Eestec digital disruption 22-7-2013

@lionzan

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DigitalDisruption

Leonardo Zangrando@lionzan

@lionzan

#didi13

Leonardo Zangrando, MBA, MEng● Business Strategist● People Trainer● focus on Innovation & Entrepreneurship

– bridging innovation strategy and implementation– shaping the organisation for innovation– providing the tools for innovation– training and coaching innovators

Hands-on, active-learning seminars, workshops and courses on innovation & entrepreneurship for international organisations, in English, Italian and Spanish.● Business Model Innovation● Adaptive Development of Innovation Ideas● Early Market Validation of Innovation Ideas● Digital Disruption● Social Selling

● I developed my strategy expertise since 1999 as consultant to global corporations on business strategy and sales & marketing strategy.

● In the same timeframe I took the opportunity to become involved in hands-on management projects for business innovation, acting as interim CTO, COO and CEO.

● I built my people development skills by training, assessing and coaching large B2B sales forces since 2008, on strategic selling and key account management. In the same area I recently developed training programs on digital disruption and social selling.

● Since 2010 I focused on innovation and entrepreneurship, pioneering the convergence of these 2 areas, and now I help companies reshape their innovation activities and structure building on an entrepreneurial model.

● In 2013 I developed the "Learning From Failure" HR management hack with Gary Hamel's MIX and the CIPD around the theme "Hacking HR for Adaptability Advantage."

@lionzan

#didi13

Digital

Disruption

this presentation under Creative Commons Attribution-NonCommercial-ShareAlike 3.0 UnportedCC BY-NC-SA 3.0 Leonardo Zangrando check terms on http://creativecommons.org/licenses/by-nc-sa/3.0/

EESTEC Mobile Summer SchoolUniversity of Trieste

22 July 2013

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e dit:

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WHOOPS! No, not this

e dit:

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e dit:

a mali

s pino

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No NEO, not even this one...

e dit:

a mali

s pino

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We'll talk about how Digital

is Disrupting the way companies

Innovate today

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and yes, NEO, they also have to choose...

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the blissful ignorance of illusionor

embracing the painful truth of reality

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the blissful ignorance of illusionor

embracing the painful truth of reality

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How do companies innovate?

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the traditional modelabout who does innovation...

structured

internal

R&D LabsNew Product Dev.

MarketingLaunch

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...is changing

Open InnovationLicensingAcquisition

CommunityCo-creation

Intra-preneursinternal

structured

external

unstructured

R&D LabsNew Product Dev.

MarketingLaunch

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What do companies innovate?

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also the innovation focus...

ValueCreation

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...is expanding

ValueCreation

ValueDelivery

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...is expanding

ValueCreation

ValueDelivery

Value Capture

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...is expanding

ValueCreation

ValueDeliveryVa

iti on

Value Capture

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but other challenges are coming

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Who is innovating?

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there are more opportunities...● in the past you needed a large infrastructure to innovate● and few people were in the position to do it

Today a digital innovator has more innovation opportunities than an “analogic” innovator in the past

Larger scope of innovation “objects”

Larger number of potential innovators

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there are more opportunities...● in the past you needed a large infrastructure to innovate● and few people were in the position to do it

● today a digital innovator has more innovation opportunities than an “analogic” innovator in the past

● larger scope of innovation “objects”● larger number of potential innovators

10x? 100x? 1000x?

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...at a lower cost● innovation in the digital era is much cheaper than

in the analogic era– the tools for innovation are substantially free– the time required to innovate is substantially shorter

● the cost of innovation is drastically reduced

1/10? 1/100? 1/1000?

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..leading to dramatic results

10x 1/10more innovators of cost

100xinnovationcapacity

“analogic”innovation

digitalinnovation

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“Why should I innovatewhen I am the ownerof the infrastructure?”

e dit:

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“Why should I innovatewhen I am the ownerof the infrastructure?”

e dit:

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“Why should I innovatewhen they are

crazy for it?”

e dit:

if ter

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“Why should I innovatewhen they are

crazy for it?”

e dit:

if ter

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a repeating storyhow could Chinese manufacturing industry

surpass Western one?

e dit:

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a repeating story

how could Chinese manufacturing industry surpass Western one?

Cheap labor cost

Western labor cost is much higher

Replication of existing productive systems and use of existing distribution platforms

The cost of developing these systems and platforms has already been covered by Western economy in the past

Market already developed The cost for developing the markets had already been covered by Western economy

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a repeating storytoday we notice a similar situation in the context of digital innovation,

but the challenge is not coming from a single country

companies unable to adopt the new model will inevitably disappear

Cheap labor cost Development tools are free or very cheap

Replication of existing productive systems and use of existing distribution platforms

Digital platforms already exist

Market already developed Digital customers rapidly growing

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good news

companies willing to adopt Digital Disruption

have less constraints to change

than the companies competing againstChinese manufacturing had

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digital readiness assessment

how do large companies get ready to manage digital disruption?

