Digital Innovation and Transformation · 2020. 11. 12. · Drive to support a competitive, multiplatform economy (Google vs. Apple vs. Microsoft, Amazon vs. Walmart …) (drive interoperability,

What it takes to Lead through Digital Transformation

November 2020

PRESENTED BY

Feng ZhuPiramal Associate Professor of Business AdministrationHarvard Business School

Thomas GötzGroup Vice President and Global Head of Technology Strategy & Transformation, Digital Consulting & ServicesAtos

© 2020 Harvard Business School Publishing.

All rights reserved. Harvard Business Publishing is an

affiliate of Harvard Business School.

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During Today’s Session




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Inspire your leaders.Activate your organization.

Address today’s challenges and prepare for tomorrow’s

Deliver broad impact at speed and scale

Build future-ready leaders




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Introduction


Thomas GötzGroup Vice President and Global Head of

Technology Strategy & Transformation,Digital Consulting & Services

Atos

Copyright © President & Fellows of Harvard College

Digital Innovation and Transformation

Feng ZhuPiramal Associate Professor of Business Administration

More than half of the world’s most valuable public companies grew by shaping their digital ecosystems

June 2010

Rank Company NameMarket Cap (US$ Billion)

1 Exxon Mobile 2922 PetroChina 2693 Apple 2294 ICBC 2115 Microsoft 2026 China Mobile 2017 Berkshire Hathaway 1978 China Construction Bank 1899 Walmart 178

10 Proctor & Gamble 173

June 2020

Company NameMarket Cap (US$ Billion)

Saudi Arabian Oil 1753Apple 1395Microsoft 1386Amazon 1233Alphabet 978Facebook 661Alibaba 554Tencent 529Berkshire Hathaway ） 447Johnson & Johnson 338

Driving Digital Transformation

• Create an online version of the offline business

• Use new technologies to cut cost

• Collect lots of data and conduct lots of analytics

• Run lots of experiments

• Develop a “digital first” mindset

• Rethink about value creation and capture

• Rethink about competition

Develop a “Digital First” Mindset

Stock Return (January 1, 2010 – June 30, 2020)Alphabet, Apple, Amazon, and Domino’s

Domino’s(4309%)

Amazon(1951%)

Apple(1112%)

Alphabet(357%)

Product Innovation

“Domino’s crust tastes like cardboardand their sauce tastes like ketchup.”

“Domino’s tastes like it came out of a microwave, not an oven.”

Tap Consumer Creativity

Started a Facebook page where fans can submit suggestions in two categories: • Idea Box (e.g., new menu items,

tips for going green, etc.) • Current Project (for specific

things Domino’s needs help with, e.g., “New Domino’s Uniforms”).

Domino’s store managers and employees contributed many ideas.

Source: BI Intelligence

• Texting an emoji• Samsung TV• Amazon Echo• Apple Watch• Twitter• Facebook Messenger

Chatbot• …

“We’ve always said that it doesn’t make sense to have a 2-ton machine delivering a 2-kilogram order.”

- Domino’s Group CEO Don Meij

A tech company that just happens to make pizza

— Former Domino’s CEO J. Patrick Doyle (2010 - 2018)

Properties of Digital TechConnectivity & Data

Near-zero marginal cost

Domino’s Transformation• Omni-channel strategies• Leverage customers for innovation• Transparency

• Cost reduction• Drive economies of scale

Error-free reproduction • Standardization• Rapid diffusion of new innovations




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On Atos’s Dual Digital Transformation

Thomas GoetzGroup Vice President and Global Head of


Atos

Source: “From Globalization to Dual Digital Transformation: CEO Thierry Breton Leading Atos Into ‘Digital Shockwaves” (A)”

“Redesigning Atos’ own internal processes and competencies through digital technology while simultaneously guiding customers through the same changes.”

Rethink about Value Creation and Capture

What should Best Buy do?

1. Price match Amazon’s prices

2. Offer add-on services such as repair

3. Exit the offline business

4. …

Best Buy Net Income (Millions)

($1,500)

($1,000)

($500)

$0

$500

$1,000

$1,500

$2,000

2012 2013 2014 2015 2016 2017 2018 2019

Another Example

Reimage the nature of firms, transforming both business and operating models

Value Creation Value Capture and Sharing

Operating Model

DifferentiationEfficiencyScaleNetwork effects…

PriceLicenseSubscriptionAdvertisingOutcomes-based…

ProductPlatformEcosystemCrowd…

Business Model

Structure Processes Assets

Sales/CRMServiceMfg.Product devSupply chainHR…

PeopleDataIPTech/APIsFinancial…

Alignment




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Journey 2020



Atos

Rethink about Competition

Scope expansion of digital firms

Alibaba’s Ant Financial Services Group

Taobao/TMall

> 10 million sellers

> 450 million buyers

Ant Financial

Payment (Alipay)Credit Scoring (Zhima Credit)Online Bank (MYBank)Money Market Fund (Yu’e Bao)

and other services

The Digital Domino Effect

Ant F

ortu

ne

Myb

ank

Ant C

redi

t Pay

Insu

ranc

e

????

