Meta Digital Transformation

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HOW TO GROW IN THE NEW ORGANISING FOR DIGITAL TRANSFORMATION ENTERPRISE VALUE DIGITAL ECONOMY

Transcript of Meta Digital Transformation

Page 1: Meta Digital Transformation

HOW TO GROW

IN THE NEW

ORGANISING FOR DIGITAL TRANSFORMATION

ENTERPRISE VALUE

DIGITAL ECONOMY

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Digital is the new

economy

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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.

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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

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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

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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

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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.

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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.

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Digital transformation

needs an organisation

optimised for trust

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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

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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

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Because the new economy is about the digitisation of relationships, success depends on the

enterprise consistently demonstrating its commitment to creating trust.

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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.

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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

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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

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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.

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Where to from here?

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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..

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PLEASE CONTACT US FOR MORE INFORMATION

Meta Management

www.metamanagement.net

+61 3 9016 3827

[email protected]

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

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Thank you!