Leaders face a world of new and demanding customer expectations, of true two-way relationships in which customer feedback is instantaneous and can reshape a company’s business with virtual immediacy. Customers will in essence be viewed as key components of a firm’s human resources. Their goodwill and loyalty will constitute rich forms of investment for the high-performing companies in the Digital Age.

Competition will only intensify. The shelf life of market strategies is shortening. Technology and global players are driving products and services ever more rapidly through their life cycles. This morning’s innovation becomes this afternoon’s commodity. As a result, rapid-fire innovation will rank high on the list of strategic capabilities. All the successful firms in this century will possess a depth of entrepreneurial capability. This capability will be built around the investments firms have made in resources, cultural values, and talent dedicated to strategic innovation and leadership. This capability will remain in high demand, thanks to empowered consumers and technologies that allow more rapid product prototyping and production. The dilemma for many managers is that management’s time and attention tend to be dedicated to solving today’s problems rather than to addressing tomorrow’s opportunities. Many organizations make the mistake of putting their best people in charge of only problems, and not opportunities. Those who reverse the pattern will prevail in the marketplace.

A company’s network of external relationships will also prove to be an absolutely critical competitive advantage. Business in this century will be network-centric, and partnerships and alliances play pivotal roles in day-to-day operations. In contrast to the Industrial Age, in which companies sought strategic advantage by vertical integration, companies today seek strategic advantage horizontally. A critical trademark of high-performing firms, therefore, will be their ability to build powerful networks. These firms must be savvy about the partners which will help them acquire capabilities and knowledge, and hence foster access and reach. Alliance management will take center stage among a company’s strategic competencies. But all partnerships are formed around mutual benefits. Therefore, leaders must make their companies equally attractive dance partners or be left on the sidelines.
 
Go to Chapter 4 - Strategic Change and Transformation