Digital Disciplines E-Book

Joe Weinman

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Serie: Wiley CIO
• Sprache: Englisch

Seitenzahl: 696

Veröffentlichungsjahr: 2015

Beschreibung

Leverage digital technologies to achieve competitive advantage through market-leading processes, products and services, customer relationships, and innovation

How does Information Technology enable competitive advantage? Digital Disciplines details four strategies that exploit today's digital technologies to create unparalleled customer value. Using non-technical language, this book describes the blueprints that any company, large or small, can use to gain or retain market leadership, based on insights derived from examining modern digital giants such as Amazon, Netflix, and Uber, established firms such as Burberry, GE, Nike, and Procter & Gamble, and lesser-known innovators such as Alvio, Fruition Sciences, Opower, and Quirky.

Companies can develop a competitive edge through four digital disciplines—information excellence, solution leadership, collective intimacy, and accelerated innovation—that exploit cloud computing, big data and analytics, mobile and wireline networks, social media, and the Internet of Things. These four disciplines extend and update the value disciplines of operational excellence, product leadership, and customer intimacy originally defined by Michael Treacy and Fred Wiersema in their bestselling business classic The Discipline of Market Leaders.

• Operational excellence must now be complemented by information excellence—leveraging automation, information, analytics, and sophisticated algorithms to make processes faster, better, and more cost-effective, seamlessly fuse digital and physical worlds, and generate new revenue through techniques such as exhaust data monetization
• Product leadership must be extended to solution leadership—smart digital products and services ranging from wind turbines and wearables to connected healthcare, linked to each other, cloud services, social networks, and partner ecosystems, focused on customer outcomes and creating experiences and transformations
• Customer intimacy is evolving to collective intimacy—as face-to-face relationships not only go online, but are collectively analyzed to provide individually targeted recommendations and personalized services ranging from books and movies to patient-specific therapies
• Traditional innovation is no longer enough—accelerated innovation goes beyond open innovation to exploit crowdsourcing, idea markets, innovation networks, challenges, and contest economics to dramatically improve processes, products, and relationships

This book provides a strategy framework, empirical data, case studies, deep insights, and pragmatic steps for any enterprise to follow and attain market leadership in today's digital era.  It addresses improved execution through techniques such as gamification, and pitfalls to beware, including cybersecurity, privacy, and unintended consequences.

Digital Disciplines can be exploited by existing firms or start-ups to disrupt established ways of doing business through innovative, digitally enabled value propositions to win in competitive markets in today's digital era.

Leseprobe

Table of Contents

Title Page

Copyright

Dedication

Foreword

Preface

Acknowledgments

Part One: Overview and Background

Chapter 1: Digital Disciplines, Strategic Supremacy

From Value Disciplines to Digital Disciplines

Information Excellence

Solution Leadership

Collective Intimacy

Accelerated Innovation

Exponential Value Creation

The Leadership Agenda

Information Technology in Context

Notes

Chapter 2: Value Disciplines and Related Frameworks

Value Disciplines

Operational Excellence

Product Leadership

Customer Intimacy

Importance of Focus

The Unbundled Corporation

Business Model Generation

Michael Porter and Competitive Advantage

Blue Ocean Strategy

Innovation: The “Fourth” Value Discipline

Notes

Chapter 3: Digital Disciplines

Information Excellence

Solution Leadership

Collective Intimacy

Accelerated Innovation

All of the Above?

