Digital transformation is the leading force affecting industries around the world, and it has been so for years. Several generations of business transformation, from the rise of data volumes and adoption of cloud-enabled remote work to the increased use of GenAI and beyond, have come with digital innovations.

Organizations that have failed to change alongside their industries have risked falling behind competitively within the digital economy. Businesses that can make new trends work for them are better able to thrive and take leadership of their sectors and please key customer segments by pivoting to new business models.

It's important to clarify that digital business model adoption doesn't mean chasing trends. Rather, it's about each company finding a unique business model that differentiates it and makes the best possible use of the latest strategic and technical developments. Becoming adept at discovering and implementing these models is a relevant skill set in a business world that never slows down, and courses such as MIT Executive Education's Digital Strategies for Transforming Your Business help you pick up the necessary knowledge.

What is a digital business model?

A digital business model is an approach to your company's products, services, corporate culture, organizational structure, and more. It reflects the current, digitally driven era of business.

A good digital model both suits the modern world and has one eye on what's next, providing a future-proof evolutionary path. Asking what's next rather than catching up with previous developments can be a strong rule of thumb in digital development.

Adopting a digital business model doesn't just mean that your company is upgrading its technology to implement cloud-based systems, artificial intelligence, or other pillars of recent digital development. It also involves creating a whole new digital ecosystem within your walls to support and suit that digital technology, creating a symbiotic relationship between tech capabilities and everyday practices.

These strategic changes aren't simple tweaks. Your organization should be prepared to rethink even the ways it offers its products or services to the public, or its structure. The traditional value chain that connected companies with their audiences in a pre-digital world may no longer be up to the challenge of serving today's customer needs, and the longer companies remain tethered to those value chains, the more trouble they may have catching up.

See more: Watch a webinar on the ways organizations are navigating toward a digital future.

Why is it so important to have a digital business model?

The larger forces that shape today's markets make it difficult for companies to survive if their business models have fallen out of date. These underlying stressors include:

• A changing competitive landscape: Competitiveness may be determined by factors far outside of traditional concepts of strength and tenure. Established companies that are hampered by extensive tech debt and outdated practices may fall behind younger, more agile rivals. The crux of digital disruption lies in forces that make a traditional business model unworkable.
• The digitization and convergence of products and services: Digitally driven commerce models are so prominent that the idea of a "product" is breaking down somewhat. Selling items on a subscription model and digitizing transactions that were once carried out in physical spaces are some of the trends driving companies into new forms.
• The need for resilience against disruptive events: Following an era of globalized trade and fast-paced digital communication, companies are left with extended supply chains that contain vulnerabilities. Communication remains fast as ever, but rapid geopolitical realignments, natural disasters, and large-scale occurrences like the COVID-19 shutdowns continually display the need for resilience.

From cloud computing to advanced automation, companies around the world have taken advantage of digital technologies to adjust to these trends. When those companies also fail to adapt their practices and processes to make full use of those technologies, however, they may not take optimal value from the technology.

This division between companies — some adapting and others not — provides an opportunity for ambitious business leaders to pilot their businesses to the head of their respective field.

Read more: Six questions that can guide your organization through digital transformation.

How do you adapt your business model for the digital age?

As a leader hoping to keep up with rapid changes in digital technology and consumer preferences, you need to be ready to inspect, assess, and potentially change your:

• Current operational model.
• Company culture.
• Underlying assumptions.
• Everyday business practices.
• Coordinating mechanisms.

Rebuilding your company for the digital era and building a next generation enterprise means rethinking your business logic, your value proposition, and the way you provide your offerings to your customer base. Through these changes and evolutions, you can keep one important concept as your North Star in the digital landscape: You need to come up with innovative ways to serve your audience.

This principle has proven to be transformative in fields such as banking and finance. Established companies that remained unable to bring their legacy systems into the digital, mobile app era began to fall behind their younger and more agile competitors in terms of customer experience.

Those that asked early on how they could serve users' desire for more convenient interactions on digital channels were well-positioned for the evolution to come, while others couldn't shift away from their existing business model quickly enough to offer a digital service.

See more: Watch a webinar on what modern business models look like.

How executive education applies to business model transformation

With digital transformation serving as a core value for companies in today's digital landscape, it's worth asking how you can develop the necessary leadership mindset. Fortunately, industry experts have codified the concepts behind digital business model adoption into an executive education curriculum, allowing you to approach these ideas directly.

Taking MIT Executive Education courses such as Digital Strategies for Transforming Your Business, led by Principal Research Scientist Stephanie Woerner, Visiting Scientist Nils Fonstad, and Research Scientist Nick van der Meulen, can prepare you to deal with the challenge of tearing down your current business model to build something new.

Within the course, you'll discover multiple viable digital business model type examples that you can target, all while determining your organization's unique competitive advantage and forming practical plans to reinvent your business strategy for a new era. Rather than purely theoretical, the curriculum is practical, targeting the ideas that are actually affecting your company within the current marketplace.

The course involves interrogating two separate aspects of your business to help you get in step with current digital practices and future-proof your operations:

• How well do you know your customers? Understanding customer needs and your audience's preferred digital channels — what people want from your business and how they want to receive it — is the key to adopting digital practices in a meaningful rather than superficial way.
• How can you optimize your business design? Digital transformation may mean changing everything from the way you organize your teams to the way you deliver your products. Being ready to make changes as you take on a digital strategy is a useful trait in a modern leader.

Executive education can prepare you and your fellow participants to be the leaders your companies need in today's digital ecosystem and in the near future.

Get started with digital business model innovation

There are multiple reasons to pursue executive education in strategic planning for digital business models. Perhaps your current organization needs to accelerate its business strategy transformation to stay in line with developments in its industry. Maybe you're interested in improving your executive resume and finding a high-level position elsewhere in your field.

No matter what your personal objective may be, digital transformation expertise pertains directly to the kinds of scenarios companies face today. Future-proof business models are a must in a world that's not slowing down.

Enroll in Digital Strategies for Transforming Your Business to prepare your knowledge for the digital strategy era.