Insights

(Source: BCG)

In what feels like a minute, the world has gone massively digital. People are doing everything online because of COVID-19, and the strain is showing. To the extent that the global economy is running, it’s doing so on digital sales and distribution. In Europe, performance levels of videoconferencing platforms plunge the minute the US wakes up and goes to work. And besides testing the limits of existing infrastructure, the virus has got tech talent working around the clock.

It’s inevitable that companies looking for ways to counteract the effects of the pandemic on their operations will ask their technology function to bear part of the burden. But they must be strategic about any shifts made to the tech workforce. To ensure that vital digital services remain up and running, organizations must do everything possible to protect mission-critical talent. By showing their support now, companies can create goodwill that will carry over to when better times return.

(Source: BCG)

A lot of ink has been spilled telling the stories of companies felled by digital disruption— think Kodak or Blockbuster. What gets far less attention is the way traditional incumbents are winning at the digital game. For companies like Starbucks, John Deere, and Unilever, digital is driving new sources of competitive advantage, growth, and value creation. Incumbents have huge advantages—resources, customer relationships, and global scale, to name just a few—that when tied to the right digital strategy give them the edge over smaller rivals.

In our experience, successful digital transformation must rest on a foundation of smart digital strategy. And smart digital strategy, like traditional business strategy, is about making wise investment choices to maximize competitive advantage, growth, profit, and value—and then implementing with discipline.

(Source: BCG)

Incumbent businesses are right to be paranoid about the expanding impact of technological disruption. Of the top ten global companies by market capitalization a decade ago, only two have maintained their positions; many of the rest were replaced by digital natives. And we expect the list ten years from now to be at least as different from today’s: we know that only one-third of companies faced with industry disruption thrive, while the remaining two-thirds languish or fail. It is not surprising, then, that incumbents in many sectors are engaged in extensive digital transformation efforts in an attempt to inoculate themselves against the threat of disruption.