????

????

The same installed bases, data, analytics and software capabilities can lead to advantages across multiple markets.

Blurring industry boundariesHealthcare

Education

RetailBanking

Energy

http://www.google.com/imgres?imgurl=http://bases.stanford.edu/images/facebook-logo.jpg&imgrefurl=http://bases.stanford.edu/&h=301&w=800&sz=79&tbnid=zJxMgbsojbq3jM:&tbnh=54&tbnw=143&prev=/images?q=facebook+logo&hl=en&usg=__WeFH-VXntUhyURYyVtK_ZEtRoIk=&ei=j3rZS4TOAYT78AaOl8RG&sa=X&oi=image_result&resnum=1&ct=image&ved=0CAYQ9QEwAAhttp://www.microsoft.com/

How do you fight back?autos, telco service providers, retail, media, financial services, … Understand and actively anticipate the transformation of your industrial

environment

Drive innovation and operating model transformation to create a foundation for change and deepen/sustain your differentiation

Focus on your own digital business model innovation (leverage new digital opportunities for new revenue)

Drive to support a competitive, multiplatform economy (Google vs. Apple vs. Microsoft, Amazon vs. Walmart …) (drive interoperability, multi-homing, data sharing, privacy, …)

Actively pursue new opportunities:

Provide new products or services to existing customers

Serve those who are not my customers at the moment

Understand regulatory options

Act NOW!




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How is Atos thinking differently?

Resolving Digital Dilemmas• Digital transformations and solutions often result in unanticipated

complications and uncertainties ("human factor")• "Digital-by-Default" and "Wait and See" not options• Understand the potential response to digital possibilities and how

they are influenced by humans and society - foster intellectual fun and insights that come from arts and humanities, as well as from the science of nature, to better understands aspects of fairness and truth, willingness and ability to change, logic and emotion bound cultures

• Effective digital business models balance the tension between "could-we" and "should-we" propositions - strategic and tactical choices have to be made also by YOU

• Digital dilemmas are no "no win" challenges - they provide opportunity by finding guardrails, mitigations, and resolutions.

"should-have" capability



Atos

Digital transformation is driving emphases on:

• Developing a “digital first” mindset

• Creating value and capturing value differently

• Managing competition with new competitors

… ultimately transforming business models,

organizations, cultures and ecosystems




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Implications for leaders

Digital IntelligenceDigital Agility & Eminence

Transformational Leadership

"must-have" capabilities

"should-have" capability Thomas GoetzGroup Vice President and Global Head of


Atos




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Questions


Thomas GötzGroup Vice President and Global Head of


Atos

harvardbusiness.org

@HBPCorpLearning

Harvard Business Publishing Corporate Learning

Thank you!

What it takes to �Lead through �Digital Transformation Slide Number 2Slide Number 3Slide Number 4Digital Innovation and TransformationMore than half of the world’s most valuable public companies grew by shaping their digital ecosystemsDriving Digital TransformationSlide Number 8Slide Number 9Stock Return (January 1, 2010 – June 30, 2020)�Alphabet, Apple, Amazon, and Domino’sSlide Number 11Product InnovationTap Consumer CreativitySlide Number 14Slide Number 15Slide Number 16Slide Number 17Slide Number 18A tech company that just happens to make pizzaSlide Number 20On Atos’s Dual Digital TransformationSlide Number 22Slide Number 23What should Best Buy do?Slide Number 25Best Buy Net Income (Millions)�Another ExampleReimage the nature of firms, transforming both �business and operating modelsJourney 2020Slide Number 30Scope expansion of digital firmsAlibaba’s Ant Financial Services GroupThe Digital Domino EffectBlurring industry boundariesSlide Number 35How do you fight back?�autos, telco service providers, retail, media, financial services, …How is Atos thinking differently?Digital transformation is driving emphases on:Implications for leadersSlide Number 40�Thank you!

Documents

Digital Innovation and Transformation · 2020. 11. 12. · Drive to support a competitive, multiplatform economy (Google vs. Apple vs. Microsoft, Amazon vs. Walmart …) (drive interoperability,