CEO Reflections (2) Digital Value Chain

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Digital manufacturing and design are drawing attention from innovators and investors alike. Sometimes referred to as “Industry 4.0” (especially in Europe) or as the “Industrial Internet” (General Electric’s term), these labels reflect a basket of new digitally-enabled technologies that include advances in [a] production equipment (including 3-D printing, robotics, and adaptive CNC mills), [b] smart finished products (such as connected cars and others using the Internet of Things), and [c] data tools and analytics across the value chain.

These technologies are changing how things are designed, made, and serviced around the globe. In combination, they can create value by connecting individuals and machines in a new “digital thread” across the value chain—making it possible to generate, securely organize, and draw insights from vast new oceans of data. They hold the potential for disruptive change, analogous to the rise of consumer e-commerce. In 2010, when some two billion people connected online, the Internet contributed approximately $1.7 trillion to global GDP.  What’s in store when 50 billion smart machines—deployed across factory floors, through supply chains, and in consumers’ hands—can connect with one another?

Reference: Digitizing the value chain.

My intent in this article is neither to summarize it nor even comment on it.  Rather, I mean to prompt CEOs and their leadership teams to pause and reflect on their business and industry, their market and competition, and their people and resources vis-a-vis the advent of digital value chain.

• How do you understand what is going on within and outside your company, and what is your experience of it, both individually and collectively?
• What are gaps in your understanding, which require bridging, and what haven't you experienced, which require experiencing?
• What meaning can you draw from such reflection and understanding, that is, in relation to the vision, the purpose, and the values that are at the heart and soul of your business? 
• Besides your analytic or rational thinking hat, what does your intuitive, creative or non-rational brain say about all of this?  
• What diverse or critical points of view do you need to engage in this reflection, that is, from your people, networks, advisers, competitors, customers, and resources?
• What would you like to do about it, or more pointedly what do you need to do about it; that is, what is it that you aim to accomplish?
• How can you best accomplish what you want and need to accomplish, given the capability, motivation and energy in your current and prospective people?
• What other reflective questions do you need to ask yourselves?

So, instead of a summary from me, CEOs can read this short article themselves and come up with their own unique, relevant commentary.
 

CEO Reflections (1) Hyperscale Business

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At the extreme are hyperscale businesses that are pushing the new rules of digitization so radically that they are challenging conventional management intuition about scale and complexity. These businesses have users, customers, devices, or interactions numbered in the hundreds of millions, billions, or more. Billions of interactions and data points, in turn, mean that events with only a one-in-a-million probability are happening many times a day. 

Taken individually, each of these businesses seems like a special case. After all, how many companies can be like Google, which processes around four billion searches a day; Twitter, handling 500 million tweets a day; or Alibaba, the world’s largest e-commerce market, which facilitated 254 million orders in one day?

Reference: Competition at the digital edge: 'Hyperscale' business.

My intent in this article is neither to summarize it nor even comment on it.  Rather, I mean to prompt CEOs and their leadership teams to pause and reflect on their business and industry, their market and competition, and their people and resources vis-a-vis the advent of hyperscale business.

• How do you understand what is going on within and outside your company, and what is your experience of it, both individually and collectively?
• What are gaps in your understanding, which require bridging, and what haven't you experienced, which require experiencing?
• What meaning can you draw from such reflection and understanding, that is, in relation to the vision, the purpose, and the values that are at the heart and soul of your business? 
• Besides your analytic or rational thinking hat, what does your intuitive, creative or non-rational brain say about all of this?  
• What diverse or critical points of view do you need to engage in this reflection, that is, from your people, networks, advisers, competitors, customers, and resources?
• What would you like to do about it, or more pointedly what do you need to do about it; that is, what is it that you aim to accomplish?
• How can you best accomplish what you want and need to accomplish, given the capability, motivation and energy in your current and prospective people?
• What other reflective questions do you need to ask yourselves?

So, instead of a summary from me, CEOs can read this short article themselves and come up with their own unique, relevant commentary.
 

Christopher Vollmer (3) Digital Mistakes

Companies are not getting enough value out of their investments in digital. Christopher Vollmer, Managing Director for Strategy&’s Digital Services, shares the top three digital mistakes that are holding companies back.

The moral to the story that Vollmer relates is this:  Proceed with thought, caution and courage.  Indeed the successful general in the field of battle has a bias for action, but he engages in war thoughtfully and planfully, along with bravely and expediently.  Moreover, success depends on an ongoing review, and revision as necessary, of his battle plan, and not just his battle plan, but also his inner assumptions (beliefs) and desires (needs).  Kaiser Wilhelm and Adolf Hitler stirred up national fervor among Germans in the last century, but their bellicose bent masked their grandiose persona.  It was the latter that was their downfall, and the cause of two generations of suffering and humiliation for their people, resulting from World War I and World War II. 

So before you as the CEO get caught up in action, such as a big investment in new technology, initiatives in digital transformation, and misguided focus in relation to customers, it is important to (Step 1) begin with the end in mind (clarify carefully what you're trying to achieve; (Step 2) walk backwards to map the pathways (i.e. from where you need to be to where you are now); and (Step 3) walk these pathways (act forthrightly and expediently, and also mindfully and honestly, on what it is you need to do to get from here to there).  These three steps comprise The Core Algorithm, and it is a meta-methodology for weighing digital transformation:  meta-, because The Core Algorithm puts vision and mission; priorities, aims and values; and people, their capabilities and potential before digital transformation, not necessarily to diminish the role or impact of the latter, but instead to put it in its proper context.  In other words, The Core Algorithm is a methodology for helping you determine what is indeed the best methodology to employ vis-a-vis your vision etc.
 

