Uploaded byInês Almeida
APD summit 2017
The document discusses principles and tactics for businesses to maintain longevity and avoid disruption. It argues that companies must continuously innovate their business models, organize for agility and wisdom, and design meaningful customer experiences to stay relevant. Specifically, it recommends that companies: 1) create value through sustaining and disruptive innovation on an open platform; 2) organize cross-functional teams to gain wisdom from failing fast through experiments; and 3) curate distinctive brand experiences and invest in insightful conversations to understand customer needs on a personal level. The goal is to prevent unintended consequences and maintain a "fountain of eternal youth" against new competitors.
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APD summit 2017
- 1. 1 The Platform SUPPORTING YOURDIGITAL GROWTH Inês Almeida, 25 May 2017 DIGITAL APOCALYPSE SURVIVAL KIT TM
- 2. 2 5/26/2017 2 DEATH &VAMPIRES
- 3. 3 60 13 1958 2029 DATA: INNOSIGHT/Richard N. Foster / Standard & Poor’s SOURCE: Wired AVERAGE COMPANY LIFESPAN ON S&P 500 INDEX (IN YEARS)
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- 5. 5 The Fountain of EternalYouth But… don’t try this at home just yet!
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- 7. 7 $0.00 $50.00 $100.00 $150.00 $200.00 $250.00 $300.00 $350.00 $400.00 $450.00 Best Buy JCPenneyKohl's Macy's Nordstrom Sears Target Walmart Amazon Market Value 2006 (B) Market Value 2017 (B) Billions - 47% - 91% - 73% - 64% - 40% - 96% - 43% + 2% + 2347% SOURCE: Yahoo Finance USABRICK & MORTAR RETAILER CAP VSAMAZON (BN)
- 8. 8 What is acompany’s fountain of youth? How can we avoid unintended consequences?
- 9. 9 BUSINESS MODEL OPERATING MODEL BRAND Human centered CUSTOMER TECH Powered by Thefountain of eternal youth
- 10. 10 CREATE VALUE ORGANISE TO WIN CONNECT WITH CUSTOMERS Human centered CUSTOMER TECH Poweredby The fountain of eternal youth
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- 13. 13 Create value through continuousinnovation. Sustaining & Disruptive. PRINCIPLE
- 14. 14 Sizeoftheorganisation Age of theorganisation Late Prime Adolescence Courtship Death Bureaucracy Recrimination Aristocracy Prime Go-Go Infant GROWING AGING BUSINESS MODEL INNOVATION: STAGES OF CORPORATE LIFECYCLE SOURCE: Ichak Adizes
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- 17. 17 Growth Time BUSINESS MODEL INNOVATION:SUSTAINABLE BUSINESS
- 18. 18 EXISTING OFFERINGS EXISTING USERS NEWUSERS NEW OFFERINGS EXTEND (evolutionary) CREATE (revolutionary) MANAGE (incremental) ADAPT (evolutionary) VALUE INNOVATION SOURCE: Change by Design, Tim Brown
- 19. 19 EXISTING OFFERINGS EXISTING USERS NEWUSERS NEW OFFERINGS EXTEND (evolutionary) CREATE (revolutionary) MANAGE (incremental) ADAPT (evolutionary) VALUE INNOVATION SOURCE: Change by Design, Tim Brown
- 20. 20 EXISTING OFFERINGS EXISTING USERS NEWUSERS NEW OFFERINGS EXTEND (evolutionary) CREATE (revolutionary) MANAGE (incremental) ADAPT (evolutionary) VALUE INNOVATION SOURCE: Change by Design, Tim Brown
- 21. 21 EXISTING OFFERINGS EXISTING USERS NEWUSERS NEW OFFERINGS EXTEND (evolutionary) CREATE (revolutionary) MANAGE (incremental) ADAPT (evolutionary) VALUE INNOVATION SOURCE: Change by Design, Tim Brown
- 22. 22 EXISTING OFFERINGS EXISTING USERS NEWUSERS NEW OFFERINGS EXTEND (evolutionary) CREATE (revolutionary) MANAGE (incremental) ADAPT (evolutionary) SUSTAINING INNOVATION VALUE INNOVATION SOURCE: Clayton Christensen
- 23. 23 EXISTING OFFERINGS EXISTING USERS NEWUSERS NEW OFFERINGS EXTEND (evolutionary) CREATE (revolutionary) MANAGE (incremental) ADAPT (evolutionary) DISRUPTIVE INNOVATION ENTRANTS NEARLY ALWAYS WIN VALUE INNOVATION SOURCE: Clayton Christensen
- 24. 24 Incremental Innovation Evolutionary Innovation RevolutionaryInnovation Value Time SUSTAINING & DISRUPTIVE INNOVATION SOURCE: Mckinsey’s three horizons of growth
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- 26. 26 “If our institutionsare to survive, they’ll have to create new roadways. That’s a design problem — one that requires new rules of engagement with a broad set of collaborators.” Tim Brown, Ideo ”
- 27. 28 ” Growth comes from cultivatingan external network on top of your business.
