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The Open Economy; and the Networked World

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An overview of the Open Economy and the disruption it represents to business as usual.

An overview of the Open Economy and the disruption it represents to business as usual.

Published in: Business, Technology

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  • 1. The Open Economy90:10 Group: Your Open Business Partner
  • 2. IntroductionThe Open Economy & Open Business• Social media has shown people are willing to engage with brands; share, discuss, create and offer ideas• It has given birth to new platforms dedicated to opening innovation to the crowd• Most believe this can deliver value across the whole organisation from marketing to product and service innovation• But few know how to move beyond experimentation to scale into business transformation• As big firms struggle to overcome their legacy issues market forces become more open, connected, and social• This means big disruptions and challenges to them and their agencies• We call this environment The Open Economy and our framework for response to it is Open Business.30/07/2012
  • 3. The Open Data MovementData is expected to be shared and open Companies such as Facebook are valued on the data of its users – who trade it in return for utility API: The idea of organisations making their data easily accessible to outsource and derisk innovation or offer for public good Hacktivism at its roots is about exposing hidden truths; be that how poorly companies protect your data or the secret dealings of super powers and shady corporations.30/07/2012
  • 4. Open CapitalThe democratisation of capital means increased competition • There are more than 450 crowd-funding platforms around the world • With 5 white-label crowd-funding platforms introduced this year • To date $1.5 billion dollars has funded more than 1 million projects • 55% in Europe, 44% in the US and 1% in other regions • The average crowd-funding project takes 10 weeks from beginning-to-end30/07/2012
  • 5. Open Innovation ScaledCo-creation is being applied across all business innovation gatesOpen Innovation has existed since the 1960s, a termpromoted by Henry Chesbrough, but with the recentadvent of affordable and widely used collaborativetechnologies, it can be applied at scale.There are now hundreds of co-creation and ideacrowd-sourcing platforms and case-studies acrossalmost every sector from FMCG to Automotive. Withbrands like Proctor & Gamble driving 60% of allinnovation from partnerships outside theirorganisation.
  • 6. Networked Human CapitalAn increasingly virtual workforce crowd-sources solutions30/07/2012
  • 7. The Open EconomyThe new market reality The Open Economy Open Open Data Open Innovation Open Capital Organisation Movement Scaled (Crowdfunding) (Crowdsourcing) Powered by: Social Media + Internet Culture of Openness x People30/07/2012
  • 8. Untangling the buzzwordsOpen Business is structured use of the strands of Open Economics Crowd-sourcing Open Data Crowd-funding Co-Creation Netnography Open Business30/07/2012
  • 9. Market Forces are now; Connected, Open & LeanBecoming an Open Business is not optional just a matter of time Tomorrow’s Customers Activists Competition Barrier to entry Almost every Organisations like for competition purchase cycle Greanpeace see has never been now involves a themselves as a lower. Crowd- Google Search or platform for their funding and Community advocates to lead white-label API Reach-out in both change. Activist tech dominate. B2B and B2C attacks have increased YOY.30/07/2012
  • 10. Open BusinessFor communication, product & service innovation• We think of social media as a door to the outside world.• A door to; listen, ask, connect and create with people outside both partners, customers and experts.• All for the purpose of competitive advantage in marketing, service and product innovation.• Over the last 3 years we have developed a frame-work to deliver open business at an Enterprise level for blue-chip companies
  • 11. Open Business Opportunitiesto become a better more profitable business• Customer satisfaction increase of 20-30% achieved at 20% the cost• Resulting in an increase of 31% in customer retention• 27% increase in existing customer sales• 31% increase in brand advocates (each worth 5 x the average customer)• 34% increase in feedback & ideas from customers• 34% increase in brand awareness• 27% increase in new customer sales• 31% increase in ideas generated within the company• Net profit per employee rose by 53%• Overall sales-to-assets increase of 66%Sources: Cohort-Study on Social Innovation – TNO Work & Employment 2008-09 P&G Connect & Develop Program – Harvard Business review June 2011 Social Business Software Survey (Jive Funded) 2010 BT Care Interview 90:10 Group Jamie Burke
  • 12. Closed businesses can’t competeOpen equals a better fit with the networked world• Many of the success stories of the 21st Century are built on multiple Open Business Principles. Google, Apple and Amazon are among the more famous.• According to IBM’s CEO survey in May 2012, companies that outperform their sector are 30% more likely to identify ‘Openness’ as a key factor in their success with particular benefits for collaboration and innovation.• Businesses starting today build on the Principles of Open Business from the word go. They do so because the principles are self- evident to those growing up in a networked world.• They know they are simply the most effective way of taking greatest advantage of the world as it exists today.• This places them at significant competitive advantage over those who are not seeking to apply the principles for legacy or other reasons.30/07/2012
  • 13. Challenges of the Open Economy Issues for today’s corporations to address to survive Corporate Declining & Exponential Data Glocal Needs Citizenship Migrating Trust SetsThe combination of It is no longer acceptable to Trust in large media More and more data isGlobalisation in an internet just make a donation to companies and brands is in available for companies toage requires multinationals charity or speak of good decline. It is migrating to mine - and make sense of.to be consistent globally but intentions through your CSR peers but in a complex and From big data, to real-timereflect local cultural department. Our ever shifting way. The days and behavioural data fromnuances in a real-time way. connectedness means you of control advertising or mobile, social and otherThis challenges traditional can’t just say, you have to clever PR are over. new sources. The desire toorganisational structures do. If you want to be part of simplify the complexity isand requires a breaking the online community you increasingly difficult todown of silos and market are expected to actively resist. But this reductionismdivisions. participate in the world risks destroying the true around you as a good citizen value. CommunityPeople / System Influence Insight Culture 30/07/2012 13
  • 14. Minimum demanded in an Open EconomyNew entrants are emerging with these attributes as their default1. Transparency2. Openness3. Connectedness4. Purpose30/07/2012 14