Christopher Vollmer (2) Digital Trends

Looking to give your company a digital edge? Focus on the top three digital trends shaping the future – mobile, personalization, and data analytics. Watch Christopher Vollmer, Managing Director of Strategy& Digital Services, explain his key insights on how to get ahead in the digital race.

Vollmer does a fine job of simplifying and summarizing these digital trends.  However, the CEO appreciates that if his or her company wishes to embark on a digital transformation, then there has to be broader look and deeper dive into what these trends mean vis-a-vis the company.  Mobile is ubiquitous indeed, and hordes of companies are looking into or are being advised to look into it, in order to tease out market opportunities.  I think this poses two challenges: (a) How do you differentiate your insight, strategy and approach from those of your competitors, that are broadly and deeply eying these trends?  (b) Mobile is not the only device that customers are using, so where do traditional fare like desktops or laptops, even TV and radio fit for your target and prospective markets?

Personalization and data analytics really go hand in hand.  While Vollmer is right that companies ought to provide a personalized experience for their customers, this is a more complex, sensitive issue than he covered in short order.  From our social media activity, to our online itinerary and device usage, there is an unbelievable amount of information we, all of us, generate and companies ought to be licking their chops about how much they can know about us.  But how must they, or how can they, draw actionable insight and ensure business impact from a veritable googol of data?  Furthermore, whereas effective, value-add data analytics requires both statistical prowess and business savvy, personalization demands a judicious balance between access and privacy.  Too many companies over the past few years, from Google to Facebook, have breached customers' trust.  So how do you as the CEO create a personalized experience without being creepy, illegal or unethical?
 

Christopher Vollmer (1) Digital Disruption

It’s time to stop wasting money and start your company’s digital transformation. Christopher Vollmer, Managing Director of Strategy& Digital Services, explains how to start using digital to fuel your company’s growth today.

Digital disruption is, according to Vollmer, about (a) great change driven by technology, (b) huge business model and product innovation, and (c) significant changes in customer behavior.  The disruptor may be an up-and-coming start up or it may be a major player in an adjacent industry that, up until now, wasn't on your competitive radar.  In either case, if you're the CEO of an established company, you undoubtedly have a bulls eye on your back, and if you're standing still to boot, you make your company a much easier target for an upstart or a flank attack.

So what are you to do?  

First, it isn't just making improvements to your current business, but rather it's re-imagining how you do business, where you do business, and even what business you do.  Second, you must put digital at the center of your strategy.  I believe digital should be well within your radar, but what should be dead center depends a lot on your vision and mission; priorities, aims and values; and people, their capabilities and potential.  Finally, you must keep customers front and center.  The key phrase from Vollmer is human-centered design thinking.  You as the CEO must engage your company with customers on creating, testing and driving product and service development.  While Steve Jobs seem to have eschewed the very things Vollmer suggests, he had an uncanny ability to discern deeply what mattered the most to customers and he had the marketing prowess to convince them that Apple had what mattered the most to them.  Which is actually what Vollmer suggests.
 

Cloud Computing (3) Business Priorities First

Cloud-based solutions can be sold into the lines of business, spun up on a credit card and never touch the technology team. Is this changing the role of IT?

Wow if the prediction that Chief Marketing Officers are likely to carve out a bigger technology budget by 2017 than their Chief Information Officer colleagues truly becomes a reality, it will radically alter the value, strategy and operations of said CIOs.  The gentlemen interviewed in the video were demure and diplomatic, to be sure, but if these CIOs don't act commensurate with this evolution in cloud computing, then they and their organizations will go the way of dinosaurs thousands of millennia ago.  For example, Tim White of Lundbeck referred to technology hurdle: In my experience technology organizations can be obstacles with their antiquated machinery and bureaucratic process.  So putting access to technology with more sophisticated tools and more efficient uses squarely in the hands of CMOs is indeed removing that hurdle.

Tim Minahan from SAP conveys a message that is worth emphasizing:  Don't think of cloud computing as rip and replace, that is, as simply migrating the same old tools and applications from local servers to centralized ones (i.e. the cloud).  Instead, review strategy and operations carefully, and make informed decisions on how to enhance the overall business process vis-a-vis such priorities as strong customer relations and experiences.  For one, it may mean keeping certain tools and applications where they are, but then drawing on the cloud to extend their impact.  It may also mean reviewing and modifying our business models.  In other words, using the language of The Core Algorithm, cloud computing must serve business ends and it must not be the end in itself.
 

Cloud Computing (2) Data, Services and Technology

Cloud computing’s true value to business is becoming clearer by the day: faster innovation, new collaboration platforms and new engagement models are all creating a better customer experience.

Just as colleagues and managers in an organization can share knowledge via cloud computing, so can customers do their research, collaborate with others, and tap social media before making any decision to purchase products or services from that organization.  The old sales and marketing campaign long fell by the wayside, it seemed, with the emergence of Google and Wikipedia, plus Facebook and Twitter.  The evolution of customer behavior and experience prompted - undoubtedly drove - the need for more specialized data, more real-time apps, and more sophisticated technology, all of which, for small to medium size enterprises, may be too cost-prohibitive to acquire outright.  I see more clearly now than before that cloud computing is rife with options and reach.