Meta Digital Transformation
Transcript of Meta Digital Transformation
HOW TO GROW
IN THE NEW
ORGANISING FOR DIGITAL TRANSFORMATION
ENTERPRISE VALUE
DIGITAL ECONOMY
Digital is the new
economy
2000s
2010s
THREE DECADES OF DIGITAL EVOLUTION
1990s The internet becomes
searchable enabling
ecommerce.
Personal computing
makes communication
and information
processing faster and
more accessible.
Access to new
markets with
cloud computing
and mobile
technology came
with automation,
allowing
enterprise to scale
as never before.
Social media
marketing
became a thing.
Digital becomes the new economy. It is not just the
digitisation of business processes and activities; it is the digitisation of society itself.
page two
3 billion people equating to half the
global population are connected to the
internet
5.5 million new ‘things’ are connected
every day
6.4 billion connected ‘things’ in use in
2016 and will more than triple to
21 billion by 2020
While the global trade in goods has
stagnated since the Global Financial Crisis,
50 percent – and growing – of the world’s
trade today is digitised
sources: Gartner, Inc.; McKinsey Global Institute, Boston
Consulting Group
communication
information
em
ail
no longer about applying technology to fix legacy processes and business practices. It is about
adapting to a world where the connectivity between people and things shapes how they conduct
every aspect of their lives..
THE DIGITAL ECONOMY IS
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DIGITAL BUSINESS IS
adapting to meet people’s shifting expectations
in an ‘always on’ world.
Many companies have underestimated the magnitude of change needed …
and the speed required to catch up to dynamic customers and disruptive
competitors. Leaders will take on the hard work of shifting to a customer-
obsessed operating model; laggards will aimlessly push forward with flawed
digital priorities and disjointed operations.
The Top 10 Factors for Success in the Age of the Customer, Forrester, Research
When endless choice is only as far as the
nearest internet-connected screen, products
and services – from cars to your next romantic
date – have become commodities. Customers
no longer perceive value in the features and
benefits you offer.
Instead customers judge the value you offer
through their experience dealing with you at
each touchpoint across their customer journey.
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how well an organisation is able to draw
on the resources within and outside the
enterprise to adapt, innovate and
collaborate in response to market
opportunities as they become increasingly
amorphous.
DIGITAL CAPABILITY IS
Whereas in the industrialised economy,
capital was concentrated for mass
production, giving market power to the
few; in the digital economy, the accessibility
of technology disperses market power to
millions of people through their internet-
enabled ‘things’.
Organisations can no longer depend on the
resources within its direct control to keep
up with evolving expectations of customers.
Nor will they be able to keep up with the
leaps in innovation made by competitors
with the potential not just to service the
market better, but change it altogether.
Users with advanced digital capabilities
are capturing disproportionate
benefits. The companies leading the
charge are winning the battle for
market share and profit growth; some
are reshaping entire industries to their
own advantage.
Digital America: A tale of the haves and have-mores, McKinsey &
Company, 2015
page five
ENTERPRISE VALUE IS
created when an intangible resource is applied to a physical one. Every time an intangible resource
– such as know-how, systems and designs – is applied, more value is created.
83% 68%
32% 20%
13%
17% 32%
68% 80%
87%
1975 1985 1995 2005 2015
Tangible Assets Intangible Assets
COMPONENTS MARKET VALUE ON THE S&P 500
Ocean Tomo LLC
The value lies dormant until activated by a
transaction or interaction.
Digital technology’s ability to facilitate
limitless micro interactions (such as social
media ‘followers’ and ‘likes’) through to
complex transactions, at virtually no cost,
has opened endless opportunities for new
value creation.
An enterprise can use its digital capabilities
to turn its intangible assets – that would
otherwise have remained unrealised – into
value that builds greater customer loyalty, a
way to differentiate its brand from others,
and even new sources of revenue.
