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Strategic Principles for Competing in the Digital Age
Authors Martin Hirt and Paul Willmott detail several critical decisions that leaders must make to address strategic challenges posed by what the authors refer to as “the digital revolution.” One of the most pressing is whether to lead your members and clients into digital areas or to apply the brakes. In some situations, the right strategy is to act before a competing organization does. In other cases, the right decision may be to forego digital initiatives.

Another necessary decision, the authors write, is whether to "diversify or double down on digital initiatives." As digital opportunities and challenges proliferate, deciding where to place new bets is a growing concern for business leaders. Diversification can certainly reduce risks, but Hirt and Wilmott caution that there is a risk in "letting 1,000 flowers bloom." Often, a multitude of smaller initiatives do not get enough funding or attention to endure. One solution is to think like a private-equity fund. This entails seeding multiple initiatives, while being disciplined enough to kill off those that don't quickly gain traction.

Advancing an organization's digital agenda takes a lot of senior management time and attention. The best digital strategies call for extensive, cross-functional orchestration that may require involvement by top executives. In some cases, organizations are creating a new chief digital officer position to better manage such tasks and initiatives. Alternatively, organizations should at least invest time to define and implement a strategy that outlines its goals related to harnessing digital-generated opportunities. In conclusion, the authors write: "The emergent nature of digital forces means that harnessing them is a journey, not a destination—a relentless leadership experience and a rare opportunity to reposition companies for a new era of competition and growth."
McKinsey Quarterly (05/14) Hirt, Martin; Willmott, Paul
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SEPTEMBER 2014 EDITION
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