SlideShare a Scribd company logo
​Karel Dörner
​Principal, McKinsey Digital
Digital Transformation @ Scale
LINKEDIN EXECUTIVE SUMMIT
MUNICH, 8 September 2016
McKinsey & Company 2
Digitization of everything
Cybersecurity
threats
McKinsey & Company 3
More digitization to come as more technologies
(mostly digital) continue to transform the economy
SOURCE: McKinsey Global Institute analysis
Disruptive Dozen – Selected for scope and scale of impact
(next 10 years)
Machines working for us
Advanced
robotics
Autonomous and
near-autonomous
vehicles
3D printing
Next-generation
genomics
Advanced materials
Changing the building
blocks of everythingIT and how we use it
Mobile internet Cloud
technology
Internet of Things
(IoT)
AI, Machine-
learning
Automation of
knowledge work
Energy
storage
Rethinking energy comes of age
Advanced oil and
gas exploration
and recovery
Renewable energy
Blockchain/
Cryptocurrencies
Human-Computer
Interfaces (AR, VR etc)
Digital IDs/ Biometrics
Quantum Computing
…
More…
McKinsey & Company 4SOURCE: McKinsey
Digital maturity
of the sector
Evolution over time
Digital is fundamentally affecting all industries –
with varying speed and scope
HealthPublic
sector
Oil and gas
Chemicals and agriculture
Assembly
Retail distribution
High tech
Retail banking
Telecoms
Media
Tourism
Automotive
Winner takes
it all
dynamics
McKinsey & Company 5
Between industries,
a large gap between digital leaders and the rest
SOURCE: USDEC
An objective and
comprehensive
measure of digital
maturity
correlating with
financial
performance
What is the
Digital
Quotient?
Pharma/
Medical
Products
Distribution of Digital Quotient score by industry (global)
Points (out of 100)
32
49
Global average: 33
Insurance Banking Transport
And
Logistics
Media/
Entertain-
ment
Telecom Retail Travel/
Hospitality
28
31
35
36
37
42
McKinsey & Company 6SOURCE: Forbes, McKinsey interview October 2015
Digital matters also for industrial companies
"Industrial companies
are in the information
business whether they
want to be or not."
Jeff Immelt (CEO GE)
McKinsey & Company 7
Digital “haves” and “have-mores”
3 × faster profit and
margin growth
2 × faster wage growthHigher productivity
and innovation
Faster revenue
growth
SOURCE: McKinsey Global Institute analysis
McKinsey & Company 8
How do we get started? –
We hear a lot of questions on this …
SOURCE: McKinsey Digital
With what digital field of action do I start?
Should I found a new venture?
Should I build a digital business unit?
What capabilities do I need?
Should I hire a Chief Digital Officer?
How should I adjust my organization?
How do I lead a digital enterprise?
How do I make it an holistic and effective
transformation?
How do I make a quick start?
McKinsey & Company 9
We see 6 patterns for success
SOURCE: McKinsey analysis
Define a clear
target picture
Follow and understand
the customer
Use Digital to unlock
big potential in internal
processes
Think "Quan"
and "Qual" together
Organize for Digital
Get a Digital state
of mind
1 2 3
4 5 6
McKinsey & Company 10SOURCE: McKinsey DOTMatrixTM
Digitization can disrupt industries when it changes
the nature of supply, demand, or both
Demand Supply
Degree of change in the nature of supply and demand
Modest
Extreme
Make new
markets
Unconstrain
supply
Hyperscale
platforms
Create new
value pro-
positions
Reimagine
business
systems
Undistort
demand
1
McKinsey & Company 11
1 Average by category
SOURCE: McKinsey Channel Partner database, experts interview, press clippings
Amazon has a strong value position in B2C and B2B
Unbeatable assortment
Local, segment-specific stores
2
B2C
-
2,150 1
129 1
94%
B2B 900
10,000
-91%
McKinsey & Company 12
Next generation Carrera-Bahn: Wanna play?
SOURCE: Anki OVERDRIVE
Do you know your
customers?