- 28. 29 Own market revenue Time CostsRevenues Shorter productlife in market Internal development costs Own market revenue 0 Rising costs of innovation Internal development costs Closed Business Model SOURCE: Open Business Models: How to Thrive in the New Innovation Landscape by Henry Chesbrough
- 29. 30 CLOSED BUSINESS MODEL Costs Revenues New revenues Ownmarket revenue Cost & time savings from leveraging external development Internal development costs Internal & external development costs Own market revenue Acquire/Retain Spin-off JV revenue Revenue share OPEN BUSINESS MODEL
- 30. 31 GRAVITY FLOW CONNECTION Elementsof Success SOURCE: Three elements of a successful platform - HBR
- 31. 32 Business Model Value Creation PRINCIPLETACTIC Create value through continuous innovation. Sustaining & Disruptive Platform for open innovation.
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- 33. 34 Organize for agility andwisdom. PRINCIPLE
- 34. 35 In humans, wisdomand agility have an inverse correlation.
- 35. 36 How can weoperate and organise for wisdom & agility?
- 36. 37 Gain wisdom & agilityby failing often, and as fast and cheaply as possible.
- 37. 38 How can weorganise for wisdom & agility? MEASURE LEARN BUILD From plans to experiments.
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- 40. 41 Cross-functional teams deliver products,not projects. PRINCIPLE
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- 43. 44 Don’t make decisions basedon the HIPPOs SOURCE: Barry O’Reilley, Lean PMO: Managing the Innovation Portfolio
- 44. 45 Don’t make decisions basedon the HIPPOs SOURCE: Barry O’Reilley, Lean PMO: Managing the Innovation Portfolio
- 45. 46 Don’t make decisions basedon vanity metrics.
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- 47. 48 Organize for agility &wisdom. Cross-functional teams deliver working products, not projects. Reject vanity metrics. Operating Model PRINCIPLE PRINCIPLE PRINCIPLE
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- 49. 50 Brands have lost theircaptive audience.
- 50. 51 Consumers, employees, andinfluencers share their brand experiences.
- 51. 52 Success <> ProductionQuality
- 52. 53 Design & curate experiences. Meaningful,distinct, & delightful. PRINCIPLE
- 53. 54 Don’t talk about your brand,live it. Thoughtfully designed, meaningful, delightful, distinct experiences.
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- 55. 56 Evaluate the newdigital frontier, but design for the human. PRINCIPLE
- 56. 57 New opportunities to connectmeaningfully.
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- 58. 59 Moving beyond segmentsand personas. Put the personal back into personalisation.
- 59. 60 Understand why Ibuy, not what I buy.
- 60. 61 “Alexa, please pullup my shopping list.” “Sure! I’ve noticed you like Kale, is that right?” “Yes, I especially like Redbor Kale.” “May I suggest you add Amy’s Redbor Kale soup to your list?”
