MIT Sloan Study: Just 7% of Companies Have Digitally Savvy Executive Team

Marketing and PR require considerable time to educate executives that aren’t digitally savvy; if we can keep our frustrations in check the payoff promises big returns

One of the biggest frustrations in the marketing and PR profession today is the lack of understanding from the leadership.

For example, you invest a lot of time into research and planning. When the time comes to pitch your plan to the leadership, you begin to realize they don’t have a clue what you’re talking about. So, you spend much of your time trying to explain things.

But it’s hard to have a basic conversation about marketing if they don’t understand the same lexicon. As a consultant, I don’t mind, because it’s a learning moment that endears me to the top executives. Yet for in-house teams – and I’ve been in those shoes – it’s frustrating.

You wind up spending as much time making the case for doing your job, as you do actually do your job. It’s the antithesis of agility, it drags on business results, which in B2B tech takes time, and, the best marketing and PR talent won’t stick with such leaders for long.

I have a theory about why: for many managers and executives, the last time they cracked open a marketing book was in college. For those holding the top leadership billets, that could have been 20, 30, even 40 years ago.

Shortage of digitally savvy executives 

I’ve long suspected the growing reliance on digital in marketing and PR is a significant contributing factor. A study of 1,984 large global businesses, published in the MIT Sloan Management Review – Does Your C-Suite Have Enough Digital Smarts? – found just seven percent of companies have digitally savvy executive teams.”

The study defines a digitally savvy leadership team as “a team in which more than half of the executive members are digitally savvy.”

It’s not much better when you look at individual executive leaders. “Among the companies we studied, the average top management team has nine members. Overall, only 17% of individual team members are digitally savvy,” according to the study.

Are CTOs and CIOs more digitally savvy? (Nope)

Surely that’s a function of the role, right? In other words, those leaders with tech-oriented careers are probably more digitally savvy, right?

Wrong.

Less than half of CTOs (47%) and CIOs (45%) “can be considered digitally savvy.”

How can this be?

As the study explains, “Often, the attention of top technology executives is focused more on IT infrastructure and back-office operations than on the more strategic quest to create business value from digital technologies.”

Are certain verticals, like tech, more digitally savvy? (Nope)

If a company sells software, then the executive team must be more digitally savvy, right? After all, digital is inherently linked to technology and technology is the business.

While “the highest proportions of digitally savvy executives” come from “media, software, and telecom companies,” the experience and skillset are still lacking. Just “approximately one-third of top team members” in these vertical markets are digitally savvy.

Other vertical markets fared even worse. “Only 12% of top team members are digitally savvy in the finance and insurance industry, underscoring its vulnerability to disruption by more agile fintech startups.”

The article sums up the problem aptly: “Unfortunately, the demand for digital savviness in the upper echelons of leadership has grown far more quickly than the supply.”

The business case for digitally savvy executives

Companies with leaders that are digitally savvy, outperform “comparable companies without.”  The study found these companies “have 48% higher revenue growth and higher valuations (share price to sales ratio) and 15% higher net margins than the rest of the companies we studied.”

It’s not just the CEO and CFO that need digital skills, it’s also true for those old-school marketing and corporate communications leaders. The study revealed, “Companies with digitally savvy executives in five roles — CEO, CFO, head of marketing, head of corporate communications and investor relations, and head of compliance and legal — have the strongest statistical link to high performance.”

An educational opportunity for PR and marketing 

Marketing these days isn’t just about marketing, it requires considerable time to educate executives. Often that means making a business case for marketing program or budget over and over. It’s every bit as much about managing up as is about identifying and building markets.

To that end, if we in marketing and PR can keep our frustrations in check and be patient with executive education, it will pay off. Other studies have shown executives that understand communications also tend to value it more.  The returns could be above and beyond what the best marketing in the world could deliver on its own.

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