Anxious boards around the world are asking their CEOs: “What exactly is our digital strategy?”
That has very quickly become the most relevant—and the most loaded—question you’ll hear in pretty much any board meeting. A minority are answering it well, but most are struggling.
All companies feel mounting pressure for a change of business model to keep the business from becoming redundant in the digital economy and to continue growth. They are trying to understand how to change that model in reaction to shifting macroeconomic trends, and unlock opportunities to increase profits, grow the customer base, and become more productive.
The question that perhaps is not being asked as often in boardrooms is: “Will this ever slow down?” In truth, no one knows, but the likelihood is that this constant change and forced business reinvention will continue on a path of relentless acceleration.
Microsoft’s acquisition of LinkedIn last week is a perfect example of the dizzying pace at which businesses are expected to make enormous decisions that will determine their future. Microsoft spent $26BN, a 50% premium, on a company some would argue is on the ropes after a weak Q1.
Microsoft is simply reacting to the pace of change by acting fast, thinking big, and trying to get ahead of the game. It might be comforting, or possibly anxiety-inducing, for boardrooms to know that even a cutting-edge company like Microsoft must to make huge decisions on-the-fly and constantly evolve its business model to keep growing.
The investment is certainly not guaranteed to pay off, but that’s the reality we face in today’s digital world, in which every industry feels the disruption.