Strategy

Responding to a recently published essay, an MIT SMR reader pushed back against the view that managers must prepare for radical and rapid change in a digital world; he argued that this position may be overly alarmist. The discussion continues.

Executives often look at the network effects of digital platforms as a key source of competitive advantage — without understanding that platforms need to also leverage other factors at play in the local markets and among preferred customers. Network effects can help, but on their own, they offer very limited competitive value.

Companies today will have to reinvent themselves to survive, and every large and ambitious company should be trying to figure out how to become a destination for its customers. Consumers are voting with their mobile devices and choosing from a handful of dominant “ecosystem drivers”— businesses such as Amazon and WeChat, which become destinations for their customers’ needs by offering complementary or sometimes competing services — for each domain in their lives.

Cybersecurity can no longer be the concern of just the IT department. Within organizations, it needs to be everyone’s business — including the board’s.

Lurking within the financial statements and communications of public companies is a troubling trend. Alternative metrics, once used sparingly, have become increasingly ubiquitous and more detached from reality.

Organizations often struggle with corporate strategy because executives lack clarity on how the parts of the corporation fit together. Without a shared understanding of the relationships between headquarters and business units, executives risk talking past one another when discussing strategy.

Effective strategic guidelines get three things right. They link to the corporate vision, identify critical vulnerabilities, and focus on what matters most.

Throughout the 20th century, autos and the auto industry propelled human development, bringing unrivalled utility and flexibility to the way people move. Yet the industry now faces fundamental disruption as vehicle ownership yields to on-demand mobility.

Businesses develop strategies to address complex, multi-layered business environments and challenges — but to execute a strategy in a meaningful way, it must produce a set of specific actions focused on achieving clear goals. Rather than trying to boil the strategy down to a pithy statement, executives will get better results if they develop a small set of actions that everyone gets behind.

Chinese companies are increasingly investing in companies overseas. But to reach advantageous agreements with Chinese direct investors, Western managers need to prepare themselves for differences in negotiating style.