Creating customer
profiles through
▪Gaming behavior
▪Locations
▪Actions (in-app sales)
▪...
2
McKinsey & Company 13SOURCE: McKinsey analysis
Artificial intelligence to transform service operations
Digitization
of service ops:
>64% of enquiries
in service center
resolved by AI
3
McKinsey & Company 14
Think quantitative! Think qualitative!
Think both quan-
& qualitative!
Unleash your full potential – think "Quan" and "Qual" together4
SOURCE: McKinsey analysis
McKinsey & Company 15
Spotify has achieved an agile structure
and has become a role model for others
SOURCE: Scaling Agile @ Spotify, Oct. 2012 and May 2014, YOUSE
5
Overview of Spotify’s SW
development “organization”
YOUSE – Digital Insurance company built based
on the Spotify model
McKinsey & Company 16SOURCE: Press research, McKinsey Digital
Hire a CDO – but get it right!
Digital transformation across functions and departments
Especially, marketing and
technology
Change agent, transform
traditional businesses into
digital world
What?
How?
Extensive authority
Direct line to CEO
Disrupt functional silos
Needs business
responsibility or doomed to fail
5
McKinsey & Company 17
Six key attributes characterize a digital state of mind
SOURCE: McKinsey analysis
6
Openness &
transparency
Fail-fast
mentality
Quick
delivery
Experi-
mentation
Customer
centricity
Fact-based
decisions
McKinsey & Company 18
The insightful "eat" the HIPPO1
SOURCE: McKinsey
6
1 Highest paid person's opinion
McKinsey & Company 19
Winning together – successful cooperation
between startups and corporates
SOURCE: McKinsey analysis
6
Startups leverage corporates‘
assets …
 Distribution channels
 Stable business processes
 Network
 Financial basis
… and corporates learn
from startups
Disruptive business
models
Flexibility
Agility
Scalability of software
solutions
Photo:
Dimitri Daniloff
McKinsey & Company 20
Digital Transformation – It’s difficult, but it's feasible!
SOURCE: Press clipping
Thank you!
McKinseyDigital.com

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LinkedIn Executive Summit in Munich: Digital Transformation @ Scale

  • 1. ​Karel Dörner ​Principal, McKinsey Digital Digital Transformation @ Scale LINKEDIN EXECUTIVE SUMMIT MUNICH, 8 September 2016
  • 2. McKinsey & Company 2 Digitization of everything Cybersecurity threats
  • 3. McKinsey & Company 3 More digitization to come as more technologies (mostly digital) continue to transform the economy SOURCE: McKinsey Global Institute analysis Disruptive Dozen – Selected for scope and scale of impact (next 10 years) Machines working for us Advanced robotics Autonomous and near-autonomous vehicles 3D printing Next-generation genomics Advanced materials Changing the building blocks of everythingIT and how we use it Mobile internet Cloud technology Internet of Things (IoT) AI, Machine- learning Automation of knowledge work Energy storage Rethinking energy comes of age Advanced oil and gas exploration and recovery Renewable energy Blockchain/ Cryptocurrencies Human-Computer Interfaces (AR, VR etc) Digital IDs/ Biometrics Quantum Computing … More…
  • 4. McKinsey & Company 4SOURCE: McKinsey Digital maturity of the sector Evolution over time Digital is fundamentally affecting all industries – with varying speed and scope HealthPublic sector Oil and gas Chemicals and agriculture Assembly Retail distribution High tech Retail banking Telecoms Media Tourism Automotive Winner takes it all dynamics
  • 5. McKinsey & Company 5 Between industries, a large gap between digital leaders and the rest SOURCE: USDEC An objective and comprehensive measure of digital maturity correlating with financial performance What is the Digital Quotient? Pharma/ Medical Products Distribution of Digital Quotient score by industry (global) Points (out of 100) 32 49 Global average: 33 Insurance Banking Transport And Logistics Media/ Entertain- ment Telecom Retail Travel/ Hospitality 28 31 35 36 37 42
  • 6. McKinsey & Company 6SOURCE: Forbes, McKinsey interview October 2015 Digital matters also for industrial companies "Industrial companies are in the information business whether they want to be or not." Jeff Immelt (CEO GE)
  • 7. McKinsey & Company 7 Digital “haves” and “have-mores” 3 × faster profit and margin growth 2 × faster wage growthHigher productivity and innovation Faster revenue growth SOURCE: McKinsey Global Institute analysis
  • 8. McKinsey & Company 8 How do we get started? – We hear a lot of questions on this … SOURCE: McKinsey Digital With what digital field of action do I start? Should I found a new venture? Should I build a digital business unit? What capabilities do I need? Should I hire a Chief Digital Officer? How should I adjust my organization? How do I lead a digital enterprise? How do I make it an holistic and effective transformation? How do I make a quick start?