Notes

Chapter 4: Digital Technologies

The Cloud

Big Data

Mobile

The Internet of Things

Social

Notes

Part Two: Information Excellence

Chapter 5: Operations and Information

Processes

Process Advantage

Process Optimization

Asset Optimization

Business Value of Information

The Role of Information Technology

Caveats

Notes

Chapter 6: The Discipline of Information Excellence

From People to Machines

From Physical to Virtual

From Virtual to Digical

From Processes to Experiences

From Operations to Improvement

From Static Design to Dynamic Optimization

From Mass Production to Mass Personalization

From Cost Reduction to Revenue Generation

From Direct to Indirect Monetization

From Touchpoints to Integration

From Firms to Networks

From Data to Actionable Insight

From Answers to Exploration

Notes

Chapter 7: Burberry—Weaving IT into the Fabric of the Company

Operational Excellence and Product Leadership

From Operational Excellence to Information Excellence

From Physical to Virtual

From Virtual to Digical

From Processes to Experiences

From Mass Production to Mass Personalization

From Cost Reduction to Revenue Generation

From Touchpoints to Integration

From Firms to Networks

Notes

Part Three: Solution Leadership

Chapter 8: Products, Services, and Solutions

Competitive Strategy

Product Elements

The Experience Economy

Pricing and Business Models

Notes

Chapter 9: The Discipline of Solution Leadership

From Products and Services to Solutions

From Generic and Expected to Augmented and Potential

From Transactions to Relationships

From Sales Results to Customer Outcomes

From Standard Products to Custom Solutions

From Products and Services to Experiences and Transformations

From Standalone to Social

From Product to Platform

From Engineered to Ecosystem

Notes

Chapter 10: Nike—A Track Record of Success

From Products to Solutions

From Generic and Expected to Augmented and Potential

From Transactions to Relationships

From Sales Results to Customer Outcomes

From Standard Products to Custom Solutions

From Products to Experiences and Transformations

From Standalone to Social

From Engineered to Ecosystem

Nike and the Other Digital Disciplines

Notes

Part Four: Collective Intimacy

Chapter 11: Customer Experience and Relationships

Customer Intimacy

A Broad Spectrum of Relationships

Dimensions of Interaction

Collaborative and Content Filtering

Notes

Chapter 12: The Discipline of Collective Intimacy

From Transactions to Relationships

From Relationships to Intimacy

From Physical to Virtual

From Virtual to Digical

From Company to Community

From People to Algorithms

From Individual to Collective

Notes

Chapter 13: Netflix—Entertaining Disruption

Information Excellence

Accelerated Innovation

Solution Leadership

From Relationships to Intimacy

From Physical to Virtual

From Virtual to Digical

From Company to Community

From People to Algorithms

From Individual to Collective

Notes

Part Five: Accelerated Innovation

Chapter 14: Innovation and Transformation

Successful Commercial Innovation

The Innovation Process

Innovation Principles

Innovation of Products, Processes, Relationships, and Innovation

Business Model Innovation and Corporate Transformation

Notes

Chapter 15: The Discipline of Accelerated Innovation

From Solitary to Collaborative

From Internal to External

From Closed to Open

From Inside-Out to Outside-In

From Products to Platforms

From Linear to Agile

From Employees to Crowds

From Salaries to Prizes

From Theoretical to Data-Driven

From Human to Machine

From Incremental to Transformational

Notes

Chapter 16: Procter & Gamble Cleans Up

From Solitary to Collaborative

From Internal to External

From Closed to Open

From Inside-Out to Outside-In

From Employees to Crowds

From Incremental to Transformational

Notes

Part Six: Successful Execution

Chapter 17: General Electric—Flying High

Digital Disciplines at GE

Software at GE

Information Excellence

Solution Leadership

Collective Intimacy

Accelerated Innovation

Notes

Chapter 18: Human Behavior and Gamification

Human Behavior

Gamification

Gamifying Information Excellence

Gamifying Solution Leadership

Gamifying Collective Intimacy

Gamifying Accelerated Innovation

Gamification across Disciplines

Notes

Chapter 19: Opower—The Power of the Human Mind

Human Behavior and Energy Consumption

Opower, Information, and Intimacy

Notes

Chapter 20: Digital Disasters

Strategic Errors

Cyberattacks

Software Design and Development Challenges

Operational Issues

Unintended Consequences

Erratic Algorithms

Politics and Pushback

Digital Disappointments

Notes

Part Seven: What's Next?

Chapter 21: Looking Forward

The Exponential Economy

Future Technologies

Opportunities

Critical Success Factors

Next Steps

Notes

About the Author

Index

End User License Agreement

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Guide

Cover

Table of Contents

Foreword

Preface

Part One: Overview and Background

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DIGITAL DISCIPLINES

ATTAINING MARKET LEADERSHIP VIA THE CLOUD, BIG DATA, SOCIAL, MOBILE, AND THE INTERNET OF THINGS

Joe Weinman

Copyright © 2015 by Joe Weinman. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, [phone], fax [phone], or on the Web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, [phone], fax [phone], or online at http://www.wiley.com/go/permissions.

Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

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Library of Congress Cataloging-in-Publication Data

Weinman, Joe, 1958-

Digital disciplines: attaining market leadership via the cloud, big data, social, mobile, and the internet of things / Joe Weinman.

pages cm. – (Wiley CIO series)

Includes index.

ISBN 978-1-118-99539-6 (hardback) –ISBN 978-1-119-03988-4 (ePDF) – ISBN 978-1-119-03987-7 (ePub) 1. Internet marketing. 2. Leadership. 3. Customer services. I. Title.

