Competing in the Age of AI: Strategy and Leadership When Algorithms and Networks Run the World
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- Create Date：2022-08-26 08:55:41
- Update Date：2025-09-07
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- Author：Marco Iansiti
- ISBN：1633697622
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Summary
In industry after industry， data， analytics， and AI-driven processes are transforming the nature of work。 While we often still treat AI as the domain of a specific skill， business function， or sector， we have entered a new era in which AI is challenging the very concept of the firm。 AI-centric organizations exhibit a new operating architecture， redefining how they create， capture， share， and deliver value。
Marco Iansiti and Karim R。 Lakhani show how reinventing the firm around data， analytics， and AI removes traditional constraints on scale， scope， and learning that have constrained business growth for hundreds of years。 From Airbnb to Ant Financial， Microsoft to Amazon， research shows how AI-driven processes are vastly more scalable than traditional processes， drive massive scope increase， enabling companies to straddle industry boundaries， and enable powerful opportunities for learning--to drive ever more accurate， complex， and sophisticated predictions。
When traditional operating constraints are removed， strategy becomes a whole new game， one whose rules and likely outcomes this book will make clear。 Iansiti and Lakhani:
Present a framework for rethinking business and operating models Explain how "collisions" between AI-driven/digital and traditional/analog firms are reshaping competition and altering the structure of our economy Show how these collisions force traditional companies to change their operating models to drive scale， scope， and learning Explain the risks involved in operating model transformation and how to overcome them Describe the new challenges and responsibilities for the leaders of these firmsPacked with examples--including the most powerful and innovative global， AI-driven competitors--and based on research in hundreds of firms across many sectors， this is the essential guide for rethinking how your firm competes and operates in the era of AI。
Reviews
Sagar Ladhwani
，
You know when you have OCD because of which you can't leave reading a book in the middle and then you come across one so bad that you wonder who you hate more - the writers for writing it or yourself for sticking to it。 This was one such torture！ This is a classical case of why academics should work with actual authors if at all they ever decide to write a book。 The book could have been cut by 80% if you take out the gazillion repetition of ideas。 Big paragraphs could be summarised in one liners You know when you have OCD because of which you can't leave reading a book in the middle and then you come across one so bad that you wonder who you hate more - the writers for writing it or yourself for sticking to it。 This was one such torture！ This is a classical case of why academics should work with actual authors if at all they ever decide to write a book。 The book could have been cut by 80% if you take out the gazillion repetition of ideas。 Big paragraphs could be summarised in one liners。 Barring a few places， everything is so surface level that you start wondering if you learnt anything new & interesting at all。There are some good case studies but skimming through the whole book to access them doesn't justify the time trade off。 I suggest you rather watch couple of YouTube videos on the same topic and you'll know more than you'd ever learn from this wordy， bland， shallow， torturously-long book！ 。。。more
Jonathan
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I enjoyed this professional development book as it combined the success of modern tech giants and their use of AI。At times the chapters were a bit wordy。 However， the diagrams and formatting allowed those sections not speaking to you to be skipped。
David
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Laden down with business jargon and buzzwords and focused on management theory， the book is rather sloppy with the language when describing the actual technology， freely using the terms "digital" "AI" and "Machine Learning" as interchangeable equivalents。 After an enthusiastic introduction touting the benefits of data analytics （which is hardly a new concept and has nothing to do with AI） and presenting an operating model for a "scalable decision factory"， the book gets somewhat lost in the weed Laden down with business jargon and buzzwords and focused on management theory， the book is rather sloppy with the language when describing the actual technology， freely using the terms "digital" "AI" and "Machine Learning" as interchangeable equivalents。 After an enthusiastic introduction touting the benefits of data analytics （which is hardly a new concept and has nothing to do with AI） and presenting an operating model for a "scalable decision factory"， the book gets somewhat lost in the weeds， presents some case studies to illustrate how great their ideas are that read like press releases （they divulge in the afterword that they have financial ties to just about every company mentioned）， then belatedly finishes up with a rather superficial discussion of security， privacy， and ethical considerations that just maybe should be part of the earlier planning phases and not an afterthought。 。。。more
