Technology firms not best at keeping up with technology, study finds
Survey by consultancy Korn Ferry finds financial services companies are the most ‘digitally sustainable’, with tech firms ranked second
If you were asked what type of company stands the best chance of keeping up with the rapidly shifting needs of a digital economy, your answer might be technology firms.
Well you’d be wrong, at least according to a new study by international recruitment consultancy Korn Ferry released on Tuesday. Perhaps surprisingly, tech businesses were kept off the top spot in Korn Ferry’s “digital sustainability index” by financial services companies.
Based on a survey of 362 firms in 14 nations across five industries, the index gauges an organisation’s ability to adapt effectively to a constantly changing digital economy.
The supremacy of finance companies in the study comes partly from their sheer determination to serve their customers’ needs, according to Michael Franzino, president of the consultancy’s global financial services practice.
“Financial companies have, for some time, had the compelling commercial drive to shift culture, processes and practices – seeking to protect customer data and market share while meeting new customer and talent demands,” said Franzino.
Rising global investment in financial services technology and intense competition from “hybrids” that combine both traditional and online platforms have also helped propel financial services firms to quickly adapt to the changing market needs of an increasingly digital world.
But why are technology companies not, by their very definition, best able to adapt?
Because many of the older ones’ agility is hampered by historical baggage, according to Werner Penk, president of Korn Ferry’s global technology practice.
“The technology sector is not only made up of the high-growth ‘unicorns’ and disrupters of the world, but also decades-old legacy tech giants in need of structural, cultural and work process reform,” said Penk. “The more traditional firms – once pioneers of the industry – now need to overhaul their strategies and work processes to ensure future survival.”
Ranking third in the survey is life sciences and health care, followed in fourth place by the industrial sector.
Consumer goods providers and retailers ranked last, in fifth position, as many players have “one foot in the digital world and one foot in the traditional storefront” which means they are “playing catch up rather than anticipating what consumers will want next,” the consultancy said.
The study, which combines public and “proprietary” data collected by the Korn Ferry, rates the companies on the five dimensions it says drive digital sustainability: agility, connectivity, discipline and focus, openness and transparency.
As well as ranking industries, each country is also given a score on their “digital sustainability”.
Among the 14 nations surveyed, the US emerged as the most digitally sustainable”, followed by Britain.