Digital Strategy
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Presented at Digital2015, Riga, Latvia on 09/09/2015. The need for adaptive strategy model, innovation in business model and integrating digital.
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Digital Strategy
- 1. Digital Strategy & Execution Gary McRae | gary@mcr.ae | @mcraegj
- 2. We all know strategy is easy…..
- 3. 19% 59% 22% DIGITAL LEADER Yes No Unknown Source: Accenture Strategy Executive 2015
- 4. So why does it feel like I’m swimming against the tide?
- 5. Strategy is all about technology, right?
- 6. Or is strategy all about marketing?
- 7. “Strategy is the discipline of setting a direction, lining up resources and executing commitments” - Accenture, Being Digital, 2015
- 8. But we all know that digital is… different
- 10. Classical strategy works in a Stable environment
- 11. Companies should pay attention to areas where startups are identifying and addressing a customer pain point. - Rita McGrath Professor, Columbia Business School
- 12. Disruption is often not recognized until it is too late
- 13. Disrupt others before they disrupt You
- 14. Incumbents often believe they are immune from disruption
- 15. Incumbent success 700,000 subscribers Two-thirds Digital - Digital transformation, 2014
- 16. Bank of America 236,580 employees 52% tech related - Institutional Investor, 2014
- 17. We are in a new economy of sharing over owning
- 18. Hilton Hotels. 93 years 600,000 rooms Source: Capgemini, Digital Transformation Review, 2015
- 19. Airbnb. 4 years 900,000 rooms Source: Capgemini, Digital Transformation Review, 2015
- 20. Need for speed
- 21. Minimally viable products Rapid testing Accelerating failures Scale up winners
- 22. Firms need to be adaptive
- 23. We ensure that we continually review our business model Caspar de Bono, Managing Director, B2B at the Financial Times
- 24. Strategy must encompass business model innovation
- 25. Strategy must allow rapid prototyping
- 26. Disrupt in your own industry
- 27. Digitize end to end
- 28. Enrich, use, exploit data
- 29. Culture, employees, partners, must bring value to customers
- 30. - Disruption is accelerating - Strategy needs to adapt - Agility in strategy, business model - Minimally viable products - Exploit data
- 31. Thank you Gary McRae | gary@mcr.ae | @mcraegj
Editor's Notes
- Introduction. 1st strategy was “suck it and see”. Timex.
- Often hear how easy strategy is. So many books, so many experts but is it really that simple?
- Top Fortune 500 companies – have talent, have budgets, have market share yet only 19% are digital leaders
- Why in reality does it feel so difficult? The environment in which we operate has shifted, continues to evolve
- If I use Salesforce, a new CMS, or technology platform
- Content strategy, paid media strategy, seo strategy, digital marketing strategy…..
- Strategy is digital – no need to separate as if digital is an add on. Where am I going, what do I need and how will I do it.
- Despite the intellectual understanding that digital and strategy are not separate businesses still think digital is different. BS
- Regardless of position you are faced with similar if not the same challenges – you still have to have direction, resources and execution. Defending is difficult, hands up, moving fast….
- Achieving sustainable competitive advantage in a fast moving and changing environment is not realistic. Japan 1980’s through operational efficiency – later it was copied and competitive edge was lost.
- Imperative to disrupt – defensive positions no longer work. Pain points do not have to be major – access, change in behaviors'. Anything that is a barrier.
- So many examples of this. Inward looking.
- Borders SMT – stores, coffee, downtown, retail parks.. Blockbuster – late fees!
- Just seen how Borders and Blockbuster think they are immune. Taxi industry – same issues - Uber. IPTV. Doesn’t have to be this way. Incumbents are NOT as a disadvantage…
- FT 2014 – highest subscriptions ever 700,000 – 2/3rd digital
- Real understanding of customer pain points. Closing branches yet increasing access – app – deposit a check.
- Zip cars, Spotify, Pandora, Netflix. iTunes set up to buy a song, Spotify to rent music.
- And don’t own any of them. Example of expanding market rather than increasing market share. Future challenge to hotels – business travelers' – chains implementing millennial friendly concepts – open shared spaces similar to co-working
- Designing strategy, product design, testing, dropping failures and scaling winners
- How do you execute in a disruptive environment at at speed – what does that look like?
- If not classical then Adaptive strategy – temporary competitive advantage and repeating– visionary, renewal, shaping Google – classic example
- FT 2014 – highest subscriptions ever 700,000 – 2/3rd digital. Making the paper in its own right profitable, doubled the price. Competing on price is rarely beneficial.
- Amazon. Outsourced distribution, then own distribution network, website and fulfillment for toys r us and borders, Amazon prime
- Prototyping is minimally viable products / services. This allows you to see what works, what doesn’t and scale. Taking significant time to research, deploy resources and complete the “perfect” product at launch is high risk. What if it fails? Can you afford it to not work?
- You have the industry knowledge, experience, talent and the motive. Disrupt before the competition disrupts you. BOA an example of how they are shaping banking – the disruption doesn’t have to come from the outside.
- Marketing is leading the way, operations, HR, the entire value chain. Technology in itself is not a solution. Merely a means.
- Use, exploit, enrich, scale but most of all – be pushing data capabilities. Actionable insights – not just data for the sake of it
- Empowering employees, culture of accepting risk, hiring digital talent and commitment to training, value chain is collaborative and focused on bringing value to customers.
- Summary