alexander
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Decent overview of moreso the digital Revolution than the impacts of AI， which I found was rather summarily treated here， although there were some interesting insights regarding organisational behaviours and how best to utilise AI capability for competitive advantage。 Went a bit heavy on Microsoft without giving the reader much info into how they actually apply it， beyond the visible examples of Azure etc。
Jaume Sués Caula
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Fresh angle on how the competitive landscape will change when AI will transform business into platforms connecting customers with services。 Nice manual， as well， to adapt internal operations。
Petr Lorenc
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Not recommending！
Mitch Radakovich
，
An executive-level view on the impacts of new digital technologies on business， and an introduction to the strategies on how to compete in the new terrain。 As a data scientist， it is beneficial to see what the business experts at HBS are recommending， but it is quite frustrating to see how little time was put into actually explaining any of the technology。 It reminded me of some of the business classes I took during my undergrad- extremely high level， just enough to make decisions without being An executive-level view on the impacts of new digital technologies on business， and an introduction to the strategies on how to compete in the new terrain。 As a data scientist， it is beneficial to see what the business experts at HBS are recommending， but it is quite frustrating to see how little time was put into actually explaining any of the technology。 It reminded me of some of the business classes I took during my undergrad- extremely high level， just enough to make decisions without being fully informed。 Too often， data scientists hear people asking us to "do AI" on problems， having no idea what that would entail or if it is even possible。 I wish that books introducing business people to the premise of AI would take a bit more time on explaining what it actually is。 They don't need to teach the specific models or math behind it， but an introduction to what is possible would make a big difference。 The fact that classification and clustering are mentioned zero （0） times in the book is disheartening。 。。。more
Edurany
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I feel rather ambivalent about this book。 On the one hand， the book exposes relevant concepts in today’s business and tech world。 It also reads like a Harvard case study on many companies （Ant Financial， Uber， Google， etc） which I personally enjoy。 Conversely， this book didn’t feel to be about AI in business， but rather an effort to brand AI as the driving force behind most business strategy decisions because “digitalisation” sounds so 2000ish。 Most of the concepts in the book， such as economies I feel rather ambivalent about this book。 On the one hand， the book exposes relevant concepts in today’s business and tech world。 It also reads like a Harvard case study on many companies （Ant Financial， Uber， Google， etc） which I personally enjoy。 Conversely， this book didn’t feel to be about AI in business， but rather an effort to brand AI as the driving force behind most business strategy decisions because “digitalisation” sounds so 2000ish。 Most of the concepts in the book， such as economies of scale and learning， network effects， multi-homing are pretty basic and I would be surprised one wouldn’t know about this unless you’ve been in a coma for the last 20 years。 。。。more
Pavel Annenkov
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О ЧЕМ КНИГА:Книга дает устоявшимся компаниям и стартапам набор методик и фреймворков для понимания， работы и конкурирования в эпоху искусственного интеллекта。 Переход компании в эру ИИ - это не просто трансформация технологий управления， а появление совершенно другой компании на месте существующей сейчас。 Как создать такую компанию нам пошагово рассказывают авторы - профессора Harvard Business School。 Мысли и подходы из этой работы определяют бизнес в наступившем десятилетии。 Очень важная книга。 О ЧЕМ КНИГА:Книга дает устоявшимся компаниям и стартапам набор методик и фреймворков для понимания， работы и конкурирования в эпоху искусственного интеллекта。 Переход компании в эру ИИ - это не просто трансформация технологий управления， а появление совершенно другой компании на месте существующей сейчас。 Как создать такую компанию нам пошагово рассказывают авторы - профессора Harvard Business School。 Мысли и подходы из этой работы определяют бизнес в наступившем десятилетии。 Очень важная книга。Особенно интересно читать книгу сейчас， так как она была написана до Covida и видеть， что произошло с компаниями， бизнес-модели которых разбирают авторы。ГЛАВНАЯ МЫСЛЬ КНИГИ:Ни одна область человеческой деятельности не останется независима от искусственного интеллекта。 Постепенно ИИ проникнет во все занятия и дисциплины человека и для бизнеса настанет новый век。 Те компании и предприниматели， которые не перестроятся под новую реальность останутся на обочине или потеряют бизнес。Мы говорим сейчас не об изменениях в технологиях или о специфике работы определенных компаний。 Мы говорим сейчас， что вся экономика изменится под влиянием ИИ。