15. Digital Affects Processes,Enterprises &
• Mobile Access
• Social Engagement
• Sensors & Wearable Devices
• Digital Financial Models and Transactions
• Connected Devices
• Digital Content Management
16. Then - Now
Then: Old fashioned, proprietary POS system.
Now: Tablet + Square Reader
28. New Processes
• “Code fast and break things”
• “Perpetually in Beta”
• “Release early, release often”
• “If you are not truly embarrassed by
your product, you waited far too long
to release it”
29. Iterative Reﬁnement
• Start with an initial model
(hypothesis or idea.)
• Collect data from the ﬁeld. (Show
users prototypes or basic
• Measure users empathetic
• Adjust model so that it more
adequately ﬁts the measured data
(meets the users needs.)
• Repeat the process until no further
reﬁnement is possible.
32. Digital Decision-Making
•System 1: Fast, automatic, frequent, emotional,
•System 2: Slow, effortful, infrequent, logical,
“Thinking, Fast & Slow” Daniel Kahneman
33. How the Mind Decides What to Do
• Most of the time, we’re not consciously
deciding what to do next.
• We often act based on habits. They can
be created, but are hard to defeat.
• We often make intuitive, immediate
decisions based on our past experiences.
• When consciously thinking, we often
avoid hard work. We “wing it” with
rough guesses based on similar, but
• We follow other people, especially peers
39. The Lean Start-Up (LSU) Model
Lean StartUp: A temporary organization designed to ﬁnd
a repeatable, scalable business model under conditions of
40. The History of the Lean Start-Up
• Founded by Steve Blank (Customer
Development; Repeatable Business
Model Hypothesis; Rapid Experimental
• Expanded by Eric Ries (Minimum
Viable Product (MVP); The Pivot)
• Assisted by Alex Osterwalder (The
Business Model Canvas)
41. How the LSU Beneﬁts Enterprises
• Extreme uncertainty also
occurs at large enterprises
• Existing Lines of Business
(LoBs) often require new
• Discovering new revenue
42. The Business Model Canvas
What are the most important costs inherent in our business model?
Which Key Resources are most expensive?
Which Key Activities are most expensive?
Through which Channels do our Customer Segments
want to be reached?
How are we reaching them now?
How are our Channels integrated?
Which ones work best?
Which ones are most cost-efficient?
How are we integrating them with customer routines?
For what value are our customers really willing to pay?
For what do they currently pay?
How are they currently paying?
How would they prefer to pay?
How much does each Revenue Stream contribute to overall revenues?
For whom are we creating value?
Who are our most important customers?
What type of relationship does each of our Customer
Segments expect us to establish and maintain with them?
Which ones have we established?
How are they integrated with the rest of our business model?
How costly are they?
What value do we deliver to the customer?
Which one of our customer’s problems are we helping to solve?
What bundles of products and services are we offering to each Customer Segment?
Which customer needs are we satisfying?
What Key Activities do our Value Propositions require?
Our Distribution Channels?
Who are our Key Partners?
Who are our key suppliers?
Which Key Resources are we acquiring from partners?
Which Key Activities do partners perform?
What Key Resources do our Value Propositions require?
Our Distribution Channels? Customer Relationships?
Day Month Year
This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License.
To view a copy of this license, visit http://creativecommons.org/licenses/by-sa/3.0/
or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.
43. LSU Methodology
• Test Hypotheses: Run high-speed
experiments with rapid prototyping
to validate/discard hypotheses.
• Explore: Interviews, Observations,
Re-enactment. Use Design Thinking to
relate to customer’s emotional state.