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Digital provides new
ways to create value
TRADITIONAL THINKING DIGITAL THINKING
Customers Users and customers
Incremental improvements Innovative leaps
Features and benefits User/customer experience
Price Value
Resource constraints Collaborative opportunities
Command and control/closed organisations Open system organisations
Industry standards/norms Disruption
Disintermediated supply chains and globalisation brought about by digitisation has placed enormous
pressure on enterprises and their profit margins. To remain competitive, many opt to migrate up the
value chain hoping to justify higher prices and differentiate their brand. But as more head in the same
direction, the market becomes over-serviced and the goods and services fall back into commodity
status.
Typically, enterprises see the problem as a marketing one, and will focus on ways to promote the
superiority or uniqueness of their offering. This traditional thinking which they may been successful in the past, has gone from once being the solution, to now part of the problem.
DIGITAL IS THINKING DIFFERENETLY
the challenge to shift the organisation from its reliance on the approaches that worked so well in
the old industrial economy. It is developing a culture of innovation to ensure the enterprise will
remain relevant and competitive and reap the benefits of a new economic environment in which
everyone and everything is able to be connected.
DIGITAL TRANSFORMATION IS
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Research by MIT Sloan shows those that are making the digital transition
are 26% more profitable than their industry peers.
TARGET USERS TO CURATE VALUE
either innovating within an existing business model or developing a different model altogether,
turning users into new business opportunities.
Utilising existing organisational assets not only tends to offer better returns, inter-related offerings
become a system of solutions that consolidate your customers’ relationship with your brand.
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VA
LU
E P
RO
PO
SIT
ION
NEW
MARKET INNOVATION
Find new ways to reach
customers with a different
value proposition.
USER INNOVATION
Use your capabilities to
develop new forms of value
for a new user base.
SA
ME SERVICE INNOVATION
Find new ways to deliver a
better customer experience.
VALUE INNOVATION
Find new ways to make your
value proposition relevant to
a different customer base.
SAME NEW
USER FOCUS
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is a business model that re-packages and repurposes value you offer your customers to reach new
users.
Focusing on customers without users makes you transactional, and transactional relationships are
easy to disrupt and replace. Because the nature of user relationships is value experience, they are
more deeply rooted and inter-connected, thus harder to dislodge.
A MULTI-USER BUSINESS MODEL
Focus on the user
and all else will
follow.
Number one on Google’s list of “Ten
things we know to be true” that
defines who they are as a company.
Apple users create and
download content onto their
Apple devices, each driving the
value experienced – and sales –
of the other.
Digital transformation
needs an organisation
optimised for trust
page eighteen
David Whiteing, Commonwealth Bank ’s chief information officer, was one of the hundreds of senior
Australian executives looking to California for inspiration. CBA sent its entire board to Silicon Valley
in September, meeting heavyweights and potential competitors like PayPal, Facebook, LinkedIn and
Microsoft.
“For me and the executive committee it was the realisation it was not about the technology per
se, but about the capability you have in your team, and the values and culture you are going to
promote.“
Many of the executives, venture capitalists and consultants interviewed for this article agree the
answer [to digital disruption] lies somewhere in the field of culture and having the right staff in place
rather than the technology itself.
“I think the single most important thing for any organisation is to instil a culture that encourages
and reinforces the need to innovate and take some risks, and tolerate the experiments that fail.
Innovation and risk taking go hand in hand," Google Australia’s head engineer, Peter Noble says.
“I’ve been a technologist all my life, but I’ve just learnt that people and culture are ultimately what
drives innovation."
excerpt from Disruption or destruction? Surviving the innovation age, Australian Financial Review, January 2015
DESIGN FOR TRUST
When organisations prioritise
“behaviors and practices that
foster trust…they are more than
2½ times more likely than Trust
Laggards to be leaders in revenue
growth, significantly outperform
all other organizations in
achieving key business goals –
including customer loyalty and
retention, competitive market
position, ethical behavior and
actions, predictable business and
financial results, and profit
growth.” Building workplace trust: trends and high
performance, Interaction Associates Inc. 2015
page fourteen
Because the new economy is about the digitisation of relationships, success depends on the
enterprise consistently demonstrating its commitment to creating trust.
