Reframing Growth Strategy in a Digital Economy
Big corporations need new strategies in a world of digital disruptors. That means setting ambitious visions and coming up with concrete action plans. The new C-suite mantra: “What’s your play?”
Digital technology is radically changing the behavior of individuals, corporations, and entire societies, and disruption seems to be the new normal. CEOs are faced with the dual challenge of protecting their backyards from upstarts and incumbents while simultaneously devising strategies that will guide their growth for the next five years.
For most, this is a daunting task. If you are a senior executive faced with these challenges, how do you ensure the continued growth and sustainability of your company? Or, to put it another way, What’s your play?
Some Fortune 500 companies are doubling down on defensive strategies, promoting cost efficiency and productivity to protect their core business. Others are attempting to “future-proof” their business model through acquisitions. For instance, following a five-year acquisition spree, Walmart’s $3 billion deal with Jet.com signals a serious commitment to competing with Amazon.com. General Motors Co. is clearly thinking about the future of car ownership with its (unsuccessful) attempted acquisition of Lyft.
None of this is wrong, and the logic makes sense. But is either approach sufficient to sustain the growth and health of your business and demark you from competition longer term? We believe not.
When challenged by a host of disruptors who are exploiting traditional market dynamics, finding growth opportunities in increasingly onerous regulatory and competitive conditions is hard these days. And harnessing the power of constantly evolving digital technology to break down well-established barriers to entry and devise new business models is a complex endeavor. To rise above the fray in this challenging context, you need to find ways to fight a battle you’re well positioned to win. For leaders of big companies, this means capitalizing on an ability to do things the disruptors simply can’t — set an ambitious vision, plan globally, invest strategically, and mobilize considerable resources to assert digital dominance. In other words, elevate above the level of the disruptors and transform your scale from a liability into an asset.
This may sound easy, but it isn’t. Too many companies are still formulating their growth strategies based on traditional growth planning approaches — yearly cycles, historical analytics, and incremental thinking. With the velocity and uncertainty that characterize this new digital economy, traditional growth planning has reached the end of its useful shelf life. It just won’t get you there.
Nik Zafri Abdul Majid