ЗАЧЕМ ЧИТАТЬ ЭТУ КНИГУ？Чтобы получить методы для трансформации своей компании в ИИ компанию。МЫСЛИ И ВЫВОДЫ ИЗ КНИГИ:- ИИ уже встроен в большинство типов деятельности и процессов。 Мы просто его не замечаем， но уже не можем без него обходиться。- Цифровая копия бизнеса может учиться и улучшать саму себя， в отличии от аналогового и физического варианта。- Компании в основе бизнес-модели которых находится ИИ создают и поддерживают ценность， а также конкурируют совершенно другими способами， чем традиционные компании。- В традиционном бизнесе при увеличении его размера усложняются процессы и компания лимитирована в росте своей операционной моделью。 Сложность ухудшает бизнес。 В бизнесе， где в основе лежит ИИ и система полностью оцифрована， сложность не только не мешает， а помогает развитию компании。- Фабрика ИИ состоит из 4 компонентов:1。 Поток данных。2。 Алгоритмы。3。 Экспериментальная платформа。4。 Инфраструктура。ЧТО Я БУДУ ПРИМЕНЯТЬ:- Решая каждую задачу в бизнесе， буду задавать себе вопрос - «Как можно её оцифровать и использовать здесь ИИ？»ЕЩЕ НА ЭТУ ТЕМУ:Кевин Келли «Неизбежно» 。。。more
Joachim Viktil
，
Great insights and good cases！
Said
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Worth the read but I hope the authors can polish the book further in a future editionAt times， the book got extremely repetitive and boring （hence 4 stars） but I think it contains a lot of helpful information together with a nice perspective that tries to challenge some commonly held misconceptions about AI （and its incorporation into our daily lives）。 I think it's worth the read。 Worth the read but I hope the authors can polish the book further in a future editionAt times， the book got extremely repetitive and boring （hence 4 stars） but I think it contains a lot of helpful information together with a nice perspective that tries to challenge some commonly held misconceptions about AI （and its incorporation into our daily lives）。 I think it's worth the read。 。。。more
Eustacia Tan
，
Time to review another book on my MBA summer reading list！ I studied a bit about IoT during my undergraduate days， so this book on artificial intelligence （AI） sounded very interesting。Competing in the Age of AI is based on one premise: that “AI is becoming the universal engine of execution” and as such is “becoming the new operational foundation of business – the core of a company’s operating model， defining how the company drives the execution of tasks。” Because this is a fundamental shift in Time to review another book on my MBA summer reading list！ I studied a bit about IoT during my undergraduate days， so this book on artificial intelligence （AI） sounded very interesting。Competing in the Age of AI is based on one premise: that “AI is becoming the universal engine of execution” and as such is “becoming the new operational foundation of business – the core of a company’s operating model， defining how the company drives the execution of tasks。” Because this is a fundamental shift in business operating models， the authors say that companies must learn how to adapt。While I thought this book was a good refresher on the potential impact of AI on businesses， the book does seem a bit confused about who its target audience is。 Some basic concepts， such as disintermediation caused by technology and the impact of network effects are explained in detail， but others， like what the authors mean by AI， are barely touched upon。 Despite this being a book dedicated to artificial intelligence， the authors don’t spend more than a paragraph defining what they mean when they refer to AI。 At the start of the book， they reference that weak AI （by which they mean AI that can “perform tasks that were traditional performed by human beings”） is enough to make a huge impact， but the book also refers to unsupervised and reinforcement learning， as well as using AI to make predictions， which sounds more like strong AI to me。If this book is aimed at business people who are unfamiliar with the concept of AI and are likely to think of it as just another buzzword， it may have been beneficial for the book to spend some time explaining what they mean by AI。 It would also help if the writers made a clearer distinction between AI and machine learning， because the two terms seem to be used almost interchangeably。Putting aside the lack of clear definitions， I thought the middle sections of the book， on the AI factory， rearchitecting the firm， and becoming an AI company were interesting。 The book looks at Amazon and Microsoft’s transformations to show how established firms could transform their businesses and why they might want to do so and I found those sections to be interesting。And as you might imagine from the examples above， this book focuses on giant （often tech） companies。 The only example I saw of AI being used on a smaller scale was when the authors created an AI factory to help map out lung cancer tumours from CT scans。 But what about the applications of AI for smaller businesses， which may not have the capital to make large investments into technology or may not know if they are collecting enough data for AI to have an impact？ It does feel like most AI/ML/IoT projects are focused on making big companies bigger， rather than helping smaller firms compete （the exception I have heard of is that Industrie 4。0 was originally meant to help SMEs， but when I was studying it， it hadn’t moved past the big firms either）。Overall， this is an interesting book and people who are looking at the business impact of recent technology developments will probably want to read this。 Since Competing in the Age of AI was published in early 2020， most of the case studies are still relevant – I think the only thing I noticed was the absence of Jack Ma’s disappearance （and the implications of government interference in this area） from all discussions of Ant Financials and Alibaba。This review was first posted at Eustea Reads 。。。more
