“Digital transformation is not about technology – it’s about change.” – Dr Stephanie Woerner
Digital economy is profoundly changing our businesses and our societies, and you can no longer merely tweak your management practices to lead you to success. Many leaders recognize the threat and opportunity of digital but lack a common approach to think about their digital business model.
We have the fortune and pleasure to meet, work with and interview Dr. Stephanie Woerner, Research Scientist at MIT Center for Information Systems Research (CISR) and Executive Educator at MIT Sloan. Dr. Woerner is one of the world’s leading experts in Digital Enterprise strategy and transformation, working with hundreds of organizations over the last five years, following and guiding their efforts in how to transform their enterprises from board level to executive teams including CEO, CxOs including CDO, CIO and CHRO.
Dr. Woerner has together with Professor Peter Weill, performed enterprise research and distilled their findings into a very insightful bestselling book called What’s your Digital Business Model? In the research, they found that digitization moves companies’ business models on two dimensions: from value chains to digital ecosystems, and from a broader understanding of the customer’s needs too much more explicit, detailed and data-driven insight about their customer’s.
See the interview with Dr. Stephanie Woerner below or listen to this episode 016 from our podcast Exploring Leaders where we dive into the six driving questions that are needed for leaders to clarify where they are in an increasingly digital business landscape as well as what is needed to move toward a higher-value digital business model.
What is the digital threat and opportunity, and what is best for the future?
Listen to Stephanie sharing how the best companies are not trying to be best at technology but applying technology on their most important business problems as understanding their customers better or becoming more networked. She also shares that the framework including the six questions are helping leaders figuring out where they need to go and how to get there. It is harder to get leaders to talk about the opportunities than the threats, but they can articulate how much of their revenue is under threat for the next five years, a whopping 28% in average and for large companies 46%!
How much or your company’s revenue is under threat for the next five years? And what are you doing about it?
What is your digital competitive advantage? Do you have the crucial capabilities including leadership to reinvent the business?
Hear Stephanie share how you identify which of your capabilities are relevant and competitive for the future, by exploring the three sources of competitive advantage; Content, Customer experience or Platform and share examples.
And based on the key competitive advantages, what is the basic Digital Business Model including examples of Supplier, Modular producer, Omni channel or Ecosystem driver, and what is your target digital business model and what does it take to move there?
What is your key source of competitive advantage? What is your target digital business Model and how do you get there?
What is the Boards role and how do they need to drive change?
In one of our research projects together with KTH led by Professor Mats Magnusson and Vinnova, we have been exploring how boards contribute to corporate renewal and innovation and we have identified three major driving forces. We asked Stephanie how she has seen boards that are digitally savvy act on these;
- capture information from different and diverse sources
- be more involved in strategy and innovation, to balance their time from less defense and oversight, to more strategy
- take decision for agility and long-term value creation
Also listen to Stephanie’s interesting research still to be published beginning of 2019 on digitally savvy boards. They found out that only about 24% of US boards are digitally savvy, but 62% of boards they think they are.
And how they cross researched this with financial performance, and by that found out that boards across industries, that have three or more digitally savvy board members, those companies have substantially better revenue growth and market share than the rest of the companies.
How many digitally savvy board members do you have on your board? How is your board acting on the three driving forces insight, strategy & innovation and aligned decision making?
Role models and why do they dare to change?
We asked Dr. Woerner for recommendations on role models as leaders and board members in the digital era, and as she had been fortunate to meet many she shared some examples, including her perspective on why they dare to change.
Dr. Woerner pointed to
- The Group Executive Chairman Francisco González and the French global bank BBVA
- The Chairman and CEO Jean-Pascal Tricoire and the CDO/CIO Hervé Coureil and the global Energy Management and Automation company Schneider Electric
- The CEO and Director Piyush Gupta and the leading financial services group in Asia DBS
- The CEO Fernando González and the Mexican global building materials company CEMEX
We share more insights related to the mentioned digital role model leaders under section “More insights on Digital Business Models” below.
If you are not yet, how can you become a digital leadership role model? If you are a role model digital leader, can you become more visible or coach some leaders not yet there?
Exclusive Board & Leadership Events
In November, we were fortunate to welcome Stephanie Woerner to Stockholm and an exclusive board event with a group of Nordic chairmen and board members representing more than 100 organisations, and the following day a leadership event with CEOs and executive leaders from many industries.
The Board event was hosted by the research projects OSIRIS & SISU Boards led by Professor Mats Magnusson, KTH, research initiative 4Boards.ai led by Professor Robin Teigland, all together with Digoshen, and had focus on Boards role in innovation strategy and governing new digital business models.
We listened to Stephanie Woerner, who shared that as board members we are more accomplished at defense and oversight compared to strategy;
The presentations was followed by roundtable discussions and exchanges, as well as research input on topics like
- Board and leadership team’s capability to reinvent the enterprise for the digital era and sustainability.
- If the organisations action plans sufficiently address the digital threats and opportunities for the next three years. The insights showed that we still have significant plans to put in action.
- And if the board has clarity in where to apply AI to create value, where we are still just emerging to understand where to apply AI and how to govern it for value creation.
The participants were highly engaged and we collectively agreed there was continues room for insights and improvement in the area.
Our second presenter, Dr. Peter Crow, concurred on the need of increased digital savviness on boards, but also outlined that boards need to work more efficiently and with closer proximity between board and executive management. Dr Crow outlined four critical questions that boards need to ask
- Are we doing the right things? (explores context, purpose and strategy)
- Is strategy being actioned as expected? (explores implementation)
- Are expected benefits being achieved? (verifies performance by way of outcomes, not just effort)
- Are we making good decisions? (tests efficacy of board’s decision-making)
Dr. Peter Crow has nicely summarized the full event in this blog post .
