The dramatic rise of China’s digital leaders has put the squeeze on Western internet giants. Western players must learn quickly if they are to get back in the game in the world’s fastest growing digital market.

The art of bian lian — or “face changing” — is integral to Sichuan opera: A main character changes masks to avoid capture by foes. The transformation is quick and surprising, the new face clearly different. In the theater of business, Chinese performers are undergoing a rapid transformation of their own as they seek to evolve from backroom producers to the world’s leading face of innovation.

Emerging technology and new business models have created new ways of serving customers and allowed digital leaders to disrupt traditional companies. Disruption rarely comes out of nowhere, however: There are common patterns to learn from and three major signals to recognize in evaluating the risk for your industry.

Technology-intensive product manufacturers, automakers, or white goods makers used to be able to capitalize on their longstanding engineering and design leadership to cement their positions. But that’s no longer the case. Today, young upstarts in many product segments, especially from China, can develop world-class design and production capabilities in a short period of time. In some cases, they are closing gaps with long-established incumbents and becoming market leaders within a decade.

When pundits talk about the impact that artificial intelligence will have on the labor market, the outlook is usually bleak, with the loss of many jobs to machines as the dominant theme. But that’s just part of the story — a probable outcome for companies that use AI only to increase efficiency. As it turns out, companies using AI to also drive innovation are more likely to increase headcount than reduce it.

Virtually all human achievements have been made by groups of people, not lone individuals. As we incorporate smart technologies further into traditionally human processes, an even more powerful form of collaboration is emerging.

Businesses should use AI technology as a tool to improve customer service and processes, not just to imitate humans.

AI can do much more than augment human performance in the workplace.

As digital disruption expands, many legacy businesses seek partnerships with tech companies to maintain competitiveness in the digital sphere. But instead of a centralized “hub” partnership, some companies find greater success through an adaptive ecosystem model, where partners develop significant projects or innovations together. This type of strategy requires imagination and flexibility.

Some techies think that blockchain and “tamperproof databases” will revolutionize more than money: A blockchain platform for the energy sector could accelerate the transition to renewables. Blockchain can help by making tracking energy more granular, automated, and trusted, which can allow companies to better verify claims of carbon neutrality. It could also streamline financing and insuring new energy projects and even help create a new kind of energy market.

Giving people time and resources to pursue innovation projects can produce extraordinary outcomes — but only if you match your “slack strategy” to employee type. The authors found that different types of employees respond in different ways to slack innovation programs; that different kinds of slack resources are better suited to certain types of employees than others; and that different kinds of slack innovation programs produce different kinds of innovation.

Barbara Goose, CMO at John Hancock, cites thinking like a startup and encouraging employees to pursue “hybrid roles” as key to the organization’s successes at digital transformation.

Lindsay Sutton, AVP and digital strategy lead at John Hancock Financial Services, Inc. talks with MIT SMR guest editor Gerald C. (Jerry) Kane about the mindset required to prioritize digital transformation.

Managers in less autonomous companies should learn from — and be wary of — the trend toward autonomous companies.

Companies used to spend years clarifying business requirements before they would even think of launching new software. Today, cheaper cloud-based apps mean that implementation decisions are made on the fly — and there’s no going back.

Companies can enhance their employees’ creativity and boost innovation by learning from the Maker Movement’s emphasis on creative learning, collaboration, fluidity, and novel play.

As the digital revolution rages on, every business leader must become technology literate. This guide provides executives with an introduction to the technologies that are transforming our world.

A key takeaway of our exploration of the digital thread is that continuous learning and performance enhancement via technology are all based on the feedback that real-world experience provides.

In Part 8 of our eight-part video series, we examine how the digital thread — and its companion, the digital twin — could revolutionize not only the way we design and develop products, but the way we manufacture and service them as well.

In Part 7 of our eight-part video series, we take a big-picture perspective on the steps involved with the digital thread.