Christian Dussart and Timothy Rowe

December 2001, MIT Sloan home page

Two-thirds of all major corporations have replaced their CEO's at least once since last year, according to experts, and more than 1,000 CEOs of known companies left office during the past year.

In many of these cases, leaders failed to identify and manage the evolution of their business models in the face of emerging digital technologies.

So-called “disruptive innovations” have, indeed, changed the business landscape, and MIT Sloan is training its students to be prepared. The school this fall launched the new Digital Business Strategy Track to give students the skills to guide corporations amid disruptive change.

“Disruptive innovations challenge existing business models and can knock market leaders out of position,” says Christian Dussart, a senior marketing lecturer and co-director of the track. “Students in the Digital Business Strategy Track learn how to manage changes brought about by various disruptions and adapt business models accordingly.”

The track's name reflects the central importance of strategy when considering digital innovations: the real challenges for business are not technical, but strategic.

The track is financially supported by the MIT Center for eBusiness, a leading center for research in this field.

New vulnerabilities

As we enter the birth of a real economy, implementation, feasibility, and profitability are key concerns. It is an economy where business models are often the key to success or failure.

With new digital innovations emerging nearly every day, business models of even the most venerable companies are vulnerable. Inability to react to these changes puts senior management at risk.

Large companies must manage an evolution and avoid a revolution. The question is how to properly integrate digital business within existing business models, managing the high degree of complexity involved.

Victims of disruptive digital innovations litter the business landscape:

  • Digital photography has eroded the profits and viability of companies like Polaroid and Kodak.
  • Digital video recorders (DVRs) — which require no tape medium, allow ads to be skipped, and allow TV shows to be transmitted via the Internet — threaten the business models of pay-for-view TV programming.

Opportunity abounds

Corporate leaders are searching for answers, and the market is ripe for graduating MBAs expert in not only digital innovations but also managing change.

“Whether they're technologically focused or not, companies are looking for individuals who can solve the problems brought about by these disruptions,” says Tim Rowe, co-director of the track. “The best opportunities for our students are at companies experiencing rapid change, or those currently being challenged by these disruptions.”

MIT Sloan students get practical experience tackling disruptions.

This year a group of students has been invited to travel to London to study problems facing British Telecom (BT). Ubiquitous cellular phones have rendered BT's public phones virtually unnecessary in modern life.

Through such projects students can explore new ways to combine innovation and business strategy to solve a problem.

In the new business climate, business leaders are sure to be tested by unforeseen, often technology-driven challenges, like those facing BT's public telephone division.

The Digital Business Strategy Track is readying students to meet those tests.

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Kofi Annan, SF '72, former Secretary-General of the UN, is one of a network of global leaders in government and industry who hold degrees from MIT Sloan.