We are delighted that both Stephanie Woerner and Peter Crow are members of our Reference Groups for our research projects SISU Boards and 4Boards.ai.
It was concluded that “Companies face the same challenge with their clients as HR does for employees. Clients and employees today expect an integrated and compelling experience across countries, products, processes and interactions. The benefits are huge if you succeed. The punishment is very harsh if you fail.”
During this event, the leaders assessed their CxOs and the event is summarized in this Blogpost by Zalaris Sven Hultin
Does your leadership team or board have some great best practices for the new digital world that you can confidentially share with us for our research? Does your board or leadership team need to adjust better to the new digital era
Insights from the book “What’s your Digital Business Model “
The book “What’s Your Digital Business Model?” is highly recommended for progressive leaders wanting to make a difference in their companies. It is a concise and practical book that provides a framework including motivating examples and explores the six driving questions for leaders to answer to become successful. It furthermore includes self-assessments and financial assessments on where profits are made.
The six driving questions with required areas of action and assessment can be found below, and much more detailed assessments and examples can be found in the book.
More insights on #Digital #Business #Models & #Leadership
To get more insight into what Dr. Stephanie Woerner knows and shares we recommend you increase learning in the topic of Digital Business Models. You can follow Stephanie Woerner at Twitter @SL_Woerner and MIT CISR @MIT_CISR and MIT Sloan Management Review at @mitsmr .
About Digital Business Models
- An article about the framework with LexisNexis as an example by MIT CISR.
- Learn more about Business Models from my former colleague the insightful Irving Wladavsky-Berger Its all about the business model – not the technology.
- The Tech innovation isn’t the answer everyone thinks it is by INSEAD
- More details by MIT CISR on the Digital Business Models and the related six questions
- MIT CISR research on Designing and Executing Digital Strategies
- Designing organizations in the age of algorithms by INSEAD
- Some leading examples of new digital business models as Tencent, Alibaba, BYD, Discovery, TCS by BCG.
- A research report on different business models at different companies and business controllers roles in implementing them by ICV-Controlling.
- How Data Driven companies have become the most valuable by BCG
- Report from 2018 Platform Strategy Summit by MIT Digital
About Leading new Digital Business Models
- New framework for boards to guide innovation and corporate renewal (Digoshen & KTH)
- Learning more from our other speaker Peter Crow and his participation at Drucker Forum (Video) on Business at Human Scale Managing Like you have skin in the game.
- The race between Man and Machine: Implications of Technology for Growth, Factor Shares and Employment By MIT Digital
- A leadership agenda for the new digital business models by BCG.
- Why the C-Suite Needs Digital Leadership by HRExecutive
- How the board can make the most of blockchain by INSEAD
- What can Machines learn and what does it mean for occupations and the economy by MIT Digital
- Agile Starts and stops at the top by BCG
- Understanding the real keys to effective KPIs by MIT Digital
- MIT Forum Examines Future Workers, Shared Prosperity
About Role Models in leading Digital Business Models
The Group Executive Chairman Francisco González and the French global bank BBVA
- Is your Company a digital leader or laggard – BBVA.
- The years ahead with BBVA CEO Francisco Gonzales
- BBVA Case study shows the way in data science
- The Next Step, Exponential Life (downloadable book), about exponential technologies sponsored by BBVA Francisco González
The Chairman and CEO Jean-Pascal Tricoire and the CDO/CIO Hervé Coureil and the global Energy Management and Automation company Schneider Electric
- Redesigning Schneider Electrics Operating Model (from Product to Solution) MIT CISR
- Schneider Electric – Connectivity inspires a digital transformation
- Innovation Summit World Tour incl Chair/Coe Tricoire (video)
- Scanning the Periphery for Digital Disruption incl CDO Hervé Coureil
- Beyond Technology with CDO Hervé Coureil
- Follow on twitter @jptricoire
The CEO and Director Piyush Gupta and the leading financial services group in Asia DBS
- DBS act less like a bank and more like a tech company with CEO Piyush Gupta
- The five qualities of a good leader in a Changing world – a LinkedIn article by DBS CEO Piyush Gupta
- Big Data as a new asset class by DBS CEO Piyush Gupta (video)
The CEO Fernando González and the Mexican global building materials company CEMEX
- CEMEX’s Fernando González on Digital Business Models in Latin America (video)
- CEMEC 2017 Integrated report titled Leading our industry’s DIGITAL transformation
- Follow on twitter @Fernandogzz
About Podcasts about Digital Disruption
Learn from other leaders interviewed by Digoshen
You can find inspiration from some of the earlier blog posts and podcasts episodes (Exploring Leaders)
With board members
and leaders of disruptive transformation
At Digoshen we are experienced leaders, board members, advisors and investors ourselves and we support leaders moving into the digital age. We believe that Companies, Boards and Business Leadership Teams need to understand more of the digital world to fully leverage the potential when bringing their business into the digital era. We share insights from inspiring #digital1st thought leaders via our podcast Exploring Leaders and our blog. If you are one of them or know someone we should talk to, please send us a hint via http://digoshen.com/contact/ or via Twitter @digoshen . These interviews are shared both on my own blog www.liselotteengstam.com as well as on the blog of Digoshen www.digoshen.com, where I am Chairman of the Board. To understand where you and your company stand in relation to digital business and leadership progress, take our survey at Digoshen.com/research and get a free of charge personalized report with recommendations on how to move forward. The survey is anonymous and takes about 15 minutes to complete. We are proud to provide inspiration and support to help transition business leaders into more insightful digital positions for themselves and their companies. Follow us on twitter: @digoshen , our CEO @katycaroan and Chairman @liseeng