McKinsey on Digital Strategy

Digital strategy: The four fights you have to win  By Tanguy Catlin, Laura LaBerge, and Shannon Varney   in McKinsey

Yesterday’s tentative approaches won’t deliver; you need absolute clarity about digital’s demands, galvanized leadership, unparalleled agility, and the resolve to bet boldly.

If there’s one thing a digital strategy can’t be, it’s incremental. The mismatch between most incumbents’ business models and digital futures is too great—and the environment is changing too quickly—for anything but bold, inventive strategic plans to work.

Unfortunately, most strategic-planning exercises do generate incrementalism. We know this from experience and from McKinsey research: on average, resources don’t move between business units in large organizations. A recent book by our colleagues, Strategy Beyond the Hockey Stick, seeks to explain what causes this inertia (strategy’s social side, rooted in individual interests, group dynamics, and cognitive biases) and to suggest a way out (understanding the real odds of strategy and overhauling your planning processes to deliver the big moves that can overcome those long odds).

All this holds doubly true for digital strategy, which demands special attention. Leaders in many organizations lack clarity on what “digital” means for strategy. They underestimate the degree to which digital is disrupting the economic underpinnings of their businesses. They also overlook the speed with which digital ecosystems are blurring industry boundaries and shifting the competitive balance. (For more on why companies often fall short, see “Why digital strategies fail.”) What’s more, responding to digital by building new businesses and shifting resources away from old ones can be threatening to individual executives, who may therefore be slow to embrace (much less drive) the needed change. .... "