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- 65. 66 Brand PRINCIPLE PRINCIPLE PRINCIPLE CUSTOMEREXPERIENCE PRINCIPLE Evaluate the new digital frontier, but design for the human. Invest in insightful conversations. Now! Prevent unintended consequences. Design & curate experiences. Meaningful, distinct, & delightful.
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- 68. 69 New FrontierTHE END Thankyou, Inês
Editor's Notes
- #2 Hi, my name is Ines Almeida and I’m the Digital Transformation lead at APD. And in case you are wondering, both the accent and the attitude are Made in Portugal. This has been a awesome day, you have listed to a number of great talks, and networked with plenty of smart people, so I want to ensure we keen it light and upbeat. To that effect I’m going to kick off my talk by talking about . . .
- #3 Death and vampires…
- #4 You see, there’s all this talk about disruption, and how the lifespan of companies is getting shorter and shorter and yet the same tech innovation/disruption that are causing this shift are actually increasing human lifespan.
- #5 As a proud lifelong geek , I’m following the advances in regards to life-extension science from gene editing to parabiosis. Amazingly, the parabiosis technique is very successful in rodents. “By joining the circulatory system of an old mouse to that of a young mouse, and the older mouse get’s younger. Hmm
- #6 a Human Trial Is Underway . . . But please, don’t try this at home, just yet
- #7 So humans are living longer, and we haven’t totally figure out the ageing mechanisms. But do companies have to die? Companies are complex, but surely they are not as complex of human DNA.
- #8 And some companies seem to have figured out a way to reinvent and grow with no signs of ageing. Can we learn from them? Can we borrow and steal what is working for them without losing sign of our identity and values?
- #9 So what is a company’s fountain of youth, and how can we avoid unintended consequences, let’s face it, having to live in the dark and killing people is not very nice. . .
- #10 Today I will talk about 3 important areas a company must look at to survive and thrive. Business Model (how do we create value), Operating Model (how do we organise to win), and Brand (How do we attract and retain our customers) How technology is a key enabler to all these areas, but the real competitive advantage relies on our relentless customer focus in everything that we do.
- #11 Today I will talk about 3 important areas a company must look at to survive and thrive. Business Model (how do we create value), Operating Model (how do we organise to win), and Brand (How do we attract and retain our customers) How technology is a key enabler to all these areas, but the real competitive advantage relies on our relentless customer focus in everything that we do.
- #12 For each one of the three area I am going to talk about a number of useful principles and tactics that you might want to try out.
- #15 This is a very old model that used to describe the life cycle of a company. In the beginning In the early stages it exists somewhere in a cheap scrappy garage. There’s lack of cash, the team is over optimistic and inexperienced. You try to develop your product or service and then you get out to test product/market fit. And if you are talented and lucky the product take off. These are exciting times, there’s rapid growth, you hire fast to meet market demand. The structure is confusing and there’s plenty of waste. In some cases you are chasing market share instead of profit. PRIME The organization is growing and profitable Success may breed complacency The optimization process begins. Economies of scale, reuse, centralization, control . . . Late Prime Finance introduces controls for short term financial results The organization is becoming complacent Although it is not yet obvious the ‘aging’ process has begun Aristocracy Not making waves becomes a way of life. Outward signs of respectability take on enormous importance and affect the ability to change direction, you lost the agility to try things, to fail, to learn from failure and to adapt. The agility the company needs to become wise. The company is old, it lack agility, and wisdom.
- #16 So let’s explore this a bit further. And look at the s-curve of a product/service. What should we be doing as we move to optimisation.
- #17 We should absolutely continue optimise and rip the rewards of out current offerings but at this stage either we innovate or we will begin to die.
- #18 And the goal is to continuously innovate. As this is what drive a sustainable business. And by now you are thinking, “innovate more” well thank you very much for the platitudes Sherlock.
- #19 So how do we create more value?