HF5415.1265W4525 2015

658.8′72–dc23

2015018222

COVER DESIGN: WILEY

COVER IMAGE: ©ISTOCK.COM/PETAR CHERNAEV

“Dedicated to Mom and Dad”

Foreword

Marketplace success is much sought after, but hard to achieve. In most industries, only a handful of firms manage to outperform the majority of their contenders. Their shining results make them stand out—in terms of customer appeal, financial results, or growth prospects. Yet even they are subject to decline in a turbulent world where customer power and buyers' demands are mounting relentlessly.

Attaining market leadership is no sinecure. This was already evident some 20 years ago in the research that led to my coauthored book The Discipline of Market Leaders, a #1 bestseller that was published in 18 languages. The fundamental and lasting truth exemplified by the market-leading companies featured in that work, as well as the many outperformers I have studied since, is that they succeeded by not being all things to all people. Instead, they developed and honed the discipline to deliver unsurpassed value to particular customer segments on just those dimensions most pertinent to these customers—such as best total cost, best solutions, or best products. On top of that, they recognized the imperative to provide better value year after year in order to sustain their appeal to ravenous and switch-prone customers—whether through faster, cheaper, and better offerings, special treatment, or otherwise.

Then as well as now, customers want more—and they want to be delighted and surprised. Today nothing has more power to surprise than the digital juggernaut that is transforming marketplaces around the world.

In my research 20 years ago, the Internet barely registered as a crucial component of market leadership. The word internetworking appeared just once in my book, and the term digital did not come up at all. How things have changed. Today, technology is a pervasive strategic force in any market-leading company that I know, and is getting recognized as such in a rapidly growing number of other firms. In light of that, it is no surprise that as of April 2015, the world's highest-ranking companies by stock market capitalization were Apple and Google, with Microsoft, Facebook, Oracle, and Amazon not far behind, and that most of the fastest-growing enterprises can be found in the digital field.

Considering the rampant growth and importance of digital capabilities, Joe Weinman's Digital Disciplines could not be more timely. The immense merit of his work lies in illuminating how the dizzying array of current and emerging digital technologies are shaping and transforming the ways that companies create better customer value and, hence, attain market leadership. His insights and case studies provide a blueprint for companies of all sizes in all industries to upgrade their strategies so as to compete effectively in the digital era. The connection of his four digital disciplines with the enduring disciplines of market leaders that were outlined in my earlier book is uncanny. To me, Digital Disciplines shows how technology is super-charging the way customer value gets created. Weinman, in effect, is putting my original disciplines on steroids.

Digital Disciplines provides rich and interesting detail as to technology's potential and impact on customer strategy. Even with a pretty good grasp of the subject matter, I found the book eye-opening, especially in terms of the multitude of possibilities it covers that are worth exploring, and the dangers that could befall those who do not fully appreciate the necessities of the digital era.

Fred WiersemaCustomer Strategist, Chair of the B2B Leadership Board,Institute for the Study of Business Markets at Penn State, andcoauthor of the top-selling The Discipline of Market Leaders

Preface

In 1993, two management consultants named Michael Treacy and Fred Wiersema wrote a popular Harvard Business Review article titled “Customer Intimacy and Other Value Disciplines.” They further detailed their insights in the best-selling The Discipline of Market Leaders. Based on a multiyear study of dozens of companies, they argued that to be successful, firms needed to create unique value for customers through operational excellence, product leadership, or customer intimacy.

Operational excellence focuses on developing differentiated processes, for example, those that offer lower prices or greater convenience. For example, Dell had rethought the PC business, replacing store-based channels that pushed standard make-to-stock configurations with a direct-to-consumer model for assemble-to-order products, increasing convenience while lowering price-points.

Product leadership involves leading-edge products and services. Treacy and Wiersema highlighted Johnson & Johnson's Vistakon unit, which rapidly acquired the rights to and scaled up production of an innovative disposable contact lens technology branded Acuvue.

Customer intimacy entails better relationships, driven by a deep understanding of customer problems and a willingness to solve them, enabled by flexible processes, systems, people, and culture. Treacy and Wiersema pointed out that Home Depot clerks are happy to spend whatever time a customer needs to solve a home repair problem; the same for IBM sales teams.

The insights of the value disciplines approach are as true today as they were then, but the implementation details have changed—significantly. Treacy and Wiersema were well aware of the opportunities inherent in information technology, highlighting, for example, how General Electric used a system called “Direct Connect” to enable independent dealers to utilize a stockless distribution model and sell from virtual inventory, simultaneously giving GE better visibility into customer orders, dealers higher profits, and customers better service.