Aryaan Agarwal
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Nothing substantial learnt pretty basic info
Melanie Crisp
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Interesting book that gives an overview on the changing work landscape due to AI and the new skillsets needed to transition。
Ramon Nuez Jr。
，
Incredible book。 Paints a clear picture of the responsibility of leadership in the face of digital transformation。 Also， explains that companies and governments that do not adapt to the digital transformation will left behind。
Oliver S
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God bog med nogle spændende pointer。 Har fokus på， hvordan og hvorfor virksomheder bør organisere sig omkring AI。 Lidt langtrukken og med lidt ensartede eksempler。
Daniel Marino
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Marco Iansiti and Karim R。 Lakhani deliver the reader an in-depth analysis of the current state of AI in the workforce in addition to plenty of case studies of successes and failures across industries。 The authors prove themselves as experts in their field and explain clearly the different forms， uses， and impacts of modern artificial intelligence。 I believe this is an incredible read for any leader in modern business and any employee looking to enhance their skills or adapt to a rapidly evolvin Marco Iansiti and Karim R。 Lakhani deliver the reader an in-depth analysis of the current state of AI in the workforce in addition to plenty of case studies of successes and failures across industries。 The authors prove themselves as experts in their field and explain clearly the different forms， uses， and impacts of modern artificial intelligence。 I believe this is an incredible read for any leader in modern business and any employee looking to enhance their skills or adapt to a rapidly evolving professional world。 。。。more
Sergio Gago
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The book is basically 'AI is important'。 'Managers are stupid and don't understand it' and 'You just have to do the same as google， apple， Amazon and Alibaba 'With a few interesting notes that could have been summarized in a one pager。 But no real insights， or ideas on how to truly implement an AI centric organization The book is basically 'AI is important'。 'Managers are stupid and don't understand it' and 'You just have to do the same as google， apple， Amazon and Alibaba 'With a few interesting notes that could have been summarized in a one pager。 But no real insights， or ideas on how to truly implement an AI centric organization 。。。more
David Abigt
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Still holds up pretty well though most of the content is a few years old now and being about the quickly changing world of IT。 The audiobook version has added look back content where the authors discuss changes since the writing of chapters which helps。
Merlin Zuni
，
Good as an introduction to digital business practices。 If you are in a totally offline business model then this book will bring you up to speed。 Otherwise， there are other books a bit more advanced。
Asheesh Saksena
，
Knowledgeable WritingThis is an inspired tutorial。 Clear， specific and actionable。 Great read for anyone considering a digital transformation。 Bit verbose in the back half and skimming is an equally effective reading style。
Sean Dunlop
，
Really a brilliant overview for the （relatively） uninitiated in AI， digital organizations， and network effects。 Something for everyone， and really relevant/recent examples （read 05/2021）。
Rpetcavich
，
Timely ReadTerrific review of the digital transformation of society I would recommend this book to all wanna be entrepreneurs and senior executive
Christian
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If you work in tech then this book will offer nothing new。 It uses well-covered businesses like Netflix， Google and even Peloton to illustrate how AI is transforming businesses。 If you don’t work in tech then I think this book will be far too generalized to be actually useful。 For example， while Netflix is a perfect example of the emergence of AI， there’s almost nothing in that story that will be useful to any other business。This book also suffers from， well， being a book。 In the time it took to If you work in tech then this book will offer nothing new。 It uses well-covered businesses like Netflix， Google and even Peloton to illustrate how AI is transforming businesses。 If you don’t work in tech then I think this book will be far too generalized to be actually useful。 For example， while Netflix is a perfect example of the emergence of AI， there’s almost nothing in that story that will be useful to any other business。This book also suffers from， well， being a book。 In the time it took to research， write and publish， new advances have emerged in the creator economy and community-based business models。 In 2020 alone， new models have emerged that make even this book feel out of touch。 。。。more
