- Board member for companies seeking expertise in social, mobile, cloud and big data.
- Strategic advisor to company leaders wanting to pivot their business models to benefit from digital technologies. Clients include (past and present) AT&T, Microsoft, GE Healthcare, Deloitte, ESPN, and Goldman Sachs.
- Technology investor in social, mobile, cloud and big data companies; portfolio companies manage 15,000 social networks with 40 million members for 150 leading brands.
- Author and speaker: co-authored 5 books and 20 ebooks; published 1,100 articles; appeared on CNN, CNBC, NPR, and Bloomberg TV; delivered 500+ keynote speeches globally.
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Crossing the Digital Divide: Harnessing the Power of Networks to Quadruple Value
- Many leaders are unaware of the full impact of digital technologies and their impact on their business model
- The scope of the change business leaders are facing is on the scale of the Industrial Revolution. It is a sea change that will require new ways of co-operating with customers and new measures that focus on network participation and engagement. Most leaders came of age in the old world, where the ownership and control of assets was the most important component of their business model. Now, the focus has shifted toward 1) forging strong relationships with customers and 2) finding creative ways to leverage those relationships to create value.
For example, an airline that only measures revenues per seat will need to expand its thinking. They will need to use big data capabilities to measure their customers' travel habits, how often they travel, to where, and with whom they travel. This requires a change in perspective from an asset-orientation (number of planes and seats) to a network-orientation (number of travelers and locations). This is mental model change for leaders. They need to change their focus from what they thought was creating value (physical assets and services) to today's value creating assets: IP and customer networks.
- Companies need to combine big data with financial data to fully appreciate what is happening in their company
If you ask most companies about their engagement with customers they usually cannot provide much data that is unrelated to the immediate sale. If you ask what process they're re-engineering, what they're manufacturing, or what they're optimizing, they can tell you in great detail. This type of information, as useful as it is in some contexts, fails to harness a fraction of the power of networks and leaves opportunities swaying in the wind.
Many boards of companies spend the majority of their time collecting, advising, interacting, monitoring, and analyzing the least valuable pieces of data because financial data is retrospective data. It is not prospective data. It indicates what happened yesterday, not what's likely to happen tomorrow. Social, networked data is pre-point-of-sale data. It is what people are thinking about before they buy something and this is the a key to maintaining your relationship with the customer in a networked world.
- Companies have a bias towards physical and material assets versus intangible and virtual assets which causes them to underinvestment in their future growth.
Most companies have biases around risks and investments. Research shows that companies say that they have a desire to invest in customer and intellectual property assets. But only 5 percent of companies are network-based, while 20 percent are technology-based. Three-quarters of all businesses are still in the industrial or service economy and continue to have a bias toward their traditional ways of measuring assets. Companies have the opportunity to invest in customer networks, but despite what they say, they continue to invest in people and IP.
They invest in more traditional assets because they know how to measure them and they appear to be less risky. A company's risk propensity can make the difference between those firms that are valued at eight times revenue and those which are evaluated at one-half or one-quarter as much.
- Most organizations innovate their products and services but really need to innovate their business model to succeed in today's hyper connected, digital world.
Most organizations are in constant motion, apparently believing that activity equals accomplishment. But activity without a clear focus, and absent forward-looking data that illuminates the path forward, is simply a waste. Our research suggests that great companies have less activity. They know how to use the word "no."
Many of the best CTOs are excellent at saying "no." For example, consider the CTO who understands that her company is going toward the cloud, because that will offer the most flexibility. The CTO knows that the future is in open source. When nervous fellow executives want software that is both on-premises and off-premises at the same time, the CTO knows that the right answer is “no" since the company cannot manage so many versions of Microsoft across 10,000 desks.
The most difficult thing is to achieve clarity in the midst of noise. Organizationally, the initiatives, with their reports, and presentations, and metrics can generate more noise than signal. Sometimes the old saw is true: less is more.
- Many companies simply lack the skills to cross the digital divide both at the board and senior executive level which they need to address to succeed.
Once a company gains clarity and moves toward defined objectives they then must decide what types of people they need to execute the vision and the types of competencies that are necessary to drive forward. Acquiring these skills and incorporating them into the organization is often an obstacle.
Innovative business models inevitably require new skills and in many cases the owners of those skill sets are people who are very different from the profile within the company to date. Just finding the right fit is a difficult and expensive exercise. Companies that build, as a corporate capability, the capacity to find, incorporate and leverage new skill sets will enjoy an advantage in a world of rapidly evolving business models.
- The rapid and accelerating pace of technological change creates extraordinary risk for the companies that are not keeping pace.
- The rate of technology change creates extraordinary risks for boards and executives. Not just execution risk, but now technology companies are becoming direct competitors with companies that aren't members of traditional high-tech domains. Companies are overwhelmed by new technologies, new systems, new services, new applications, by the "Internet of everything." Which one do you choose? There are just too many options and they all appear to make sense.
Business models are now changing as fast as technology. The battle ground of innovation has shifted from technologies themselves – the intellectual property of developing and owning technology – to business models. New business models are increasingly leveraging the capacity of customers to become genuine partners in creating new products, new services, and yet newer and more innovative models.