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?”

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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.

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An MIT SMR initiative exploring how technology is reshaping the practice of management.
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Comments (5)
Michael Zeldich
Dear Mikhail, an increase in productivity of labor is the most important task, but the way, selected, leads to digital slavery. 
In the essence, your approach assumes the supply of workers by the electronic overseers, which will force them  to work constantly  on the limit of their abilities. 
This is terrible and not efficient. 
In reality, an increase in productivity of labor can be achieved due to the reorganization of the economic life of society. 
The economy of individual farmers business is ideal model for reorganizing the entire economical life of society. 
Wide spread application of this model will convert hired workers into the small producers, who live due to the difference in its own incomes and expenditures. In this case, organizations can be considered as the cooperatives of such producers.

Further development of this model can sanitating the life of society, creates prerequisites for increasing the level of birth rate, and will make economic crimes unfavorable from an economic point of view. There are many more consequences could be foreseeing.

Besides, it is principally impossible obtaining complete digital mapping of the behavior of a person, since the behavior of a person has subjective nature. This subjectivity is the result of life experience, but it is not reducible to it. Therefore, the finite plurality of the algorithmic models of the behavior of individual will not be able to completely predicting his behavior and will not be able to substitute personnel from which it is expected creative approach to they responsibilities. 
Nevertheless, the proposed change in the economic relations open the way to the application of reasonable machines as the tool for increasing productivity of labor of individual producers. 
However, for creating such machines, it is necessary to move beyond the limits of AI and to switch to the creation of subjective machines, instead of those programmed.

This will make it possible to create the machines, which possess abilities, instead of the creation of the machines for performing a set of actions, intended for fulfilling of a prematurely known purposes.
Munyaradzi Mushato
Very good read indeed.My take is that the problems facing corporates is NOT that Executives do not think about the future in most cases, but rather has to do with misalignment between the thinking (and the word) on one side, and action/decisions on the ground. Executives need to set solution priorities and structure incentives and rewards around areas that give the highest leverage in preparing and position companies for digital age survival and growth. What i have seen is a disconnect between the imperative to future-proof models and what teams are being reward for and incentivised to do in the present. That philosophy tends to  focus organisation cultures around short term preservationist approaches. The ideal mindset  for insulating corporates against disruption is one that shifts an organisation from the disrupted to  the disruptor through pre-emptive strategies that are hinged on balancing the future with the present.
Dagfinn Wåge
Thanks for a great article. I also believe that the future needs to be invented using innovation. But before you do, it might be a good idea trying to understand what is new and different in these digital disruptive business models. Our humble effort covering the intersection between business models, innovation and digital technologies can be found in our new book:  www.disruptiveecosystems.com
Nik Zafri Abdul Majid
I think corporations should think about how it all started. The basics and how we get along with it. When we overlook the basics, we would be unable to catch up with the evolution. Yes, we can hire experts and consultants to deal with them but today we think we do things right, tommorrow another technology will come and replace it. We think that following the trend will make us better. To me, personally, I would say, do not dump the technology that have proven to help us to make way for new ones.
Dennis Jakobsen
Dear Mr Bonnet,
This is a splendid read - thank you.
Much of the discussions on disruption evolves around the strategic trends and how companies must up their game.
To me - the leadership challenge - the specifics of what is needed for c-suites and their reports - is a much overlooked topic.
How do you todays leaders handle this with/towards the organization?
Kind regards,
Dennis Jakobsen
The Business Leadership Academy