BE VALUES-DRIVEN
Vision, mission, purpose – what you call it doesn’t matter unless you take the values behind them
and make them an inviolable part of the way you do business.
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Only one in four
general public
respondents trust
business leaders to
correct issues and
even fewer – one in
five – to tell the truth
and make ethical and
moral decisions.
There has been a
widespread
condemnation of the
excesses that led to
the [global financial]
crisis and … a
perceived deficit of
values in the global
economy.
Corporate social
responsibility is a key
factor for deciding
where to work (81%),
what to buy or where
to shop (87%) and
which products and
services to
recommend to others
(85%).
Edelman Trust Barometer, 2014 World Economic Forum, 2014 Cone Communications/Echo
Global CSR Study, 2013
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BUILD ADAPTIVENESS INTO THE CULTURE
Successful digital transformation is adaptive management not change management. Change
management drags people into keeping up. Adaptive change brings people together to work
towards a desired future.
Avg increase for firms
WITH performance-
enhancing cultures
(over an 11 year period)
Avg increase for firms
WITHOUT performance-
enhancing cultures
682% Revenue
Growth 166%
282% Employment
Growth 36%
901% Stock Price
Growth 74%
756% Net Income
Growth 1%
Strong corporate
cultures that facilitate
adaptation to a
changing world are
associated with strong
financial results.
John P. Kotter, Konosuke Matsushita
Professor of Leadership, Emeritus, Harvard
Business School, from the book co-written
with James L. Heskett, Corporate Culture and
Performance.
Social capital is the reciprocity, trust and cooperation central to transactions within networks, and
essential for people and organisations to benefit fully from digital connectivity.
People hired for
attitude are
flexible
Individuals network outside the
organisation for resources
Innovation is not
limited to a
department or level
Risk and failure are
seen as part of
making progress
Collaboration happens
at all levels
Diversity fuels
performance
Learning is
continuous
Structures and
infrastructure enable
agility
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MAKE SOCIAL CAPITAL
Organizations with better connections … report higher patent outputs, a higher
probability of innovation, and higher earnings and chances of survival in rapidly
innovating industries. Social capital, within the firm and across the firm’s border to other
firms, seems to be a prerequisite for organizational learning, adaptability and agility.
Social capital: the key to success for the 21st century organisation, IHIRM Journal, 2008
BE DESIGN-LED
Results show that over the
last 10 years, design-led
companies have
maintained significant
stock market advantage,
outperforming the S&P by
an extraordinary 228%.
The DMI Design Value Index by Motiv, 2014
Design-led methods allow all the functions within an organisation to integrate their expertise and
perspectives. They solve for people’s needs not just for process and are more likely to find
sustainable solutions to sticky problems.
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Design thinking fosters innovation because it requires teams to work from a common ground. The
common language of design allows a trust-based team culture to develop.
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Organisational confidence is the prerequisite to innovation.
Confidence comes from an organisation aligned around a
purpose and guided by a clear set of values.
Without confidence, people cannot:
~ Challenge norms and status quo
~ Take the risks that comes with developing new things
~ Work collaboratively with others
~ Do deep, rather than merely visible, work
~ See failure as progress
~ Be open to feedback and ideas from others
People need to feel trusted to innovate.
BUILD CONFIDENCE TO INNOVATE
A brand must continue to develop
and innovate in order to be trusted.
The six drivers of trust, Mext Consulting, 2009
page twenty
PRIORITISE ENTERPRISE SKILLS
Enterprise skills, that is the combination of analytical,
leadership, social and creative skills, are vital as more
work and business is conducted across distributed
individuals and groups, using digital channels.
Businesses are more profitable and
productive when they act ethically, treat
their staff well and communicate better
with customers. The top 10 companies in
the Global Empathy Index 2015 increased
in value more than twice as much as the
bottom 10 and generated 50% more
earnings.
The Most (and Least) Empathetic Companies, Harvard Business Review,
2015
Investment in leadership development from executive level down is failing to produce the enterprise
– or soft – skills needed by enterprises, not due to lack of those leaders’ abilities, but because their
skills are not rooted in the context of today’s environment.
