CEOs taking up digital strategy role but organisational challenges remain

New McKinsey and Company report finds CEOs, CMOs and CIOs are all getting involved in digital strategy yet talent, legacy processes and lack of focus hinder progress

CEOs are becoming more actively involved in digital strategy than ever before yet many companies have not made the organisational-level changes necessary to embrace digitisation successfully, a new report claims.

The annual McKinsey and Company report, based on a survey of 850 c-level executives globally in April and released earlier this month, found 61 per cent of CEOs are either supporting, sponsoring or are directly engaged in digital business initiatives this year, up from 55 per cent in 2013 and 46 per cent in 2012. This compares to 61 per cent of CMOs, and 69 per cent of CIOs this year, increases of 7 per cent and 6 per cent, respectively.

In addition, 41 per cent of this year’s respondents said their CEO was responsible for their organisation’s overall digital agendas.

The report also makes plain the rising influence of the chief digital officer role. The 2014 survey found 30 per cent of respondents had a CDO directly engaged in or supporting digital business initiatives, up from 24 per cent last year.

The top three strategic priorities for digital this year are digital engagement of customers (69 per cent), digital innovation of products, operating or business models (64 per cent), and big data and advanced analytics (45 per cent). The top three digital trends as a share of overall digital budget spending are digital engagement of customers (62 per cent), digital innovation of products, operating or business models (60 per cent) and automation (44 per cent).

“It’s evident that digitisation has become a critical asset in many companies’ quest for growth,” the McKinsey and Company report authors stated. “More than three-quarters of executives say the strategic intent behind their digital programs is either to build competitive advantage in an existing business or to create new business and tap new profit pools.”

Related: Digital disruption about to impact health, education sectors

Despite the growing realisation of digital’s core role, only 40 per cent of respondents said they have adequate accountability measures in place, such as targets, performance incentives or an executive ‘owner’ of digital programs. Just 7 per cent believed their organisations knew the exact value at stake from digital.

Only 4 per cent of respondents report high returns on their company’s current digital investments, McKinsey and Company stated.

The top hurdle listed to meeting priorities for digital programs is talent, both in terms of functional and technical skill sets, followed by inadequate organisational structure and inflexible business processes. Not surprisingly, it was larger companies of more than US$1 billion in annual revenue that were finding legacy processes to be a significant issue.

McKinsey and Co's Josh Goff tells you how to avoid an epic digital fail

Only one-third of executives said at least one in 10 of their employees are spending any time working on digital projects, and 44 per cent said analytics and data science skills were the biggest gap expected over the next 12 months.

Respondents were also asked for their growth expectations over the next three years. These were highest at organisations actively pursuing digital to create new business, McKinsey and Company stated, at 54 per cent. Across the board, one third of those surveyed see at least 15 per cent of their total growth in the next three years coming from digital investments.

Follow CMO on Twitter: @CMOAustralia, take part in the CMO Australia conversation on LinkedIn: CMO Australia, or join us on Facebook:, or check us out on Google+:

Signup to CMO’s email newsletter to receive your weekly dose of targeted content for the modern marketing chief.

Read more: NAB shares the key ingredients to digital strategy success

Join the CMO newsletter!

Error: Please check your email address.
Show Comments

Supporting Association

Blog Posts

Building e-motional connections with customers

The warm weather is upon us. It’s a time of year often associated with the blossoming of love and relationships, which has me thinking about how marketing has leaped forward in its ability to build emotional connections with customers.

What happens when the 'market' becomes a 'customer'?

One of the insightful things that has been said to me recently came from an independent consultant working at a major FMCG client. He said: “The problem here is that we have some people who are world-class at marketing to the masses, but they haven’t got a clue about how to speak to a customer.”

3 Metrics to measure B2B content marketing ROI

Content marketing has become a key pillar for marketing departments of all sizes across the world. But how do you measure – and ultimately prove – the effectiveness of the time, money and energy spent on content marketing?

Pardon the delay here, but thanks for mentioning Framed here, Nadia. We're excited to be working in this space, open to connecting if you...

Tim Wut

Predictive analytics for the masses gets closer as vendors ramp up investments

Read more

Customer Identity Management is becoming critical for enterprise companies looking to create meaningful interactions with their customers...

Michael Mitrakos

Customer identity management as a revenue driver for CMOs

Read more

Informative comments , I loved the info , Does anyone know if my assistant could get ahold of a blank 2011 IRS 8804 - Schedule A document...


Telstra unveils fresh digital content media services

Read more

So, the one thing I would say is .. the customer already has a voice, whether you wanted them to have one or not .. and they have a platf...

Paul Gilbert

Why digital strategy equals customer experience

Read more

Appliances online are doing a good job online, but they're still not giving customers a truly powerful online experience in my view. Wher...

Graham Howlett

Navigating the future of omni-channel retailing

Read more

Latest Podcast

More podcasts

Sign in