In May 2019, we published a provocative article describing how only 24 percent of boards of large US-listed companies were digitally savvy, and those companies outperformed the others by at least 34 percent on market cap growth, ROA, and revenue growth.[foot]Peter Weill, Thomas Apel, Stephanie L. Woerner, and Jennifer S. Banner, “It Pays to Have a Digitally Savvy Board,” MIT Sloan Management Review, March 12, 2019, https://sloanreview.mit.edu/article/it-pays-to-have-a-digitally-savvy-board/.[/foot] Since then, we and many who saw the findings have wondered about the digital savviness of top management teams.
Our current global MIT CISR study on the digital savviness of companies’ top management teams (TMTs) has produced similar results. Among larger companies, only 7 percent had a TMT more than half made up of digitally savvy members, and those companies outperformed the rest on growth and valuation by more than 48 percent. In this briefing, we will summarize our research methodology, explain the results, share observations of executives who have recently become digitally savvy, and suggest actions to increase the digital savviness of your TMT.