3. If the rate of change on the
outside (of an organization)
exceeds the rate of change on
the inside, the end is near....
-Jack Welch
4. Digital is the main reason
just over half the Fortune 500 companies
have disappeared since the year 2000.
-Pierre Nanterme, CEO Accenture, 2016
Yet..Digital disruption
has only just begun.
5. Digital penetration has only just begun
http://www.mckinsey.com/business-functions/digital-mckinsey/our-insights/the-case-for-digital-reinvention#0
6. Digitalization pressures revenue and profit growth
http://www.mckinsey.com/business-functions/digital-mckinsey/our-insights/the-case-for-digital-reinvention#0
7. All our knowledge is about the past, but all
our strategic decisions are about the future.
What we don’t know
we don’t know
Outside our
comprehension
What we
know
What we know
we don’t know
Conway 2003
10. “We always overestimate the change
that will occur in the next two years
and underestimate the change that will
occur in the next ten.”
- Bill Gates, The Road Ahead, 1996
12. H.I.S. Co. has two Hen’na Hotels run
entirely by robots and plans to open 100 hotels.
Food deliveries
Check-in
Automated Tasks
Concierge
Porters
Cleaning
Lawnmowing
Room Service
Robot Trashcan
Robot Fish
16. Technology replacing Energy and Banking
http://www.visualcapitalist.com/chart-largest-companies-market-cap-15-years/
17. The New Multinationals
CGE Platform Database with Quid visualization, 2015
Over $3 trillion in firm market cap
Selected platform companies Emerging platform
clusters
2016 Parker & Van Alstyne, with Choudary – licensed under Creative
Commons Attribution-ShareAlike 4.0 International (CC BY-SA 4.0).
19. FIRM FOUNDED EMPLOYEES MKT CAP
BMW 1916 122,000 $56B
UBER 2009 7,000 $62B
MARRIOTT 1927 200,000 $32B
AIRBNB 2008 5,000 $21B
WALT DISNEY 1923 185,000 $172B
FACEBOOK 2004 15,000 $369B
WALMART 1962 2,300,000 $206B
ALIBABA 1999 36,000 $241B
Adapted from Parker & Van Alstyne, with Choudary, 2016, and updated January 2017
Something fundamental is changing
20. The commodification of banking
In 2000, the U.S. cash equities trading desk at
Goldman Sachs’s New York headquarters
employed 600 traders, buying and selling
stock for large clients.
Today there are just 2 traders left.
http://www.nanalyze.com/2017/02/artificial-intelligence-investment-banking/
26. “We want to help
small businesses
grow by solving
their problems.”
- Founder & CEO Jack Ma
Expanding industry boundaries
“to build the future infrastructure of commerce”
29. TRUST: The prerequisite for scale and scope
Third parties attached
to platform
− Fraud
− Operational
− Health, safety
Payment systems
− Functionality
− Fraud
Privacy of data
− Cybersecurity
− Ethical usage of
personal data
Trust in
Digital
Environments
30. The threat of the “Winner-take-all” Platforms
http://www.the-digital-insurer.com/dia/zhong-an-chinas-first-complete-online-insurance-company/
https://www.ft.com/content/e76198d2-1b26-11e5-8201-cbdb03d71480
Moving into banking
and insurance
31. Betting on “The winner takes all”
Immelt’s goal: “A top 10 software company” by 2020
• Predix: USD 1 bln investment
• Open-source model, e.g., Android
• 19,000 developers + 3rd party developers
• Software building blocks (e.g., blockchain)
33. Omnichannel Business
-”Life events”
-Own customer relationship
-Multiproduct, multichannel
-Integrated value chain
e.g., ING, Schindler
Supplier
-Products/services
-Sell through another
-Low-cost producer
-Incremental innovation
e.g., Sony
Ecosystem Driver
-One stop destination
-Branded platform
-Great customer experience
-3rd party plug’n plays
-Matchmaker
e.g., Amazon, John Deere
Modular Producer
-Ecosystem plug’n play
-Niche plug’n play
-Adapt to ecosystems
-Continuous innovation
e.g., Paypal
MIT study: Four incumbent digital business models
Weill & Woerner 2015
Needs
Life Events
Demographics
Purchase history
Control over decisions on brand, price, quality, etc.
