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Emerald Group Publishing Limited
Copyright © 2001, MCB UP Limited
I'm sure you've heard the phrase, "rearranging the deckchairs on the Titanic." It's a metaphor for useless activity. In his book, The Electronic B@zaar (Nicholas Brealey, 2000), Robin Bloor invokes this metaphor as he challenges those who are still in denial about the impact of the Internet and electronic commerce on their businesses. In comparing the Internet to an iceberg, he notes that they are both very large, and only one-tenth of them are visible. But unlike an iceberg, the Internet will not melt and disappear; it will only grow larger.
In this issue of Strategy & Leadership, our discussion goes beyond the use of the Internet for e-commerce to discuss the impact of digital communication on all aspects of a business. The digital effect is pervasive. It will affect distribution channels, process design, information flows, and consumer attitudes. It will create new businesses and make others obsolete. Can any strategic leader afford not to pay attention?
On the following pages, we have assembled some of the leading thinkers on the impact of digitization on business strategy. They offer their insights to stimulate your thinking and to point the way to success in the digital economy.
Adrian Slywotzky and David Morrison lay the groundwork for becoming a digital business. Their Digital Business Design focuses not on technology, but on the possible outcomes technology affords – creating unique value propositions, leveraging talent, serving customers, vastly improving productivity, and increasing and protecting profits.
Clay Christensen, in an interview with Dan Knight, explains why so many business leaders become blind-sided by disruptive technologies. He underscores the importance of embracing such technologies, even if they are disruptive to the current business model, as a way of ensuring future success.
Russ Thomas addresses the issue of financial analysis and decision-making related to long-term, cross-functional, organizational transformation projects. He suggests using business value analysis (BVA), an assortment of techniques which address the uncertainty that is inevitably a part of long planning horizons, in combination with the more traditional discounted cash flow method.
Pierre Mourier presents a method business leaders can use to help them make better decisions, faster. Creating an organizational "instinct" for responding to change helps companies remain competitive in a fast-moving, information-driven, global economy.
Gerald Kraines focuses on leveraging the full potential of everyone in the organization. Neither command-and-control nor laissez faire, his four-part process, L.E.A.D. (leverage, engage, align, develop), provides a blueprint for achieving outstanding performance at every level of the firm.
And don't miss IdeaFile in which Slywotzky and Morrison offer an exercise you can use to evaluate how digital your business is today.
In his book The Mind of the C.E.O. (Perseus, 2001), Jeffrey Garten includes a quote from Henry Paulson, chairman and CEO of the Goldman Sachs Group: "We've got to integrate the Internet into our basic business. It's no different than the telephone ... it's basic plumbing." That's the message our authors are trying to convey. The digital world brings with it challenges to every part of an organization. But it also provides us with technological tools to meet these challenges. Now is the time to find out if your company is thinking digital. Read on and learn what you can do to make your business a digital winner.