The Entrepreneurial Returns to Incumbents’ Digital Transformation

Jacques Bughin and Nicolas van Zeebroeck

No 2021-048, Working Papers TIMES² from ULB -- Universite Libre de Bruxelles

Abstract: Returns on investing into digital technologies by incumbents may be low as result of them facing adjustment costs. We derive benchmarks of returns to digital investments while demonstrating that returns are enhanced by strategic renewal at sufficient turbulence levels. We also demonstrate the relative contribution of four organizational drivers (risk-appetite, threat sensing, new capabilities, and leadership involvement) in shaping those returns, through their joint effects on both strategic renewal propensity and incumbent organizations’ commitment to large digital investment programmes. Entrepreneurial leadership is a core component of successful digitization programmes both directly through top management involvement in digital projects, as well as indirectly though leadership building awareness of value at risk and by engaging in complementary digital capabilities.

Keywords: Digitalization; Digital transformation; strategic renewal; adjustment costs; entrepreneurial leadership (search for similar items in EconPapers)
Pages: 32 p.
Date: 2021-07
New Economics Papers: this item is included in nep-ent and nep-pay
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