However, the IT of that era largely involved enterprise systems. The web was in its infancy and mobile data was nonexistent. Now we live in an era where even three-year-olds play with smartphones and tablets more powerful than the mightiest supercomputers of those bygone times. Today, the Internet permeates our lives, with massive bandwidth increases enabling new services, such as home movie streaming and mobile social networking. Sensors can detect heartbeats and tremors, GPS can track vehicles, the cloud can apply sophisticated algorithms against enormous sets of not just numerical data, but videos, speech, and images.

This book attempts to answer a simple question: How should the Treacy and Wiersema value disciplines framework be updated for this new world of cloud computing, big data and analytics, social networks, broadband wireless and wireline connections, and smart, connected things ranging from thermostats to jet planes? In other words, how do digital technologies impact value disciplines to become digital disciplines?

Simply put: Everything stays the same, yet everything changes.

Better processes can still drive a competitive edge, but mere (physical) operational excellence is no longer sufficient. It must be enabled, complemented, and extended through information excellence, including real-time dynamic optimization algorithms and the seamless fusion of physical and virtual worlds.

Better products and services are still desirable, but it is no longer sufficient to improve a standalone product. Today, products are not just digital and smart but connect to back-end cloud services, and from there onward to social networks and infinitely extensible ecosystems. The same goes for the physical embodiment of services—for example, healthcare services increasingly involve pills, pacemakers, and equipment connected to patient data repositories, diagnostic systems, and hospital asset management systems.

Better customer relationships are no longer just about caring, empathetic customer service employees or dedicated account teams willing to spend time on the golf course to get to know the customer. They are also about better meeting each individual customer's needs, by deriving subtle insights based on big data from all customers collectively. Examples include upsell /cross-sell in retail, more targeted recommendations in entertainment, and personalized medicine.

Finally, in today's hypercompetitive world, innovation is a critical imperative: delivering higher-quality results, faster, and more cost-effectively. Innovation encompasses not just products and services but also processes and relationships, and can benefit from new cloud-enabled constructs such as idea markets and challenges, which extend the innovation team beyond the company to the entire world.

After researching dozens of firms, the successful ones all seem to have exploited one or more of these themes; the fallen ones have largely failed to do so. Amazon.com versus Borders, Netflix versus Blockbuster, Wikipedia versus Encyclopedia Brittanica, WhatsApp versus telco-based texting, and dozens of other cautionary tales offer object lessons in harnessing information technology to disrupt and reimagine industries and outmaneuver competitors, or be overtaken by those who can.

This book offers what I hope will be valuable insights to boards and senior executives such as CEOs, CIOs, CDOs, CFOs, and CMOs (chief executive, information, innovation, digital, financial, and marketing officers), middle management, and line personnel in and outside of information technology. It is a book squarely at the intersection of business and technology, yet largely nontechnical. In a world where virtually all consumers are digital natives or digital immigrants, IT is no longer the province of the glass-house datacenter but an important weapon that virtually any enterprise—in business or government—must wield to be successful.

An implicit theme of the book is that winners win, not just due to random luck, but due to repeatable, structured principles. These principles align with and complement each other. For example, a focus on customer outcomes requires a continuous relationship with the customer, one that is hard to achieve with a standalone product, but one that can be enabled through a connected solution.

The book is structured to be readable from cover to cover, yet each chapter is also self-contained. As a by-product, this necessitates a bit of repetition. The book provides an introduction to some key technologies for those who are more business oriented, and an introduction to some key business strategy concepts for those who are more technology oriented.

The first few chapters provide an overview of the key insights in the book, background on Treacy and Wiersema's value disciplines framework and related strategy models, a more detailed overview of the digital disciplines, and an overview of the five key technologies—cloud, data, social, networks, and things—which, together, are the enabling platform for this new wave of competitive strategies.

Following the introductory and overview matter, there are four main sections, one to address each of the four digital disciplines: information excellence, solution leadership, collective intimacy, and accelerated innovation. Each section has three chapters: an introduction or refresher on essential background ideas such as Porter's Five Forces model or the elements of innovation, the key themes and trends defining the discipline, and a specific case study. Case studies for Burberry, Nike, Netflix, Procter & Gamble, and General Electric provide real examples of how companies are applying the disciplines.

Because successful execution and customer adoption happen largely through people, two chapters focus on human behavior and gamification; one addresses general principles, the other provides a case study on Opower, a company that is heavily leveraging principles of human motivation in conjunction with information technology to simultaneously achieve customer, business, and societal objectives.

Finally, as with any initiative, there can be challenges and caveats in successful implementation. These range from strategic alignment and project management to concerns over privacy and security.

