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| | Brought to you by Alex Panas, global leader of industries, & Axel Karlsson, global leader of functional practices and growth platforms
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| | In honor of the 60th birthday of McKinsey Quarterly, the firm’s flagship publication, the McKinsey Classics newsletter will be dedicated for a full year to classic Quarterly articles that were ahead of their time. Plus, we’ve refreshed Classics to better help readers connect these timeless insights to our latest, leading-edge thinking. Enjoy the changes—and be sure to sign up for a free McKinsey Quarterly digital subscription for special themed issues and bonus digital features, including compilations of Quarterly classics formerly available only in print..
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| | | The tech opportunities for today’s organizations are alluring. Businesses are racing to capitalize on the proliferation of technologies like generative AI, and with more data at their fingertips than ever, the potential to transform the business through tech seems vast. But companies looking to make digital hay need to play their cards right, otherwise they risk falling into the same traps that befuddled business leaders of yore have faced with earlier digital disruptions. That was certainly the story for the companies represented in this 2018 McKinsey Quarterly classic: only 8 percent of surveyed respondents said their companies’ current business model would remain economically viable through digitization.
What to do? Taking the right digital path means avoiding five critical missteps. The first is not having a clear vision of what digital really means and thus failing to connect a digital vision to that of the broader business. The second is not recognizing how digital is upending core economic principles. For example, customers are increasingly gaining value from digital, while companies’ profit pools are shrinking; the economic power curve is only getting steeper, making it more challenging to maintain market share; and above all, digital rewards fast movers—companies that develop a learning advantage quickly can outcompete their peers.
To learn about the other pitfalls that stymie companies’ digital efforts, read Tanguy Catlin and coauthors’ “Why digital strategies fail.”
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| | Read our latest thinking on this classic topic
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| | — Edited by Drew Holzfeind, editor, Chicago
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