June 2012 study by Forrester Research

285 global executives invited to participate

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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

How much do you agree the following statementsapply to your company?

Level of agreement (5 points scale, top 2 boxes)

enthusiastic but disenchanted

A) People in our company are excited about the changes that digital will bring to our company

B) people in our company have the skills needed to adapt to the changes that digital will bring to our company

C) Our company has policies and business practices that will enable us to adapt to the changes that digital will bring to our company

D) Our company will put the right resources (people, budget, time) in place to adapt to the changes that digital will bring to our company

Base: 285 global executives invited to participateSOURCE: Forrester Research – Digital Readiness Assessment, June 2012

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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

How much do you agree the following statementsapply to your company?

Level of agreement (5 points scale, top 2 boxes)

>1000 empl.

<1000 empl.

large companies doing worse

A) People in our company are excited about the changes that digital will bring to our company

B) people in our company have the skills needed to adapt to the changes that digital will bring to our company

C) Our company has policies and business practices that will enable us to adapt to the changes that digital will bring to our company

D) Our company will put the right resources (people, budget, time) in place to adapt to the changes that digital will bring to our company

Base: 285 global executives invited to participateSOURCE: Forrester Research – Digital Readiness Assessment, June 2012

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The Challenge

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how does a digital innovator think?

digital innovators grew up in a time when the possibilities of digital are way more than the limitations

of the analogic

a Digital Innovatorsees

Possibilities rather than Hurdles

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the challenge

if we don't start thinking like thatwithin our companies

SOMEONE ELSE WILL DO IT OUTSIDE

making us quickly irrelevant

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how do we do it?

Support thedevelopment of a digital innovation

culture

Put digitalinnovation behaviorsin place

Innovatefrom withinstarting now

Culture Process

Infrastructure

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cultureAnalogic Innovation

Scarcity Model

“How can we create a new productand sell it successfully?”

Create – which are our capabilities to build a product that we know how to make?

Product – which is the market for a product that I know already how to make?

Sell – how can we position in the market to acquire customers that we already know who they are?

Digital InnovationAbundance Model

“How can we offer customerswhat they need/desire?”

Create Give – the focus is on what we could give to our customers instead of what we can build.

Product Customers – the focus is on customers needs rather than on the product itself.

Sell Need – the focus is on satisfying customer's needs, not only with a product but with a total experience, rather than just pushing the product to the customer.

keywords

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“Wait, I've Heard thisCustomer Centric Hype

for Ages!”

What's New?

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Visual History of the Relationship

between Company and Customer

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● Build it and they'll buy it● Create needs, change customers

behavior● Hey, customers do have a brain!

And they talk to each other!

early 20th century“Build it and they'll buy it”

focus: Product

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● Build it and they'll buy it● Create needs, change customers

behavior● Hey, customers do have a brain!

And they talk to each other!

early 20th century“Build it and they'll buy it”

focus: Product

e dit:

“Happy Customer”

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late 20th century“Create needs,change behaviors”

focus: Customer Consumer

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late 20th century“Create needs,change behaviors”

focus: Customer Consumer

“Happy Customer”

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early 21st century“Hey! they have a brain!

And they talk to each other!”focus: Customer Person

e dit:

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customers talk to each otherthanks to the Digital Revolution

how do we treat them now?

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“More marketing, on the new digital channels!”

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Billboards

Loyalty cards

Cinema ads

Customer service

Radio spots

Yellow pages

Printed ads

Brochure

Banners

CRM programs

YouTube pre-rolls

Social support

Spotify ads

Google AdWords

Facebook promoted content

Blogging

Newsletter

thanks to Nicolas Moerman for sharing this in “Screw Experts” on slideshare.net/NicolasMoerman/

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Billboards

Loyalty cards

Cinema ads

Customer service

Radio spots

Yellow pages

Printed ads

Brochure

Banners

CRM programs

YouTube pre-rolls

Social support

Spotify ads

Google AdWords

Facebook promoted content

Blogging

Newsletter

thanks to Nicolas Moerman for sharing this in “Screw Experts” on slideshare.net/NicolasMoerman/

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aren't we just using new media in an old way?

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e dit:

Disclaimer: not implying that we should shoot customers!But sure we did hit (figuratively) sheep and dogs in the past...

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PUSH!PUSH!PUSH!

PUSH!PUSH!

PUSH! PUSH!

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does “push” still work nowadays?

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“Come dear, take your medicine!”

“Oh mum, it's so good! May I have some more?”

e dit:

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how can we engage with customers for real?

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PUSH!PUSH!PUSH!

PUSH!PUSH!

PUSH! PUSH!

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listen

PUSH!PUSH!PUSH!

PUSH!PUSH!

PUSH! PUSH!

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listen

participate

PUSH!PUSH!PUSH!

PUSH!PUSH!

PUSH! PUSH!

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listen

participatecollaborate

PUSH!PUSH!PUSH!

PUSH!PUSH!

PUSH! PUSH!

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can it be the matter of some specialist team?

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...or is it becoming a company-wide affair?