• Pitch: Present an idea as if it were a
ﬁnished product. Get buy-in from all
• Prototype & Test: Launch product
as unique brand. Spin-out. Isolate in
44. Summary: LSU Model
• Create a business model canvas
for each opportunity in portfolio
• Check which ones show evidence
for customer segment, value
• Use LSU model to validate these
• If none validate, pivot to another
45. Digital Enterprise Examples
• Burberry: Connected in-store experience
• Nike: Customer Engagement
• Volvo: Digital CRM
• Harrah’s: Location-based marketing
• Starbucks: Mobile payments, loyalty points, incentives
• Virgin America: Twitter-based customer service
• L’Oreal: Customer engagement channels
• Intel: Recruiting via Social Media
• P&G: Improved productivity and enterprise
55. Digital Transformation
1. Social, Mobile & Real-Time are causing
2. Digital Transformation is becoming a priority
3. Digital Transformation is driven largely by
4. Digital Transformation is based on 3 key
elements: leadership, optimizing customer
experience, and a digital experience ‘swat
56. Transforming the Enterprise
Business Case(s) Digital Business Models Digital Architecture Digital Asset Maturity
Competitive Threat ‘Mobile-ﬁrst’ impact
Program Execution &
Assess Strategize Execute Transform
57. Enterprise Challenges
• Departments act as their own ﬁefdoms.
• Managers act from a position of self-
• Distribution of roles in customer journey.
• Budgets/resources not ofﬁcially allocated.
• Educating the enterprise of the value of the
transformation is difﬁcult.
58. Key Elements to Digital Transformation
• Vision & Leadership
• Digital Transformation Team
• Digital Customer Experience
59. Vision & Leadership
ROLE OF CHANGE AGENT
In the absence of digital leadership,
change agents must rise from within the
enterprise, unite with each other, and
partner with executives to collaborate for
For digital transformation to mean
something to all involved, a vision
must be clearly articulated to
explain why change is needed,
what it looks like, and its value to
customers and employees.
Strategists must make the case
and create a sense of urgency
to gain executive sponsorship
60. Digital Transformation Team
It’s necessary to form a cross-
functional group tasked with
redesigning and optimizing the
customer experience, including
roles, responsibilities and projects.
Digital expertise may not be common
throughout the organization, but it
should be sought. The goal should be to
organize a qualiﬁed team of strategists
who can educate key stakeholders.
A strategic alliance between
IT and marketing will
streamline and help scale
digital transformation efforts.
61. Digital Customer Experience
Companies must rethink
the entire customer
journey and experience.
often leads to
unplanned products or
services that reﬂect
actual customer needs
New roles are needed to
analyze data, connect it to
lines of business, and
present it in actionable
Journey mapping should
lead to insights into which
departments need to work
more closely together.
64. Work 2.0 - The Digital Enterprise
• View boundaries not as edges but as
areas of overlap
• Enable employees to see the impact of
• Design for culture: Link culture to
• Maintain identity in a distributed
• Adhere to core principles while
adopting to changing conditions
66. From Work to Network
Disintermediating work from the
• Open Innovation: Involving
ecosystem in new inventions
• Generativity: Creation of
completely new products or
processes from existing systems
67. Management 2.0
• Coordinating communities of practice will require new
forms of managerial skills (data analytics, efﬁciency)
• Managers will need to manage cooperation,
competition and conﬂict simultaneously
• Data will be critical for decision making, risk assessment,
and developing new products
• Instinct, gut-feeling and tacit knowledge can still uncover
patterns and insights that data analytics might overlook
71. Five Stages of Behavior Design
• Understand: How the employee decides to act
• Discover: The right behavior to change, given your goal
• Design: The process to bind to a speciﬁc behavior
• Reﬁne: Measure impact & success based on careful
measurement and analysis
• Iterate: Cycle through this process until the desired
behavior becomes habit-forming
73. Constructing the Environment
• Help employees see themselves as people who would
naturally take the action.
• Help employees build strong associations between
things they are already familiar with and enjoy, and
the new action.
• Provide employees with clear instructions on what they
need to do and any other essential information to act.
75. Optimizing Behavior Change
• Ensure employees are motivated to act, and that
motivation is at the front of their minds.
• Ensure they are cued to act now. (Ask them.)
• Ensure they know if they are succeeding or failing—give
them actionable feedback.
• Avoid or co-opt behaviors that are competing for their
attention. (Ideally, piggyback onto something they are