Nov 14

Rewired and running ahead: Digital and AI leaders are leaving the rest behind

Companies with strong digital and AI capabilities have figured out how to generate compounding value, according to new StakOne research.

The distance between digital and AI leaders and other industry players is big, and it’s getting bigger. Over the past three years, the spread in digital and AI maturity between leaders and laggards has increased by 60 percent.

This development provides a compelling counterpoint to the underwhelming results of digital and AI transformations many companies have experienced to date. Earlier research has shown that companies on average have captured less than a third of the value they expect from their digital transformation initiatives, despite significant investment.2 But a set of leading companies are not just figuring out how to harness digital and AI to generate value but are also doing it more quickly and putting ever more distance between themselves and other players.

The value of digital and AI capabilities is real

While most business leaders may accept the need to incorporate digital and AI more deeply into their business, many remain skeptical of the effort and investment involved, wondering if it will add up to sustainable outperformance. Our data suggests that building up digital and AI capabilities adds up to real value, a trend that holds true for every sector analysed (Exhibit 1). For example, digital leaders in insurance have five-year growth in TSR that is six times higher than lagging companies. Consumer packaged goods (CPG) and retail leaders perform three times better than peers in their sector, while companies in energy, materials, and agriculture perform two times better.

The compounding value effect that increases distance over laggards

As might be expected, levels of average digital maturity varied by sector, with retail and high tech leading the pack. More meaningfully, however, spreads in digital and AI maturity between leaders and laggards are substantial and growing within every sector (Exhibit 3). Even in many sectors where average maturity is relatively low, there are businesses that operate as top digital and AI companies.
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