Idea in Brief

The Problem

Established companies spend billions trying to turn themselves into digitized orchestrators of some new ecosystem, only to fall flat on their faces.

Why It Happens

The CEOs believe that the existential threat posed by digital disrupters requires a gigantic, model-busting response.

The Solution

Adopt an incremental experimental approach: discovery-driven digital transformation. Look for problems to fix with digital technology, but exploit your rich knowledge of customers, broad operational scope, and deep talent pools while learning your way to a new business model.

What’s your digital strategy? That simple question often throws the CEOs of traditional companies into a panic. They believe that digital technologies and business models pose an existential threat to their way of doing business—and of course they’re right. But the pressure they feel often leads them to make big bet-the-farm moves—and that’s usually wrong.

A version of this article appeared in the May–June 2020 issue of Harvard Business Review.