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David Rogers - Create Your Digital Transformation Playbook
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David Rogers - Create Your Digital Transformation Playbook

Introduction

David Rogers is a globally recognized leader in digital business strategy who's consulted with hundreds of companies from 64 different countries. He is the keynote speaker for this conference and will be discussing how an effective digital strategy requires transformation that is much more fundamental and comprehensive than any kind of technological makeover we might have imagined.

About David Rogers

This section provides information about David Rogers, his background, and his expertise.

Background

  • David Rogers is a globally recognized leader in digital business strategy.
  • He has consulted with hundreds of companies from 64 different countries.
  • He is the author of four books including "The Digital Transformation Playbook" and "Rethink Your Business for the Digital Age."

Expertise

  • David teaches at Columbia Business School where he is the faculty director of programs on digital marketing and digital business strategy.
  • His latest academic research has explored Big Data, the Internet of Things, and in-store mobile shoppers.

Keynote Speech by David Rogers

In this section, David delivers his keynote speech to the audience.

Keynote Speech Highlights

  • An effective digital strategy requires transformation that is much more fundamental and comprehensive than any kind of technological makeover we might have imagined.
  • The credit union industry faces challenges related to digital transformation such as understanding customer/member needs, embracing change, and overcoming barriers.
  • Companies across industries are facing common challenges related to developing strategies for the digital era.

Research on Credit Union Industry

This section discusses research conducted by David Rogers on the credit union industry's approach to digital transformation.

Research Findings

  • The research aimed to understand how credit unions have embraced or faced up to the challenge of digital transformation.
  • The study identified common challenges faced by credit unions related to digital transformation, such as understanding customer/member needs and overcoming barriers.
  • The research provides insights for leadership on how to achieve their goals related to digital transformation.

What is Digital Transformation?

In this section, the speaker defines digital transformation and explains how it differs from creating a startup. He also emphasizes that digital transformation is not about technology but rather changing the way organizations think.

Definition of Digital Transformation

  • Digital transformation is about how businesses need to evolve and adapt in order to continue growing in the digital economy.
  • It involves taking an existing business that was started before the internet and figuring out how to transform it for profitable growth in today's rapidly changing technological landscape.

Challenges of Digital Transformation

  • Transforming an existing business is different from creating a startup because it involves changing an organization's history, structure, and way of thinking.
  • Companies that have been around for decades have certain advantages such as resources and customers, but they may also be hindered by their prior experience and ways of operating.

Importance of Changing Organizational Thinking

  • The key to digital transformation is changing the way organizations think. This can be challenging because companies learn from experience just like people do.
  • Organizations that were built under a pre-digital environment may have assumptions and constraints baked into their organizational design that need to be recognized and changed in order to succeed in today's environment.

Shifting Thinking for Digital Transformation

In this section, the speaker discusses how businesses need to shift their thinking in five domains of strategy for digital transformation. These domains include customers, data, innovation, value proposition, and competition.

Customers

  • Businesses need to think differently about customers in the digital era.
  • Marketing should be built around treating customers as dynamic networks instead of passive targets.
  • Customers are connected in many different ways today and businesses need to fit into those connections.

Data

  • The strategic importance of data has changed in the digital era.
  • Businesses need to learn to think differently about the role that data plays in a business.

Innovation

  • Businesses need to manage risks associated with innovation differently in the digital era.
  • Innovation is always about doing something new that hasn't been done before.

Value Proposition

  • A business's value proposition needs to be moving and evolving over time.
  • It is important for businesses to understand their value proposition and adapt it over time.

Competition

  • Businesses need to think differently about their competition and how they compete.
  • Understanding the dynamics of competition is crucial for success in the digital era.

Domino's Pizza and Digital Transformation

This section discusses how Domino's Pizza has transformed its customer experience through digital technology.

The Value Proposition of Domino's Pizza

  • Domino's value proposition was to offer a free pizza if the order was not delivered on time.
  • The company focused on delivery experience and immediacy, which led them to become a pizza delivery company rather than just a pizza company.

Digital Transformation at Domino's Pizza

  • Domino's has been focusing on bringing their customer experience to life by leveraging digital technology.
  • They have been exploring various technologies that could help transform the customer experience, such as their app, Twitter, Amazon Alexa, and even emojis.
  • By focusing on the customer experience and transforming it with technology, they have seen tremendous growth in recent years.