  • 9. McKinsey & Company 9 We see 6 patterns for success SOURCE: McKinsey analysis Define a clear target picture Follow and understand the customer Use Digital to unlock big potential in internal processes Think "Quan" and "Qual" together Organize for Digital Get a Digital state of mind 1 2 3 4 5 6
  • 10. McKinsey & Company 10SOURCE: McKinsey DOTMatrixTM Digitization can disrupt industries when it changes the nature of supply, demand, or both Demand Supply Degree of change in the nature of supply and demand Modest Extreme Make new markets Unconstrain supply Hyperscale platforms Create new value pro- positions Reimagine business systems Undistort demand 1
  • 11. McKinsey & Company 11 1 Average by category SOURCE: McKinsey Channel Partner database, experts interview, press clippings Amazon has a strong value position in B2C and B2B Unbeatable assortment Local, segment-specific stores 2 B2C - 2,150 1 129 1 94% B2B 900 10,000 -91%
  • 12. McKinsey & Company 12 Next generation Carrera-Bahn: Wanna play? SOURCE: Anki OVERDRIVE Do you know your customers? Creating customer profiles through ▪Gaming behavior ▪Locations ▪Actions (in-app sales) ▪... 2
  • 13. McKinsey & Company 13SOURCE: McKinsey analysis Artificial intelligence to transform service operations Digitization of service ops: >64% of enquiries in service center resolved by AI 3
  • 14. McKinsey & Company 14 Think quantitative! Think qualitative! Think both quan- & qualitative! Unleash your full potential – think "Quan" and "Qual" together4 SOURCE: McKinsey analysis
  • 15. McKinsey & Company 15 Spotify has achieved an agile structure and has become a role model for others SOURCE: Scaling Agile @ Spotify, Oct. 2012 and May 2014, YOUSE 5 Overview of Spotify’s SW development “organization” YOUSE – Digital Insurance company built based on the Spotify model
  • 16. McKinsey & Company 16SOURCE: Press research, McKinsey Digital Hire a CDO – but get it right! Digital transformation across functions and departments Especially, marketing and technology Change agent, transform traditional businesses into digital world What? How? Extensive authority Direct line to CEO Disrupt functional silos Needs business responsibility or doomed to fail 5
  • 17. McKinsey & Company 17 Six key attributes characterize a digital state of mind SOURCE: McKinsey analysis 6 Openness & transparency Fail-fast mentality Quick delivery Experi- mentation Customer centricity Fact-based decisions
  • 18. McKinsey & Company 18 The insightful "eat" the HIPPO1 SOURCE: McKinsey 6 1 Highest paid person's opinion
  • 19. McKinsey & Company 19 Winning together – successful cooperation between startups and corporates SOURCE: McKinsey analysis 6 Startups leverage corporates‘ assets …  Distribution channels  Stable business processes  Network  Financial basis … and corporates learn from startups Disruptive business models Flexibility Agility Scalability of software solutions Photo: Dimitri Daniloff
  • 20. McKinsey & Company 20 Digital Transformation – It’s difficult, but it's feasible! SOURCE: Press clipping Thank you! McKinseyDigital.com