Six Digital Decisions Every Company Must Face
McKinsey & Company identifies six binary choices that determine whether a company thrives or stalls in a digital economy. None has a single right answer — each depends on context, competitive position, and appetite for risk.
6Critical decisions
20+Start-ups seeded by Merck Global Health
The Six Decisions
- Buy or sell? Digital disruption shrinks margins and rewrites competitive rules. Sephora acquired app developer Scentsa to lock out rivals; Home Depot redirected store-opening budgets toward fulfilment warehouses and Blinds.com.
- Adapt or abandon? Some incumbents rebuild their model entirely — one European real-estate brokerage opened its platform to competitors to become the dominant online marketplace. Others are better off stepping back from digital moves that would only cannibalize existing products.
- Compete or cooperate? Santander partnered with Funding Circle rather than build its own peer-to-peer lending platform from scratch. Capital One took the opposite route, launching CapitalOne Labs internally to defend its ground without external capital outlay.
- Spread bets or concentrate? Seeding many initiatives — then pruning ruthlessly — hedges against uncertainty. A single deep bet on data pooling with health insurers can also work, provided the data moat is genuinely defensible.
- Integrate or separate? John Lewis folded its online acquisition into its core business; Walmart deliberately kept its digital arm at arm's length to cultivate a distinct culture. Companies with diverse portfolios often blend both approaches.
- Hire a digital chief or let the CEO own it? A chief digital officer signals commitment but risks narrowing focus to marketing and social media. Direct CEO ownership of the digital agenda is warranted when transformation demands enterprise-wide resources.
Digitisation is not a project with an end date. Each of these decisions must be revisited as competitive conditions shift — and that demands sustained leadership attention at the top of the organisation.