Enterprise skills may be ‘transferable’ but the assumption that this transfer happens automatically is
flawed, undermining the value leaders can contribute and hurting the enterprise’s potential.
Where to from here?
There has never been a time in history where so much change has happened so quickly as it does
today. In their aim to avoid digital disruption. enterprises may be innovating rapidly, but without a
clear idea of what their innovations should achieve, they can fail to go much beyond the act of
innovation for innovation’s sake.
Harnessing technology is a start. However, this often is an outside-in approach where ‘what
everyone else is doing’ becomes the driver for change. This was useful in the first years of the
digital era but in the 21st century digital economy, transformation works from the inside out.
To operate in a connected world, you need an organisation specifically designed for it. The insular
models of the industrial era prioritised efficiency and shareholder return. Trust and performance
were often in conflict. And as case after case of corporate misbehaviour shows, trust would not
always prevail.
Markets are moving from mass standardisation. People are wearied by over-consumption,
materialistic lifestyles, unsustainable and environmentally irresponsible production practices, and
marketing promises that under-deliver. Increasingly consumers are seeking to spend their dollars
to meet their immediate needs and simultaneously make the world a better place. Ecommerce is
no longer just transacting online, it is checking whether the enterprise lives up to consumers’
social, ethical and environmental expectations.
As more social and economic activities are conducted digitally, new market opportunities
continue to open at the same pace as disruptors try to reinvent the market.
The stakes for an organisation to make a digital transformation are high.
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HOW TO EVALUATE AND INNOVATE ORGANISATIONAL ASSETS
Follow these six steps to utilise digital’s capacity for turning existing connections and capabilities
into new value.
1. Make a list of organisational assets beginning with the obvious physical assets. Use visual
thinking techniques to uncover underlying intangible assets such as habits, and those
developed as a by-product of the core business.
2. Decide your organisation’s values: identify the unspoken rules of behaviour and compare
them to the espoused values (e.g. vision/mission statements). Deal with inconsistencies. Align
the organisation against the ideal values to ensure a positive workplace culture.
3. Map your business ecosystem and its users. What user needs could you satisfy using your
existing organisational assets? Focus on opportunities that embody your values.
4. Take stock of the enterprise skills within the organisation. Develop skills through training,
learning experiences and strengthen with a coaching culture. Analyse legacy performance
management and learning systems for on-going relevance and effectiveness.
5. Use methods like Lean Startup, design thinking and DevOps to test potential business model
innovations.
6. Structure the organisation so that it aligns with and supports your remodelled business.
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META MANAGEMENT TURNS ORGANISATIONS INTO ASSETS
We are good at:
• Identifying strengths and weaknesses in organisations and working to these
• Designing organisations for people not machines
• Finding ways through the limitations of now to achieve possibilities of the future
• Focusing on actions that produce business results
• Helping people to learn from doing
WORKING WITH US
Workshops
Our workshops focus on developing enterprise skills, optimising organisational trust and
business model innovation. Sessions topics are customised to meet your organisation’s specific
requirements. Workshops typically run for 2 days to ensure participants have the opportunity
practice skills and concepts and develop a plan for transferring their learning to the workplace.
Coaching/consulting
We work with you to develop a program that supports your organisation to achieve your
business objectives. Each program runs for a minimum of three months so that goals are realistic
and their impact can be assessed, allowing for on-going course correction..
PLEASE CONTACT US FOR MORE INFORMATION
Meta Management
www.metamanagement.net
+61 3 9016 3827
Skillup Lab
What are the skills that drive innovation? How do leaders work with teams to conceive, develop and
implement the changes in a never-still world? What do leaders who are effective in dynamic and
collaborative environments do?
Skillup Lab is like a startup lab except its focus is on developing the enterprise skills needed for
today’s demands. It is an experiential process that involves working on their own live business
innovation projects, or one we allocate to them. Participants attend a series of workshops covering
skills such as story-telling and design thinking, then are supported as they apply those skills in
practice.
Labs run for either one month (fast track) or three months in which participants are able to develop
the full toolset of skills to lead people through successful innovation.
final page
Thank you!