapted to e-commerce and have reduced time to delivery, but many are still playing catch up rather than anticipating what customers will want next. Leaders need to look way beyond the now and move as quickly as the industry is evolving.

The future belongs to the digitally sustainable. Is your industry and your organisation ready for the journey? Read our industry spotlight report to find out and learn how to steer your company and its leaders in the right direction.

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About Contributor

Tonny Loh is a Senior Client Partner for Korn Ferry Advisory, Singapore. He specialises in corporate planning and strategy, business analytics, and public sector policy advisory in Singapore and Malaysia. Tonny has worked on several large-scale projects in strategic workforce planning. He has designed and set up new and revamped global organisations, including the design of initiatives around organisational design, reporting lines and processes, change management, and key performance indicators.

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