* 32% Higher growth
* 27% Higher profit margin
34. Many new data platforms emerging yet the winner
will be the one that turns insight into customer
productivity and efficiency
35. B2B digital leaders:
5Xs more revenue growth than their peers
B2B
B2B2C
Leadership
• Commit to digital at strategic level
• Create culture anchored on innovation and
execution
• Shake up organizational structure and metrics
to support digital aspirations
Digital operational excellence
• Create consistent online and offline
experiences
• Enable and empower sales force through
data
• Improve insight and decision making through
end-to-end connection of processeshttp://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/how-b2b-digital-leaders-drive-five-times-more-revenue-growth-than-
38. https://bitcoin.org/bitcoin.pdf
“…an electronic payment system based on
cryptographic proof instead of trust, allowing any
two willing parties to transact directly with each other
without the need for a trusted third party.”
45. Community platform
Hierarchicalfirm
VS
E.g., Ford
~ Created by employees within
organizational boundaries
E.g., Local Motors
~ Created by community collaborators
regardless of affiliation
Teigland, Di Gangi, & Yetis 2012
The Flipped Firm: New model of value creation?
46. “Local Motors is the place for people to create
influential vehicles together.”
• 100xs lower capital cost
• 5xs faster production
48. Olli - 3D printed autonomous vehicle
with IBM Watson
https://www.3dprintingbusiness.directory/news/local-motors-prepares-serial-production-ollie-3d-printed-smart-vehicles/
From 25-30,000 parts to 50 parts
49. Local and mobile factories
Integrating offline and online communities
Arizona
Maryland
Tennessee
Germany
50. No one owns everything,
Everyone owns something,
all resources reside in networks.
Adapted from Lévy 1997Image: Krebs
Access,
not
ownership
52. Decline in routine jobs, even after recovery
H. Siu (Univ of BC) & N. Jaimovich (Duke Univ), 2015
In 2000, the U.S. cash equities trading desk at
Goldman Sachs’s New York headquarters employed
600 traders, buying and selling stock for large
clients.
Today there are just 2 traders left.
53. All jobs have been created within non-routine
Food service
Housekeeper
Programmers
Data scientist
Admin Assistant
Manufacturing
54. Jobs that did not exist in 2006
App developer
Social media manager
Uber driver
Driverless car engineer
Cloud computing specialist
Big data analyst/data scientist
Sustainability manager
YouTube content creators
Drone operators
Millennial generational expert
https://www.weforum.org/agenda/2016/06/10-jobs-that-didn-t-exist-10-years-ago/
66. “Flash organization” created with Foundry
staffing Upwork freelancers
Valentine et al., 2017, http://hci.stanford.edu/publications/2017/flashorgs/flash-orgs-chi-2017.pdf
69. Smart cities and microgrids
Brooklyn Microgrid aims to create a local, neighborhood-
powered grid that could operate in parallel to the main grid.
One of the appeals of a microgrid is its potential to provide
electricity to homes even if the main grid goes down. -NPR
71. • Automation
• Globalization
• Rising
productivity of
select few
-Ryan Avent
Increasing social responsibility
An increasing
abundance of
labor
72. If replace 1000
workers with
one more robot
Data from 1990 to 2007 in the USA
1) Employment to
population
ratio down by
0.18-0.34 PPt
2) Wages down
by 0.25-0.50%
D. Acemoglu (MIT) & P. Restrepo (Boston Univ), Robots and Jobs: Evidence from US
Labor Markets 2017, Natl Bureau of Economic Research Working Paper.
82. Facilitating innovation at a makerspace at
Georgia Institute of Technology
https://smartech.gatech.edu/bitstream/handle/1853/53813/a_review_of_university_maker_spaces.pdf
84. “We always overestimate the change that
will occur in the next two years and
underestimate the change that will occur
in the next ten.”
- Bill Gates, The Road Ahead, 1996
Scenario
Thinking
90. ”No one knows everything,
everyone knows something,
all knowledge resides in humanity.”networks
Adapted from Lévy 1997
Boundary
spanner
• Better career
• Higher salary
• Adapt more quickly to change
91. Six degrees of separation
- Milgram, 1967
Image: http://www.deliveringhappiness.com/on-six-degrees-of-separation/