This is an MIT Sloan Management Review article. There are four different pathways that businesses can take to become top performers in the digital economy. Leadership's role is to determine which pathway the company should pursue -and how aggressively to move.

This is an MIT Sloan Management Review article. Companies today will have to reinvent themselves to survive, and every large and ambitious company should be trying to figure out how to become a destination for its customers. Consumers are voting with their mobile devices and choosing from a handful of dominant "ecosystem drivers"-businesses such as Amazon and WeChat, which become destinations for their customers'needs by offering complementary or sometimes competing services -for each domain in their lives.

This is an MIT Sloan Management Review article. The business world is rapidly digitizing, breaking down industry barriers and creating new opportunities while destroying long-successful business models. Given the amount of turmoil digital disruption is causing, authors Peter Weill and Stephanie L. Woerner of the MIT Center for Information Systems Research say it's time for companies to evaluate these threats and opportunities and create new business options for the more-connected future of digital ecosystems. In recent research, board members at large companies estimated that 32% of their company's revenue would be under threat from digital disruption in the next five years; 60% of board members felt their boards should spend significantly more time on this issue next year. Despite the threats from companies including Uber, Airbnb and Amazon, increasing digitization offers opportunities for companies to leverage strong customer relationships and increase cross-selling, the authors argue. The authors offer a framework, supported by examples, for helping managers think about their competitive environments. "The combination of moving from value chains to ecosystems and increasing consumer knowledge,"the authors write, "provides business leaders with four distinct business models, each with associated capabilities and relationships."Companies can choose to operate as (1) suppliers, (2) omnichannel businesses, (3) modular producers or (4) ecosystem drivers. The authors found that businesses focused narrowly on value chains were at a disadvantage compared with those that thought more broadly about their business ecosystems. Companies that had 50% or more of their revenues from digital ecosystems and understood their end customers better than their average competitor saw 32% higher revenue growth and 27% higher profit margins than their industry averages.

As businesses have entered new geographies, developed new products, opened new channels and added more granular customer segments, they have made their offerings more complex with the intention of adding value. But, as a seemingly inevitable consequence, companies also have made it more difficult for customers to interact with them and more unwieldy for their employees to get things done. For organizations, there has thus been a trade-off between good and bad complexity. In the digital economy, however, companies can finesse this trade-off and increase value-adding complexity in their offerings while keeping processes simple for customers and employees. Consider Amazon.com Inc.'s 10 million products, which create value without confusing customers, thanks to simple customer-facing processes that use digital tools such as search, recommendations, customer reviews and seller ratings to help site users choose among the many available products. Another example is Royal Phillips, which uses and reuses digitized platforms -and is able to offer locally differentiated products in 60 categories in more than 100 countries. The authors explain how companies can achieve their "complexity sweet spot"in the digital age -that is, the maximum value from varied and integrated product offerings with the simplest processes. The authors'research suggests that companies operating in this complexity sweet spot outperform their industry competitors on profitability. There are several routes to the sweet spot. One of the biggest decisions is who will lead and manage a company's complexity, as no one executive (save the CEO) really oversees all product and service development and operations. Whoever is leading a company's search for the complexity sweet spot needs to lead a cultural change to embed complexity management into the company's DNA. The good news, according to the authors, is that there are almost always quick wins, and the rewards are, well, sweet.

This is an MIT Sloan Management Review article. A company's digital business model describes how the enterprise interacts digitally with its customers to generate value. The authors argue that it's time for companies to create a great digital business model before their customers leave them behind. A great digital business model will often challenge the status quo in the company: It can cause an organization to change how work gets done, who does the work and where it invests to best serve customers online. A digital business model often cannibalizes or changes the company's physical channels. And that is true whether the company is a born-on-the-Web company like Amazon, a large oil company or a local business just starting to focus on the best way to connect with customers online. The authors have created a framework to help enterprises compete digitally with three capabilities: their content, customer experience and platform. They illustrate the framework with case studies of top performers like Amazon, Apple, LexisNexis and USAA and results from an effective practices survey. They also include a self-assessment tool to help with next steps.

Describes Rob Waldron's actions upon assuming leadership of SCORE! Educational Centers, an after-school tutoring enterprise. Examines the issue of acquiring and growing a small, privately-owned company into a professional organization, especially regarding corporate culture. Describes the measures Waldron takes to build a culture and how he maintains the culture after the acquisition. Focuses on Waldron's actions in dealing with a growing employee morale problem. Concludes with Waldron deciding whether or not to alter the company's recruiting strategy. Includes SCORE! background material. A rewritten version of an earlier case.

In February 1995, the National Association for the Advancement of Colored People (NAACP), the largest civil rights organization in the United States, was in the midst of a crisis. The executive director had been fired due to financial improprieties amid charges of sexual harassment. Immediately thereafter the board chairman came under fire as well. In a very close vote, Myrlie Evers-Williams, a long-standing board member, was elected the new board chair. She found herself leading an organization with severely diminished credibility and support, precarious finances, and a fractured board of directors. The case raises issues regarding board oversight, governance structure, and crisis leadership in a nonprofit setting.

The Historical Society of Pennsylvania (HSP) runs one of the nation's most important research libraries and a museum focusing on colonial history. Financial analysis shows that the society has absorbed increased costs of operation over the past decade through slow but steady depletion of its endowment and deferment of capital investments. Now the board is faced with three options: 1) continue to operate both the research library and the museum on a dwindling resource base; 2) continue to operate the research library, but deaccess the museum, using proceeds to fortify the research library; and 3) continue to operate the research library, but turn over the artifact collection to a new Philadelphia-wide museum to be created in collaboration with three other organizations.