Changing Customer Expectations in Retail Banking and Credit

This section discusses how changing customer expectations are affecting the retail banking and credit industry.

Shift in Customer Expectations

  • Customers' expectations have shifted from accessibility (ATMs) to mobile apps that allow them to do everything remotely.
  • Companies need to understand the different touchpoints accessible to customers (phone, screen, kiosk, retail space), be relevant and helpful at each step of the journey.

Rethinking Competition in the Digital Era

This section discusses how competition is changing in the digital era.

Traditional Competition vs. Digital Competition

  • Traditional competition was about competing with companies that looked like you based on products/services offered. It was a zero-sum game where one had to lose for another to win.
  • In contrast, digital competition is about competing with companies that offer similar customer experiences, regardless of the products/services offered.
  • Companies need to focus on creating a unique and seamless customer experience to stay competitive in the digital era.

Toyota's Competitive Threats

In this section, the speaker discusses Toyota's traditional competitors and potential asymmetric competitors in the market.

Traditional Competitors

  • Toyota's traditional competitors include GM and Japanese car manufacturers.
  • Tesla is also considered a traditional competitor due to its innovative approach to car manufacturing.
  • Uber and Google are potential competitive threats that are not literal car manufacturers.

Asymmetric Competitors

  • Asymmetric competitors have a different value proposition than Toyota but can still substitute or get the job done.
  • Ride-sharing services like Uber have already impacted purchase decisions around second cars for families.
  • Google's self-driving automation could potentially make them an Android for cars or even a Windows PC operating system equivalent, leading to a shift in customer preferences.

Competition Dynamics

  • It is helpful to think about competition in terms of symmetric and asymmetric competitors.
  • Managing relationships with asymmetric competitors requires a different approach than managing relationships with symmetric competitors.

Hilton Hotels' Competitive Landscape

In this section, the speaker discusses Hilton Hotels' traditional and asymmetric competitors in the hospitality industry.

Traditional Competitors

  • Hilton Hotels' traditional competitors include other large hotel chains with similar business models, such as Marriott and Hyatt.

Asymmetric Competitors

  • There are several types of asymmetric competitors in the hospitality industry:
  • Online travel agencies like Expedia and Booking.com
  • Home-sharing platforms like Airbnb
  • Co-living spaces like WeLive

Competition Dynamics

  • The rise of asymmetric competitors has disrupted the hospitality industry and forced traditional hotel chains to adapt.
  • Managing relationships with asymmetric competitors requires a different approach than managing relationships with symmetric competitors.

The Story of Airbnb

In this section, the speaker talks about how Airbnb started as a solution to a problem faced by its founders and how it grew into a successful business.

How Airbnb Started

  • The founders of Airbnb were recent college graduates who couldn't pay rent in San Francisco.
  • They got an idea to host people for a design conference that was happening in town since all hotels were sold out.
  • They bought air mattresses since they didn't have any spare beds and put out cheap digital advertising.
  • People took them up on their offer, stayed with them for the weekend, paid cash and left happy.

Airbnb's Business Model

  • After realizing they could make money hosting people, the founders decided to create a multi-sided platform that brings together hosts and travelers.
  • Their business model is simply to facilitate interaction between these two kinds of customers.
  • It took some time to build trust and make the whole process seamless but once they got it right, the company grew exponentially around the world.
  • Despite having no hotels, Airbnb is now the most valuable hospitality business in the world with over $30 billion valuation.

Platform Businesses

In this section, the speaker talks about platform businesses as one possible business model that's succeeding today.

Platform Businesses

  • Platform businesses are only one possible business model that's succeeding today.
  • Eight of the 10 biggest companies started since 1994 have a platform business model at their core or as one of their key sources of profitability.

The Importance of Data

In this section, the speaker talks about data and its importance in achieving digital transformation.

The Role of Data

  • Data is the third domain of strategy that we need to learn to think differently about in order to achieve digital transformation.
  • Companies need to use data effectively to make better decisions, improve customer experience and create new business models.
  • However, companies also need to be aware of the ethical implications of using data and ensure they are not violating people's privacy.

