Many Companies Still Don’t Know How to Compete in the Digital Age

The nature of disruption is changing. In the past, disruption occurred at the level of discrete product and service technologies that competed to offer better value for customers (e.g., 2.5-inch vs. 3.5-inch disk drives; LCD vs. CRT television; online vs. brick-and-mortar banks). Today, it is occurring at the level of ecosystems.

The Internet of Things is a good example of this change. Every industry, no matter how traditional — agriculture, automotive, aviation, energy — is being upended by the addition of sensors, internet connectivity, and software. Success in this environment will depend on more than just creating better digital-enabled products; it will depend on building ecosystem-level strategies that encompass the many moving pieces that come together to create the new value proposition.

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