We live and breathe digital transformation in Schibsted and tori.fi. What you can learn from us, but also consider as principles to discuss about this in your business. We are sharing 10 principles we believe in digital game. If interested more, check http://schibsteddigital.com
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Digital transformation and what you can learn from Schibsted
1. Strategic Digital Transformation
Presented in Aalto University, BISE Pro - Professional Diploma in Business
and Information Systems Engineering
Jussi Lystimรคki, CEO Schibsted Classified Media, Finland
May, 2014
2. Framing the topic for top management and company survival
๏งโฏ Company direction โ drifting or controlled transformation to survive in change
๏งโฏ Friction and growth, framing digital transformation
๏งโฏ Why this should be a top topic in the boardroom โ changing your fundamentals can
take years โ do you have time for it?
Case Schibsted โ what to learn from us
๏งโฏ Why Harvard and others are writing about our success as a case study
๏งโฏ Transformation does not stop, you might need to cannibalize yourself
๏งโฏ What we have learned about transformation โ 10 principles we believe in
Summing up
๏งโฏ My top learnings for today
Contents in short
3. My framework โ working in digital change since 1995
IT/Digitalization for online banking, Telcos and transactions,
70+ people, Exit to Ixonos Plc 2007 (OMX), Deloitte FAST 500
EMEA 2006
One of the global #10 in digitalization of BI market intelligence. More
than 150 people, over 100 countries, VC-backed (Capman, 3i)
Early stage and incubation โ Invested into disruption thru
internet/mobile, offices in FIN, ISR, GER, UK, CHINA, US,
listed on London AIM-list, market cap 200mil euro. Exit 2002.
One of the top media groups, Mcap 5+bn euro, in top-3 in
global online classifieds. Listed in Oslo. A global success
story in digital transformation
The leading communications group in the Nordics, 800 people, Fully
owned by Finnish state. Klikki is the leading next generation
digimarketing company, In 2010, 2011, 2012, 2013 EMEA Deloitte
FAST 500
One of the global top10 in digital UX and service design.
Deloitte FAST 500 EMEA 2008, 50% California, 50% Finland, 90+ people
5. The future of any company is
driven by decisions taken
What is the focus and use of
time in the boardroom?
Topics discussed and decisions
made in the boardroom?
In which role the board gives
the best value for the growth?
What is the digital
transformation competence in
the boardrooms?
6. Media companiesโ landscape has changed to different
planet โ its not only about simple logic anymore
โขโฏ Business fundamentals on how media industry makes money has changed quicker than ever
expected โ still it took some 15-20 years from the first signals
โขโฏ Technology enables โ and brings in opportunities โ others will capitalize on them if you are not
Example: one fundamental - key corner stone of selling advertising into
media product is not that simple anymore and its not about skilled media
sales organisation anymore
7. Digitalization is changing every business and new
ecosystems evolve around you โ you want it or not
7
โขโฏ Digital transformation requires to take technology into core competence, key principal
and asset - its not an extension of traditional IT
โBad business decisions continue to be
made by media companies because of the
significant lack of technology leadership in
both executive and middle management.โ
โMedia companies must evolve away from
their historical strengths based on
distribution control, and must embrace
technology as a key principalโ.
โMany media companies have treated their
existing engineering organizations as an
extension of traditional IT models, with
mediocre engineering talent endemic in their
organizationsโ.
8. Its not survival of the fastest, strongest but fittest
โขโฏ For top management โ the transformation is a major change requiring both quick wins but
also brave and strong decisions to make it happen from top down
โขโฏ 2014 is even harder for media companies as Google, FB, Netflix, mobile apps, โฆ are
pushing harder and harder to change how people consume content and spend their time
Key Findings in 2011:
โโฆcomes not from implementing new
technologies but from transforming your
organization to take advantage of the
possibilities that new technologies
provide.โ
โRe-envisioning customer experience,
operational processes and business
modelsโ
โโฆdoes not happen bottom up. It must be
driven from the topโ
โโฆfocus on the โhowโ more than the
โwhat.โ
The findings from a global study of how 157 executives in 50 large traditional companies are managing
Digital Transformation: A Road-Map for Billion-Dollar Organizations
9. Digital transformation should be
a key topic in the boardroom
Why should the board question and challenge the
insight and plan of the management team?
โฆ and ask about the strategic assumptions and
what is seen in the horizon?
10. Decisions about the
future require insight
and envisioning
Did he see what โships and
gunsโ meant for his troops
and people?
11. Signals
Trends
Change drivers
What if โ you could foresee
your โships and gunsโ early
enough to understand the
coming up change for your
business and industry?
13. Scenario
What if โ you
could have active
and proactive
talks in the
boardroom about
skenarios and
needs for digital
transformation?
