A view across MIT's campus
In an era where digital transformation is reshaping industries at a breakneck pace, Peter Weill, Senior Research Scientist and Chairman of the MIT Center for Information Systems Research (CISR) combines depth of experience (25 years as Chairman of CISR) with keen analysis of changes in the tech landscape. His latest research centers around the topic of real-time decision making, and the outsized performance of those companies that have adopted the relevant practices associated with it.
The Power of Real-Time Decision-Making
Weill’s research underscores the power of real-time decision-making. Companies that excel in this area not only outperform their competitors but also create a continuous loop of improvement and innovation. "It takes good, trusted data that is accessible by every person and machine that needs to make decisions," Weill explained. This trusted data, often stored in the cloud, becomes the rotor of a metaphorical helicopter, driving the lift with three blades off the rotor: better customer experience, easier employee experience, and agile business operations. These create performance lift off for companies, where improved confidence in data leads to faster and more effective decision-making.
Peter Weill of MIT CISR
Weill highlighted the significant impact of this approach, noting that companies he has studied that operate in real-time have achieved 97% higher profits and 62% higher growth than their industry competitors. The key, he emphasized, lies in eliminating inefficiencies like re-litigating decisions and relying on outdated processes, which are common in companies that do not operate in real time.
Digital Flywheels in Action: Real-World Examples
Weill provided several compelling examples of companies leveraging real-time data to create value. Schneider Electric, for instance, has developed a platform that enables clients to manage energy efficiency within commercial buildings in real time. By connecting to any hardware, not just their own, Schneider has been able to offer a service that hospitality companies and other clients use to measure and manage energy consumption, demonstrating the value of real-time insights.
Similarly, Weill discussed the case of Australia’s ANZ Bank, which has captured a 50% market share in anti-money laundering services by offering them as a platform model. This "everything as a service" (XaaS) approach is increasingly becoming a hallmark of successful companies that can deliver what they do best as a service to others.
These examples highlight the ability to create real-time enterprises may develop better pathways to productize ideas initially developed to improve their own operations.
Another fascinating example is United Airlines, which has implemented a real-time data system known as Connection Saver. This system allows the airline to make informed decisions about delaying flights by a few minutes to ensure that more passengers can make their connections. This approach not only enhances customer experience but also improves operational efficiency, contributing to United's outperformance in revenue growth and margins compared to industry averages.
The Role of Digital Savviness in Boards and Leadership
Weill also touched on the critical role of digitally savvy boards in guiding companies through digital transformation. According to his research from 2019, only 20% of companies currently have digitally savvy boards, but those that do perform better across nearly every metric. Weill discovered that having at least three digitally savvy directors is the tipping point at which a board begins to significantly influence a company’s digital trajectory.
Weill’s findings from a 2024 survey show that while 70% of boards now have three digitally savvy directors, the bar for what constitutes digital savviness has risen. As new technologies like generative AI and climate tech emerge, boards must continuously update their knowledge and approach to remain effective.
Generative AI: The Next Frontier
Looking ahead, Weill sees generative AI as a game-changer for customer experience (CX) and employee experience (EX). He noted that while generative AI is still in its early stages, its potential to revolutionize interactions between companies and customers is immense. "Enabling the customer to have a richer conversation with the organization via technology...is going to be huge for generative AI," Weill predicted.
He also pointed out that generative AI could be instrumental in making sense of vast amounts of unstructured data within companies. By analyzing documents and extracting insights that might otherwise remain buried, generative AI can drive more informed and timely decision-making.
The Urgency of Real-Time Transformation
As companies continue to navigate the complexities of digital transformation, Weill cautioned against falling behind in the race to become real-time businesses. The gap between digitally advanced companies and those lagging is widening, and the consequences of not keeping pace are becoming more severe. "You can’t get left behind on being real time," he warned, highlighting the importance of continuous learning and adaptation at both the leadership and organizational levels.
Weill's insights provide a roadmap for companies seeking to thrive in the digital age. By harnessing the power of real-time data, fostering digitally savvy leadership, and embracing emerging technologies like generative AI, organizations can stay competitive and also unlock new levels of growth and innovation. As Weill’s research shows, the future belongs to those who can adapt quickly and lead with confidence in a rapidly changing world.
Peter High is President of Metis Strategy, a business and IT advisory firm. He has written three bestselling books, including his latest Getting to Nimble. He also moderates the Technovation podcast series and speaks at conferences around the world. Follow him on Twitter @PeterAHigh.