The Value of Data in the Digital Era

In this section, the speaker discusses how data has transitioned from being used operationally to becoming a strategic asset in the digital era.

Data Silos

  • Data was previously kept in silos based on its operational use.
  • Member data, marketing data, and HR data were all kept separately.
  • This made it difficult to tie everything together.

Strategic Asset

  • Bringing various data sets together can turn data into a strategic asset.
  • Third-party data sets can also be incorporated.
  • This allows for more value to be added for customers/members and innovation/growth opportunities.

Caesars' Customer Loyalty Program

In this section, the speaker discusses how Caesars' customer loyalty program has evolved with technology advancements.

Loyalty Program Evolution

  • Caesars has always focused on customer loyalty as their main value driver.
  • Previously, they would gather customer data through their loyalty program and send out rewards via mail after analyzing it manually.
  • With technology advancements, they can now analyze customer behavior in real-time and use it to shape their experience.

Real-Time Analysis

  • Caesars can now analyze customer behavior down to minutes and seconds during their stay.
  • This allows them to influence and design the customer's experience as it's happening.
  • For example, if a loyal customer is losing money at a table game, Caesars can send an alert to staff on the floor to intervene without rigging the game.

Customer Experience and Innovation in the Digital Era

In this section, the speaker discusses how companies can improve customer experience by using data to shape it. He also talks about the traditional model of innovation and a new model that is emerging.

Shaping Customer Experience

  • Companies can use data to shape customer experience by doing something unexpected for their customers.
  • This approach is not part of an inner plan or using points, but rather a special way of reaching out to customers.
  • By measuring the results, companies can see what works and what doesn't work.

Managing Innovation

  • Innovation is inherently risky because there are unknowns when doing something new.
  • The traditional model of managing innovation involves top-down planning and making big strategic bets made by smart people with impressive titles.
  • A new model of innovation has emerged from Silicon Valley where small scrappy companies innovate in a digital world where they can put out products, change them, and relaunch them practically for free every day of the week.
  • This new method is based on constant experimentation and placing lots of small bets iteratively without trying to figure out what the customer will do in advance.

Case Study: JCPenney

  • JCPenney faced pressure due to various factors such as e-commerce and trends in retail shopping.
  • The board decided they needed an innovation leader to refresh their business.
  • They hired Ron Johnson who was a rockstar in retail having done amazing work at Target and invented/launched Apple Store.
  • Ron came up with big ideas such as changing product assortment, layout/design, pricing etc.
  • However, his approach failed because he did not experiment iteratively but instead made big bets without testing them first.

The Failure of JCPenney's Innovation Strategy

In this section, the speaker discusses the failure of JCPenney's innovative strategy under Ron Johnson.

Ron Johnson's High-Risk Approach to Innovation

  • JCPenney changed its logo and store layout in an attempt to innovate.
  • The new approach generated buzz and media attention.
  • However, the strategy failed, resulting in the worst quarterly performance of any major retail company in history.
  • Ron Johnson was let go as a result.

A Different Approach to Innovation

  • Emerging companies are taking a different approach to innovation in the digital era.
  • Intuit is an example of a company that has successfully transitioned from traditional product development processes to a new approach.
  • For its first 25 years, Intuit followed a traditional product development process that resulted in costly failures and successful products.
  • After 25 years, Intuit decided to take a different approach by looking at startups in Silicon Valley for inspiration.

Intuit's Innovative Process

In this section, the speaker discusses how Intuit transitioned from traditional product development processes to an innovative process inspired by startups.

Imitation as an Innovative Process

  • Intuit's emerging markets team wanted to get into India and discovered that farmers were their target customers.
  • They spent time with farmers to understand their lives and challenges.
  • They identified limited options and lack of transparency as key issues for Indian farmers selling their produce.
  • They focused on innovation questions rather than building products. Their goal was to raise Indian farmers' income by 10% through financial products.

Generating Hypotheses for Financial Products

  • Intuit's team generated several hypotheses for financial products that could help Indian farmers.
  • They considered building a platform similar to eBay, but it was not feasible.
  • Instead, they created a simple prototype and showed it to farmers and buyers.
  • The buyers rejected the prototype, leading the team to consider other options.