Lanre Dahunsi
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In Competing in the Age of AI， Authors Marco Iansiti and Karim R。 Lakhani argue that reinventing a firm around data， analytics， and AI removes traditional constraints on the scale， scope， and learning that have restricted business growth for hundreds of years。 From Airbnb to Ant Financial， Microsoft to Amazon， research shows how AI-driven processes are vastly more scalable than traditional processes， allow massive scope increase， enabling companies to straddle industry boundaries， and create pow In Competing in the Age of AI， Authors Marco Iansiti and Karim R。 Lakhani argue that reinventing a firm around data， analytics， and AI removes traditional constraints on the scale， scope， and learning that have restricted business growth for hundreds of years。 From Airbnb to Ant Financial， Microsoft to Amazon， research shows how AI-driven processes are vastly more scalable than traditional processes， allow massive scope increase， enabling companies to straddle industry boundaries， and create powerful opportunities for learning—to drive ever more accurate， complex， and sophisticated predictions。The book describes the profound implications of artificial intelligence for business。 It is transforming the very nature of companies—how they operate and how they compete。 When a business is driven by AI， software instructions and algorithms make up the critical path in the way the firm delivers value。 This is the “runtime”—the environment that shapes the execution of all processes。Favourite Takeaways – Competing in the Age of AITransformation is about more than technology; it’s about the need to become a different kind of company。 Confronting this threat does not involve spinning off an online business， putting a laboratory in Silicon Valley， or creating a digital business unit。 Rather， it involves a much deeper and more general challenge: Rearchitecting how the firm works and changing the way it gathers and uses data， reacts to information， makes operating decisions， and executes operating tasks。AI DIsruptionAI is the “runtime” that is going to shape all of what we do。—Satya Nadella， Microsoft CEO”AI is becoming the universal engine of execution。 As digital technology increasingly shapes “all of what we do” and enables a rapidly growing number of tasks and processes， AI is becoming the new operational foundation of business—the core of a company’s operating model， defining how the company drives the execution of tasks。 AI is not only displacing human activity， it is changing the very concept of the firm。As such， the first truly dramatic implications of artificial intelligence may be less a function of simulating human nature and more a function of transforming the nature of organizations and the ways they shape the world around us。The Challenge AheadAI can render skills and talents obsolete， from driving a car to managing a traditional retail establishment。 Digital networks can alter and transform accepted approaches to social and political interaction， from dating to voting。 The broad deployment of AI could threaten millions of jobs in the United States alone。 And beyond the erosion of capability， threats to traditional skills， and other direct economic and social impact， we are increasingly vulnerable as an increasing portion of our economy and our very lives become embedded in digital networks。Rethinking the FirmAnt Financial employs fewer than ten thousand people to serve more than 700 million customers with a broad scope of services。 By comparison， Bank of America， founded in 1924， employs 209，000 people to serve 67 million customers with a more limited array of offerings。 Ant Financial is just a different breed。Business and Operating ModelsThe value of a firm is shaped by two concepts。 The first is the firm’s business model， defined as the way the firm promises to create and capture value。 The second is the firm’s operating model， defined as the way the firm delivers the value to its customers。 The AI factoryThe AI factory is the scalable decision engine that powers the digital operating model of the twenty-first-century firm。 Managerial decisions are increasingly embedded in software， which digitizes many processes that have traditionally been carried out by employees。Experience from Netflix and other leading firms underlines the importance of a few essential AI factory componentData pipeline:This process gathers， inputs， cleans， integrates， processes， and safeguards data in a systematic， sustainable， and scalable way。Algorithm development:The algorithms generate predictions about future states or actions of the business。 These algorithms and predictions are the beating heart of the digital firm， driving its most critical operating activities。Experimentation platform:This is the mechanism through which hypotheses regarding new prediction and decision algorithms are tested to ensure that changes suggested are having the intended （causal） effect。Software infrastructure: These systems embed the pipeline in a consistent and componentized software and computing infrastructure， and connect it as needed and appropriate to internal and external users。