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Digital Transformation and the Shared Value Shift

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How does your performing arts organization generate public value? How will this change as the arts sector undergoes digital transformation? Come explore the cultural and creative shift digital transformation opens, and take your first steps to re-imagining how shared value is generated and how you can open yourself to deeper engagement with new audiences.

This presentation was developed and delivered as part of the linked digital future initiative. For more information, visit: https://linkeddigitalfuture.ca/resources/workshops/

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Digital Transformation and the Shared Value Shift

  1. 1. Digital Transformation and the Shared Value Shift Presentation by Akoulina Connell www.akoulinaconnell.com Twitter: @akouconnell LinkedIn: @akoulinaconnell
  2. 2. Shared value isn’t always where you plan it… This Photo by Unknown Author is licensed under CC BY-SA
  3. 3. Digital transformation: a cultural shift The main concepts in this presentation are credited to: David L. Rogers: The Digital Transformation Playbook. The digital shift moves us from transactional to relational. The five domains of strategy altered in the digital shift include: • Customers • Competition • Data • Innovation • Value
  4. 4. From Analog to Digital: the digital transformation journey « The future is already here - it’s just not very evenly distributed. » - William Gibson
  5. 5. Customers / Audience This is all about who your organization serves. For an arts service organization, it’s membership. For a performing arts organization, it’s audience, subscription-holders, and donors.
  6. 6. Audience, members, donors (Customers) Analog Digital Age Audience as a mass market Audience as dynamic network One-way value flows: communications are broadcast to audience (inside>out) Reciprocal value flows: Communications are two-way (reciprocity) Organization is the key influencer Audience(s) are a key influencer Marketing to persuade purchase Marketing to inspire purchase, loyalty, advocacy
  7. 7. Harnessing Customer Networks Analog vs Digital (networked)core behaviours of audience (customer) networks
  8. 8. Competition From analog competition to digital co-opetition. To succeed, you may need to collaborate with your direct competition for networked market share. New paradigms are required to succeed in the attention economy.
  9. 9. Competition Analog Digital Age Competition within defined sector segment Competition across fluid sectors Clear distinctions between partners and rivals Blurred distinctions between partners and rivals Competition is a zero-sum game Competitors cooperate in key areas Key assets are held inside your org Key assets reside in outside networks Products with unique features and benefits Platforms with partners who exchange value
  10. 10. Data When it comes to data, we’re moving from learning to read to reading to learn. Linked Digital Future (LDF) Digital Maturity Assessment https://linkeddigitalfuture.ca/#digital-maturity-
  11. 11. Data Analog Digital Data is expensive to generate in-house (human hours for manipulation) Data is continuously generated everywhere (crossover with external data; automated dashboards (APIs)) Challenge of data: storing and managing it Challenge of data: turning it into valuable information Organizations only use structured data (relational databases / internal) Unstructured data is increasingly usable and valuable (linked open data / external) Data is managed in operational silos (software solution = one dataset) Value of data is in connecting it across silos (interoperability) Data is a tool for optimizing processes • Data is a key intangible asset for value creation
  12. 12. Interoperability starts at home… Step one: Interoperability between in-house data Step two: Linked Open Data using standardized practices across multiple organizations with similar profiles Financial software CRM softwareOther digital assets Communications (website/social media metrics) Arts Knowledge Graph Medusa Dance Corps Dance companies Theatre companies Music companies
  13. 13. Innovation Innovation is, at its very foundation, the creative process. This is where artists are expert, and it is where other sectors turn for inspiration and insight. And yet we have we have traditional paradigms of our own that also demand to be questioned and tested.
  14. 14. Innovation Analog Digital Decisions made based on intuition and seniority Decisions made based on testing and validating Testing ideas is expensive, slow, and difficult Testing ideas is cheap, fast, and easy Experiments conducted infrequently, by experts Experiments conducted constantly, by everyone Challenge of innovation is to find the right solution (“excellent” + popular = profit) Challenge of innovation is to solve the right problem (relevance = deeper community engagement, advocacy + profit) Failure is avoided at all cost / focus is on the finished product Failures are learned from, early and cheaply / focus is on minimum viable prototypes and iteration after launch