Creating a Supply-Side Crop Information Portal

In this section, the speaker talks about how they created a supply-side crop information portal for farmers to share information.

Using SMS and Recommendation Engine

  • The team came up with an idea to use SMS and a recommendation engine to help farmers buy and sell their crops.
  • They had concerns about whether anyone would pay attention to the suggestions or if the farmers could even read them since most of them were illiterate.
  • However, after testing it out, they found that both farmers and buyers used the service as directed.

Rapid Experimentation

  • The team shifted their innovation cycle by using rapid experimentation. They put something in front of customers early on to get feedback iteratively.
  • This approach allowed them to learn quickly and cheaply from their mistakes without investing too much time or resources into ideas that turned out to be off-base.

Adapting to the Digital Era

In this section, the speaker discusses how companies need to adapt and evolve in the digital era by focusing on customer needs and opportunities.

Value Propositions

  • Value propositions are no longer defined by industry but by customers.
  • Companies need to be ready to adapt and evolve in response to changing market needs and opportunities.

Metropolitan Museum of Art

  • The Metropolitan Museum of Art has been focusing on adapting to the digital era.
  • They have a team dedicated to using technology to connect with customers and engage them with art.
  • The museum has created an app that is easy to use and intuitive for visitors.
  • They have also used blogging and short-form videos to tell stories about their artwork, making it more accessible for people all over the world.
  • The museum has created gaming experiences like "Murder at the Met" that engage teenagers with art in a fun way.
  • The museum has accumulated data on every piece of artwork they own from all over the world, which they are now opening up for outsiders.

Regina Flores' Hip-Hop Project

  • Regina Flores created a mobile app called "The Hip-Hop Project" that uses key words from popular songs by artists like Missy Elliott, Jay-Z, and Kanye West to create a visual collage of human history linked to themes in the song.
  • This project was made possible through access to the Metropolitan Museum of Art's database of artwork.

Fighting for Relevance

  • According to Sri Srinivasan, former Chief Digital Officer at the Metropolitan Museum of Art, businesses today are fighting for relevance in people's lives rather than just competing against other businesses.

Applying the Five Domains to Your Business

In this section, the speaker emphasizes the importance of applying the five domains to your business and talks about how failing to transform can lead to disruption. He provides examples of companies like Kodak and Blockbuster that failed to innovate and change with the times.

Importance of Transformation

  • Failing to learn how to transform can lead to disruption.
  • Companies like Kodak and Blockbuster had opportunities for innovation but failed to take advantage of them.
  • Digital transformation is not just about technology, it's also about strategy, leadership, and new ways of thinking.

Examples of Successful Transformation

  • Encyclopedia Britannica transformed its business model by focusing on its core customers' needs in a digital era.
  • They developed a digital encyclopedia with lesson plans and teaching tools for schools.
  • The company is now profitable as ever before.

Innovating Without Losing Positive Customer Connection

In this section, the speaker addresses concerns about innovating without losing positive customer connections. He explains that having emotionally connected customers is actually an asset because they are more involved in setting agendas and identifying problems that need solving.

Building on Emotional Connections

  • Having emotionally connected customers is an asset.
  • Involve members in setting agendas and identifying problems that need solving.

Balancing Data Collection and Customer Privacy

In this section, David discusses the importance of balancing data collection with customer privacy. He talks about how companies should be careful not to invade their customers' privacy by collecting too much information.

Finding the Right Balance

  • Companies need to find a balance between having enough information and invading their customers' privacy.
  • Smart companies in different industries may know a lot about their customers, but they won't reveal everything they know.
  • A research study called "What is the Future of Data Sharing" found that financial services is one of the industries where people are more willing to share data.
  • Brand trust is an important factor in determining whether customers are comfortable sharing data with a company.
  • Value exchange is another important factor. Companies should show their customers that they will receive better service if they share their data.

Providing Better Service

  • Companies should not just ask for customer data without providing value in return.
  • Amazon is an example of a company that uses customer data to provide better service, such as recommending products based on past purchases.

Overall, David emphasizes the importance of finding a balance between collecting customer data and respecting their privacy. He suggests that companies can do this by building brand trust, providing value in exchange for data, and using customer data to improve service.