Business Journal


BCG: Fusion of Tech, Human Capabilities Delivers Innovation, Growth for Firms

A new Boston Consulting Company (BCG) research findings published recently revealed that some companies are leveraging the full potential of technology and human capabilities to deliver innovation, adaptability and high performance.

The study, titled The Rise of the Digital Incumbent, explores how traditional companies that have successfully undergone digital transformation (digital incumbents) are building disruptive capabilities to compete with digital natives.

This is as legacy incumbents—traditional companies that have yet to deliver a successful digital transformation—struggled to drive growth and improve productivity using predominantly traditional levers.

The article describes a new hierarchy for business and highlights the different digital dynamics in four types of companies: legacy incumbents, digital incumbents, digital natives (companies founded in the digital era), and hyperscalers – the top dozen or so digital natives whose platforms, infrastructure, and data scale with enormous breadth and depth, thus conferring major structural advantages.

BCG leveraged global survey data from more than 950 senior leaders from all types of companies who were asked to describe where they are on their digital or bionic journeys, and to self-score their digital capabilities.

The research revealed that digital transformations are difficult, but companies can dramatically flip the odds of successfully becoming a digital incumbent by applying the six key success factors for digital transformation that were identified in 2020.

“The paradigm is no longer simply, ‘digital natives will destroy incumbents’,” says Romain de Laubier, a BCG managing director and partner and a coauthor of the article. “Digital incumbents in traditional industries are joining digital natives and digital hyperscalers in the congregation of companies that have the capabilities to disrupt existing business models and deliver innovation and revenue growth.”

Tolu Oyekan, the Managing Director, Partner and Head of BCG Nigeria, said, “Nigeria’s financial industry has demonstrated how successful digital transformation can lead to innovation, sustained relevance, profitability and business expansion. The emergence of digital natives (fintech) that are leveraging technology to offer disruptive services pushed the incumbent banks to embrace digital transformation initiatives that have improved financial inclusion and the growth of digital economy.

“There is, however, a lot more that these companies and those in other sectors can do to build digital capabilities comparable with digital natives,” he added.

The article asserts that the successful companies of the future will build the necessary digital capabilities—both human and technological—to become what BCG calls bionic. Along the way, they will deliver superior innovation and performance.

The authors detail the five attributes that best define any company’s progress toward the bionic target state:

  • Leadership with a purposeful digital strategy
  • A culture that promotes innovation
  • An agile operating model
  • The ability to attract, retain, and develop world-class digital talent
  • Open-architecture technology and data platforms


“Digital incumbents should take heart from the findings of this research,” says Patrick Forth, a BCG managing director and senior partner and a coauthor of the article. “They must continue to develop the five bionic attributes, which requires making the transition from successful digital reengineering to generating growth from innovation. For those that manage to build the necessary attributes at scale, the rewards of being both digitally capable and having the incumbent advantages of scale, scope, customer relationships, and data, will be substantial.”

The authors note that legacy incumbents are being left behind and need to act with urgency to reapply themselves, implementing the digital reengineering that will give them the digital capabilities they need to compete for growth.


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