- #20 We can fine tune our current set of offerings. Small improvements to drive more revenue or profitability. We might package products or services together to increase our profit margins. We call this incremental innovation.
- #21 You can also build and extend the set of offerings you are selling to you current customers. Airbnb just recently launched experiences, a complementary offer that is sure to add value to their existing customer base.
- #22 Or find new groups of customers that may be interested in your existing products, and example would be geo expansion.
- #23 This type of innovation in value creation is important, but it comes with some dangers. As we start packaging offerings to achieve better margins, our products become too complex, opaque and overpriced. We stopped focusing on the customers, we are inwardly focused, optimizing our business. A good example of this is the state of insurance products, it has become so bad that ASIC has recently issued a warning to financial institution.
- #24 And that is when we get disrupted, when someone comes with simpler, cheaper products, focusing on a small niche and then expanding from there.
- #25 This is why it is incredibly important that we invest in these three types of value creation innovation. The reason why many businesses only focus on the first two is because: They are able to see results sooner. Revolutionary innovation is likely to cannibalize their existing business. But either you disrupt from within or you will get disrupted
- #27 The rate of change has been dizzying, and today’s advanced technologies — AI, genomics, robotics, data science, the Internet of Things — have so outpaced our industrial-era organizations and infrastructure, they end up hitting institutional cul-de-sacs. The technologies don’t come to a halt, of course, they simply move on, seeking out other places where they race ahead. If our institutions are to survive, they’ll have to create new roadways.
- #29 How can we cultivate an external network on top of our business that is driving innovation and adding additional value to our customer base. The apple app store is a great example of this. The app developer ecosystem innovates continuously, adds value to apple, and in return the devs have access to tools, platform and an awesome sales channel.
- #30 You see, the speed of technology advancements makes it very expensive to drive everything in house. Yet, there is a need to deliver value to market faster. This means margins are getting smaller.
- #31 Unless you find a way to get others to innovation and generate value for you
- #32 Gravity: How well the platform attracts participants, both producers and consumers Flow: How well the platform fosters the exchange and co-creation of value Connection: How easily others can plug into the platform to share and transact
- #36 In humans, wisdom and agility have an inverse correlation. But is it the same for businesses?
- #37 How can we organise for wisdom & agility?
- #38 Learn and pivot as fast as you can.
- #41 3 to 5 y compelling visions, 3 to 6 month plans
- #43 Teams work together to to find the perfect balance between feasibility, viability and desirability.
- #45 Highest Pay Person Opinions
- #46 Highest Pay Person Opinions
- #48 Metrics: Conversion, retention and above all value to the customers
- #51 The time to tell about the brand is gone. Brands needs to shift from storytelling to storyliving
- #52 The brand story is told by the community via social sharing. And the audience is transitioning from text, to photo, to video, to live video.
- #53 Consumers prefer the raw, unrehearsed, unpolished, imperfect
- #56 Moments in the omnichannel experience where you must win now. Key opportunity spaces where you can delight.
- #58 Customer centered, non gimmicky, value driven and human centric
- #61 Data and AI can drive real insights into your customer base if you use it well. Yes I buy soup, chips and drink green juice, but the real insight here is that I’m mad about Kale.
- #62 ~ 25 million voice-activated speakers powered by AI will be sold in the year 2017.
- #64 To survive don’t compromise on your values, place the value you deliver to your customers and to your ecosystem first. Be on lookout to unintended consequences.
- #65 In this search for immortality try to be more like an elf and less like a vampire
- #66 Because if you don’t eventually either your customers, or your partners, regulators or the government will slay you
- #68 Do we want to be paralyzed by fear, or do we want to get curious. To lean into the possibilities. How hard can this really be. This is business, not human DNA. We can look for models, patterns to help us grow and thrive
- #69 Or you can get curious and excited and the possibilities. You explore ways with your teams where Technology can be the enabler, but not the gimmick, it should be invisible. Where you continuously renew by building on top of your strong foundation. Where you find ways to deliver meaningful, delightful moments that connect and inspire.