  15. 15. Value Value is the driver at the core of any decision or action. Shared value has deeper relevance and greater staying power, but its generation is iterative and evolves over time.
  16. 16. Value Analog Digital Age Value proposition defined by industry Value proposition defined by changing audience audience needs Execute your current value proposition Uncover the next opportunity for audience Optimize your organization’s business model as long as possible (stasis by default) Evolve before you must, to stay ahead of the curve (active evolution) Judge change by how it affects your current success Judge change by how it could create your next success Market success allows for complacency Only the risk-takers survive
  17. 17. Value chain mapping exercise What does your current value chain currently look like? Let’s map it! To create a value train diagram, begin by answering three questions: 1. Scope: What is the value offering (product or service) you will analyze? (write description in the heart) 2. Customer/audience/member: Who is your ultimate customer/audience/member? Draw them as a circle on the far right of your diagram and write a short description. 3. Last entity: What source does the customer receive the offering directly from? Draw this party as a square to the immediate left of the customer. 4. Prior entities: What other organizations, if any, provide unique inputs to that organization? Draw them as additional squares to the left. AUDIENCEORG 1 ORG 1 ORG 1
  18. 18. DIGITAL TRANSITION: towards shared value What changes would you see in your value chain if you take the following elements into account? • Linked Open Data (networked discoverability) • Networked audience (customers) + reciprocity loops (iterative value generation) • Demographic diversity (new perspectives on shared value) • Cooperative models for competetive advantage (co-opetition with traditional competitors for a larger collective share of the attention market)
  19. 19. Value chain mapping exercise, continued… Conduct the same exercise, but now consider… Focal organization: Which organization is the focus of your analysis? (e.g. your own organization, or another whose value chain you are studying) Add an additional outline to the square around it. Value and data exchange: Between each square, add arrows in both directions. Label each arrow pointed to the right to indicate what value and/or data is being delivered to the downstream party (e.g. product, service, or creative element on them). Label each arrow pointed to the left to indicate what value is being delivered upstream / data shared. Symmetric competitors: For each square in the chain, identify the symmetric competitors (i.e. organizations that offer similar value, with a similar operating model). Add them to diagram as rectangles below the square square they compete with (e.g. if the NAC was in your value chain as the final distributor, below it you would put a rectangle indicating other brick and mortar distributors). Asymmetric competitors: For each square in the chain, identify the asymmetric competitors (e.g. an alternate distribution channel, producer, or creative contributor/collaborator that can substitute for the organization, has a different organizational model). Add them to the diagram as trapezoids above the square they could potentially serve as a substitute for.
  20. 20. Value chain mapping exercise Figure 3‐11: Complete Value Train Diagram for Sony Music in the MP3 Music Market (Rogers, 2014)
  21. 21. Mapping Resources for Your Digital Transformation What resources do you need in place to enable your organization’s digital transformation and create the conditions where new shared value can develop, evolve, thrive over time? • Partners & Collaborators (similar organizations or organizations with complementary or divergent offerings that broaden the scope of opportunity) • Funders (financial stability will be essential • Skills & Training (where can training be sought to support internal capacity development?) • Specialists / Experts (are there gaps in your organization’s competencies? Where can you go to seek mentorship, strategic advice, or hire for specific skillsets?)
  22. 22. Final Considerations Change comes with risk. Stasis carries risk, too.
  23. 23. Stragegic Planning now requires an integrated Digital Strategy Whether your organization is tiny or large scale, from now on, strategic planning and developing a digital strategy goes hand in hand. Your strategic plan is about your mission, vision, values and goals. Your digital strategy lays out how you’ll experiment, create, support, implement, report, measure, learn, exchange, and evolve over time.
  24. 24. THANK YOU! And thanks to our collaborators and funding partners: linkeddigitalfuture.ca

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