Capability FoundationsThe most obvious challenge in building an AI-centered firm is to grow a deep foundation of capability in software， data sciences， and advanced analytics。 Naturally， building this foundation will take time， but much can be done with a small number of motivated， knowledgeable people。Network vs Learning EffectNetwork effects describe the value added by increasing the number of connections within and across networks， such as the value to a Facebook user of having connections with a large number of friends， or access to a broad variety of developer applications。The most important value creation dynamic of a digital operating model is its network effects。 The basic definition of a network effect is that the underlying value or utility of a product or service increases as the number of users utilizing the service increases。Learning effects capture the value added by increasing the amount of data flowing through the same networks—for example， data that may be used to power AI to learn about and improve the user experience or to better target advertisers。MultihomingThe first and most important force shaping value capture is multihoming。 Multihoming refers to the viability of competitive alternatives， specifically to situations wherein users or service providers in a network can form ties with multiple platforms or hub firms （“homes”） at the same time。 If a network hub faces competition from another hub connecting to a network in a similar way， the first network hub’s ability to capture value from the network will be challenged， especially if the switching costs are low enough for users to easily use either hub。DisintermediationDisintermediation， wherein nodes in a network can easily bypass the firm to connect directly， can also be a significant problem for capturing value。 From Homejoy to TaskRabbit—that provides only a connection between network participants。 After the first connection is made， most if not all of the value created is delivered， and it’s difficult to hold a user accountable to the network hub for ongoing rents。Network BridgingNetwork bridging involves making new connections across previously separate economic networks， making use of more-favorable competitive dynamics and different willingness to pay。 Network participants can improve their ability to both create and capture value when they connect to multiple networks， bridging among them to build important synergies。Strategic CollisionsA collision occurs when a firm with a digital operating model targets an application （or use case） that has traditionally been served by a more conventional firm。 Because digital operating models are characterized by different scale， scope， and learning dynamics from those of traditional firms， collisions can completely transform industries and reshape the nature of competitive advantage。ConclusionWe live in an important moment in the history of our economy and society。 As digital networks and AI increasingly capture our world， we are seeing a fundamental transformation in the nature of firms。 This removes historical constraints on scale， scope， and learning and creates both enormous opportunity and extraordinary turbulence。 But despite all this newfound digital automation， it seems that we can’t quite do away with management just yet。The challenges are just too great， too complex， and too amorphous to be solved by technology （or technologists） alone。 But leading through these changing times will require a new kind of managerial wisdom， to steer organizations from full-scale firms to new ventures， and from regulatory institutions to communit 。。。more
Damon T。
，
Excellent book providing great perspective on the impact of digitalization and AI。 It's already impacting me on my approach to our business。 Excellent book providing great perspective on the impact of digitalization and AI。 It's already impacting me on my approach to our business。 。。。more
Andy Hunn
，
An important bookWhile I generally find books of this kind are often re-hashes of the obvious， in fairness I have to say that this book covers important ground and will be viewed as a seminal work marking its period in time in technology just as “Crossing the Chasm” and “Innovator’s Dilemma” did。 Work past rehashes of the obvious companies leveraging network effects and digitization of processes to gain scale and profitability and there is still much to gain by pausing and digesting the implicat An important bookWhile I generally find books of this kind are often re-hashes of the obvious， in fairness I have to say that this book covers important ground and will be viewed as a seminal work marking its period in time in technology just as “Crossing the Chasm” and “Innovator’s Dilemma” did。 Work past rehashes of the obvious companies leveraging network effects and digitization of processes to gain scale and profitability and there is still much to gain by pausing and digesting the implications of what’s to come with digital transformation。 。。。more
Zaved
，
If you are transforming a business a must read！ Brilliant and simple read！
Alex Susma
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Excellent insights， pertinent to employees， managers， leaders who want to be ready for today's and tomorrow's challenges。 Excellent insights， pertinent to employees， managers， leaders who want to be ready for today's and tomorrow's challenges。 。。。more
Rick Wilson
，