Technology marches forward. Twitter, Facebook, Instagram, WhatsApp, Snapchat, iPads, iPhones, and many of the other elements of the modern digital age didn't exist a few years ago, and change is speeding up, not slowing down. The last chapter addresses technologies on the horizon, and offers thoughts on how to apply the book's insights.

I have attempted to capture the intent of what Treacy and Wiersema eloquently and insightfully articulated, but it's hard to interpret one's own thoughts two decades later, much less someone else's. Any errors or misinterpretations are, of course, my fault.

It is a standing curse on books like these that companies that are held up as paragons can succumb to market turbulence, which has done nothing but increase, in no small part due to information technologies. In fact, during the time it took to write this book, the companies highlighted have adjusted strategies, divested brands, made acquisitions, discontinued products and initiatives, and faced new global competitors. However, the case studies represent a point-in-time snapshot of the issues, approaches, and successes of real companies facing turbulent markets, applying the strategies herein.

A number of books covering strategy and information technology oriented toward a leadership audience provide principles and detail themes such as empowerment and transparency. I'm sure these are well reasoned, but they don't seem to provide clear direction to leaders in industries facing increasing competition and the threat of digital disruption. It's my hope that the insights in the following pages can provide you with a framework with which to pursue a focused digital strategy and attain market leadership in your industry.

Joe WeinmanJune 2015

Acknowledgments

The most important acknowledgment is surely to Michael Treacy and Fred Wiersema, who created a clear yet powerful framework for attaining competitive advantage while driving customer value. Without their original and compelling insights, this book wouldn't exist.

The next major acknowledgment is to all of the global innovators at companies large and small, old and new, who, in leading their organizations, have created such a rich set of case studies from which I could elicit points to illustrate and expand my thesis. As detailed in the book, this includes CEOs and key executives such as Angela Ahrendts (now at Apple), Christopher Bailey, and John Douglas at Burberry, Jeffrey Immelt, Bill Ruh, and Darin DiTommaso at General Electric, Reed Hastings and Todd Yellin at Netflix, Mark Parker and Stefan Olander at Nike, A.G. Lafley at Procter & Gamble, and Dan Yates and Alex Kinnier at Opower, as well as the leaders and innovators at the dozens of companies mentioned in the book ranging from Amazon.com to Zappos.

I'd also like to acknowledge helpful fact checks and support for interviewing executives from the companies highlighted in the case study chapters. This includes support from Joris Evers at Netflix, Holly Gilthorpe and Jennifer Villarreal at GE, Carly Llewellyn, Margot Littlehale, and Melissa Roberts at Opower, and their counterparts at Burberry, Nike, and P&G. I'd also like to thank the peer reviewers who provided helpful feedback and sanity checks on clarity and content: Tim Horan, Dawn Leaf, Jonathan Murray, Steve Sims, and especially Marla Bradstock. Needless to say, I am responsible for any remaining errors or inaccuracies.

A project like this can't come to fruition without a publisher able to appreciate the potential of a concept and demonstrate great flexibility. I have been fortunate to work again with the editorial and production team at John Wiley & Sons, including Sheck Cho, Stacey Rivera, Maria Sunny Zacharias, and Brandon Dust.

Part OneOverview and Background

Chapter 1Digital Disciplines, Strategic Supremacy

On January 24, 1848, James W. Marshall, a carpenter from New Jersey, was helping to build a lumber mill on the American River near Sacramento when he noticed a twinkle in the water. It was the gold nugget that launched the Gold Rush, which, in turn, led to a population explosion and rapid statehood for California as fortune hunters and their suppliers—selling picks, shovels, food, libations, and more—descended on the territory from around the globe. The nonnative population of California grew from under 1,000 at the time of Marshall's discovery to over 100,000 by the end of the next year, thanks to the influx of Forty-Niners—mostly men who left their families behind to find riches. Even when the Gold Rush ended, much of the population remained, and so did a need for business associates, families, and friends to communicate with each other across the emerging nation.

To help meet this need, the Pony Express was launched on April 3, 1860. It could deliver letters and small packages between St. Joseph, Missouri, and Sacramento in only 10 days, a breakthrough for that era. The Pony Express accomplished this feat by using a cleverly engineered system of over 150 stations, hundreds of specially selected horses, lightweight riders, specially designed lightweight saddles, and clever “hacks” such as a horn to alert an upcoming station to ready the next horse. The stations were spaced about 10 miles apart, the distance a horse could go at top speed before tiring. In what was a forerunner to today's packet-switched networks such as the Internet, a lightweight pouch containing the mail was handed off from rider to rider, each rider exchanging horses several times before being replaced himself.