14. End Game
What if โ you would
understand where you need
to be in 3-5 years time to win
your game?
15. End game is about digital transformation and developing
your shareholdersโ value to keep up in the game
Example:
Business models
transform in media
industry
โฆbut also in fast
moving internet giants
need to transform
their businesses
Googleโs trading logic
Printing and selling
content
Using market cap to buy transformation
16. Market capitalization is a top management
and boardroom topic โ the future is key
Comparison of two Nordic Media Groups with Ebayโs stock value development โ different strategies and different future skenarios
18. What Schibsted can tell us about digital transformation
โขโฏ A successful transformation on global scale in media industry
โขโฏ Super traditional industry โ but now co-battling with FB, Google and other tech giants
19. Schibsted used to be a traditional media
company in the start
๏งโฏ 150 years old traditional media group listed in Oslo stockexhancge
๏งโฏ Business logic was in traditional media, TV, newspapers, movie distribution
๏งโฏ The top management and board members saw the change coming early on and decided to
take โinternet businessโ into the core of the company and let it drive and shine, cannibalize
and transform
20. The key was to make it early on and build on it
=152M euro
Example: online classified site in Norway, Finn.no
21. Digital transformation is now in speed and the media
group is growing with good profitability
Online businesses are bringing in
significant part of top line
โฆbut majority of profits
22. What we can learn from Schibsted for other media
companies
1.โฏ Scale is the name of the digital game. Once a market opening is found, it needs to
rapidly exploited โ going into othersโ territories
2.โฏ The online services model allows publishers to get into new money streams that can
grow over time and are cousins to publishersโ traditional activities
3.โฏ Getting in early is fundamental to success
Key findings from us:
23. We have learned that mental acceptance for change and
thinking big drive us to new digital landscapes
โYou must accept that if you have disruption in an industry, thatโs a fact. If you donโt disrupt yourself,
somebody else will. And at the end of the day, itโs better that we do it than somebody else does it.โ
โ We still have the print parts of our business, but we are mainly a digital company. You must mentally say to
yourself, โOkay, now we have really changed the core of our business and become a digital
company.โ If you donโt, you stick to old ways. The most important thing is to change your way of working
and put the emphasis on the future, not on the past.โ
โThe fact that we say we must change and accept the fact that our old business models must be replaced
by new ones doesnโt change that we believe in journalism and think journalism is something very
important from a societal point of view, but also from a business point of view. Itโs not about giving up
journalism and putting all the money into classifieds. Itโs also about innovating journalism.โ
โ Going digital is a process that doesnโt stop after you add ones and zeros into the mix. Even for those
like Schibsted that have profited from early-mover advantage, fear of getting scooped on the new, new
thing is a constant worry. As other publishers have learned the hard way, it is all too easy to end up
becoming yesterdayโs news.โ
โ We are considered to be a very successful company compared to our national and regional peers but the
problem in a globalized market is our new competitors are Google, Facebook and so on. These are very
clever international companies with lots of power and this is a new competitive field for us. To be best in
Sweden, or Norway, is not the big thing any more.โ
24. Ten digital transformation principles we believe in
1.โฏ Always ask which job the user is trying to do
2.โฏ There is no final product version, always ask yourself what you can do to make products better
3.โฏ Measure everything, real-time
4.โฏ Solve problems based on facts, and use all available data
5.โฏ Involve people with different opinions and skills
6.โฏ Consensus is good, but speedy decision is better. Trust yourself and others to make good
decisions
7.โฏ Urgency matters, and fast execution is better than slow
8.โฏ Take risk and when you fail, fail quickly. Learn from it and move on
9.โฏ Take your work seriously, but not yourself too seriously
10.โฏ World class changes the mindset, so be as ambitious as you can
26. What I think is important in digital transformation today
โขโฏ The boardroom and top management needs to accept fact of distruption and act on digital
transformation โ changing business models usually takes years โ do you have it?
โขโฏ Its not about being big in the local market anymore โ its about scale and exploitation to
build enough value thru new business models and revenue streams
โขโฏ Going digital is a process that doesnโt stop after you add ones and zeros into the mix
โขโฏ Its about agile and lean marketing game to make the โmovementโ spin up. You can win or
fail in the internet quickly โ both are good things. Some companies burn and push
100+million euros into marketing, some do it together with users and recommendations
even quicker. You choose how great you are in this game.
โขโฏ Agile and fast moving is key โ fast execution and fail fast โ involve right people
โขโฏ Involve people with different opinions and skills to create a team that wants to win, use
data as much as you can to measure
โขโฏ Take technology and transformation leadership into your core competence
โขโฏ Thinking โworld classโ changes the mindset, so be as ambitious as you can