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...or is it becoming a company-wide affair?

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“Ce n'est pas une révolte,c'est une révolution.”

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Personal Revolutions

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Digitally-Driven

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Digitally-Driven

in Business

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digitally-driven personal revolutions

Productivity

1984 - Personal Computer

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Productivity

1984 - Personal Computer

“why should our employees use personal computers?computing is managed by our IT department!”

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computing is not a specialist's matter any more, it has beencommoditised and is embedded in almost all life aspects ph

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Connectivity

1995 - Internet and E-mail

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Connectivity

1995 - Internet and E-mail

“why should our employees have individual emails?they can communicate by telephone and ordinary mail!”

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“Russia's agency responsible for the Kremlin security is buying typewriters, a movereportedly prompted by recent leaks by WikiLeaks and Edward Snowden” - bbc.co.uk*

e dit:

* just Google “snowden typewriter”

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Portability

2008 - Smartphones

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Portability

2008 - Smartphones

“why should our employees need portable computing?we provide them with the best hardware!”

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further development is coming with BYOD policies,bring your own device, enabled by SaaS

e dit:

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this is where you are focusing right now

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and you're right, there's still so much to do!

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BUT...

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what will happen next?

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Relationship

NOW - Social Networking

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Relationship

NOW - Social Networking

“why should our employees use social networks for work?our marketing team is already taking care of it!”

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let's talk about it

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let's talk about it

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customers and social● 94% Digital Natives say they do not use emails on

a regular basis, they prefer Facebook and other social networks to communicate

● generation X represents the largest increase in Facebook and other social networks use

● the fastest growing segments in Facebook are in the Baby Boomers generation

SOURCE: The Facebook Era by Clara Shih

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social networks ascommunication platform

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social networks ascommunication platform

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widespread adoptionacross age groups

2009 2010 20110%

1% 1% 2%

11% 10% 10%

14% 13% 13%

16%16% 16%

11% 13% 14%

10% 11%12%

6% 7%8%2%

3%3% 65+

0-1112-17

SOURCE: eMarketer, Feb 2011 and World Bank data

Use of Social Networks is spreading across Age Groups (US data)po

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what do our customers doon social media?

● Talk about us and our competition● Research our products and the competitors'● Get their peers' feedback on products● Create a solution before getting to us

CustomerDue Diligence Begins

Customer FirstEngagement with Sales

Purchase

source: CEB, Customer Purchase research Study, 2011 n=1,399

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"People have been complaining about companies forever, but before they did it at the water cooler or at the bar, now they are doing it on-line and

spreading their complaints to disparate communities."

Bernhard Warner, co-founder of London-based consultancy Social Media Influence.

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remember the Abundance Model

“How can we offer customers

what they need/desire?”

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a way to escape commoditization

offer customers value that goes beyond the product

– transparency– responsiveness– collaboration

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social is where customers are

(also in B2B, customers are made of people)

Q. Can social be a way to offeradditional value to customers

through our employees?

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social in the hands of employees?

● keeping control of corporate image

● assuring compliance

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● loosing touch with customers

● loosing opportunitiesfor business

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● loosing control of corporate image

● loosing control on compliance

● establishing personal relationship w. cust.

● surfacing opportunitiesfor business

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● loosing control of corporate image

● loosing control on compliance

● establishing personal relationship w. cust.

● surfacing opportunitiesfor business

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what's the cost of inaction? ( )i.e. the two Digital Challenges

1. the digital world is challenging not only because customers are on social networks...

● they talk among them (about us), and● they will end up talking to our competitors

2. also because it's a powerful source of innovation...● someone else will do it!

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and the advantage of action? ( )potential of social technologies to improve productivity at different pointsin the value chain in major sectors of the economy

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what does that mean for sales?● sales effectiveness - customer facing

– establish credibility– prospecting and first call– knowing the customer inside– dealing with complaints at the root– maintaining a relationship– after sales servicing

● sales effectiveness - indirect– collaborating with sales team– social proof from existing customers

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Social media helps reps make direct connections with pro-spects to refine forecasted pipeline

internal collaborative social tools benefit team-based selling

Regular, active use of posts, tweets, forums by reps con-tributing to online conversa-tions, to impact eventual buy-ing decisions

Our sales team actively “l-istens” to external social con-tent pertaining to customers, accounts and target markets

30%29%

26% 26%

11% 11%

Best Practice for Mature Social Sellers

SOURCE: Aberdeen Group, 2012; base n=182

best-in-classindustry averagelaggards

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what would we needto enable social?

enabling employees to be on social...

assuring compliance and other corporate constraints

is there any solution to this puzzle?

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Digital Revolutionis Happening Around Us

we can make it happen...or will it happen to us?

or, to say it with Randy Pausch (The Last Lecture, 9/18/2007)

We cannot change the cards we are dealt,just how we play the hand.

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Questions?

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Thank you!

@lionzan

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Leonardo Zangrando

Business Innovation - Social Selling – Startup Coach

social@lionzan.me+39 349 4627 186

@lionzan

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