Leading Digital Innovation
Module
Session 2
Course Journey
Session 1
Digital Transformation & The
Business Impact
Session 2
Digital Disruption as External
Threats & Opportunities
Session 3
Assessment of Internal
Digital Capabilities
Session 4
Develop Effective Digital
Strategy
Session 5
Develop Effective Digital
Business Models
Session 6
Leadership & Organization of
the Digital Transformation
Session 7
New Technologies Fueling Digital
Transformation Execution Session 8
Final Project
Session 2: Digital Disruption -
External Threats & Opportunities
Session Agenda
Review & Q/A 1 4 Key Factors in Creating
Disruption
Digital Disruption 2 Today’s 5
Two Differentials of Business
Model
Session
Incumbents Challenges 3 6 Tools to Gauge Disruption
Threats
Session 1 Review
• Digital Transformation
• Digitization
• Digitalization
• Digital Trends & Drivers
• Digital Mastery
Digital Mastery Level
Fashionistas Digital Masters
• Many Silos advanced digital features • Strong Overarching digital vision
• No overarching vision • Excellent digital governance across silos
• Undeveloped coordination • Many digital initiatives generating
• Digital culture may exist in silos business value in measurable ways
Digital Capabilities
• Strong digital culture
• Immature digital culture • Principal digital vision but undeveloped
• Management Skeptical of the business • Few advanced digital features, however
value of advanced digital technologies traditional digital capabilities are mature
• Maybe carrying out some experiments • Strong digital governance across silos
• Active steps to build digital skills and
culture
Beginners Conservatives
Leadership Capabilities
Quantifying Digital Mastery Advantage
+6% +9% -11% +26%
Revenue
generation Profitability
efficiency
-4% -10% -24% +9%
Basket of indicators: Basket of indicators:
• Revenue/Employee • EBIT margin
• Fixed-assets turnover • Net profit margin
What is Disruption in Business?
Source: The Digital Transformation Playbook, David Rogers
What is Disruption in Business?
Business disruption happens
when an existing industry
faces a challenger that offers
far greater value to the
customer in a way that
existing firms – incumbents –
cannot compete with directly.
Source: The Digital Transformation Playbook, David Rogers
Challenges Faced by Incumbents
Fight against Technology & Data Digital Human Talent
Commoditization Obsolescence Retention
Legacy Approaches / Organization Silos / Prioritization
Culture Structure (Innovator’s Dilemma)
Source: Building The Agile Business Through Digital Transformation, Neil Perkin and Peter Abraham
Two Differentials of
Business Model Disruption
Source: What’s Your Digital Business Model, Peter Weil and Stephanie Woerner
What is a “Business Model”?
Source: The Digital Transformation Playbook, David Rogers
What is a “Business Model”?
A holistic view of how a business
creates value, delivers it to the
market, and captures value in
return.
Source: The Digital Transformation Playbook, David Rogers
Business Model Canvas
Source: [Link]
Two Differentials of
Business Model Disruption
A difference in Value Proposition that
dramatically displaces the value provided by
the incumbent (at least for some customers)
A difference in Value Network that creates a
barrier to imitation by the incumbent
Source: The Digital Transformation Playbook, David Rogers
1. Value Proposition Differential
Price Lower with higher value
Key Generators
Freemium Stimulate customer trial
Aggregation Many sellers
Simplicity Remove friction
Personalization Customized offerings
source: The Digital Transformation Playbook, David Rogers
2. Value Network Differential
Customers Different segments than incumbent
Key Components
Channels Retail or online distribution
Partners Sales, manufacturing,
supply chain or others
Networks Customers, advertisers, app
developers, logistics partners
Skills & Ex: iPhone design
Processes Zappos customer service
Complementary Additional value created by
Products / Services the new offer
source: The Digital Transformation Playbook, David Rogers
Digital Disruptors:
Name local digital disruptors and their
disruptive business model
Group Discussion
Three variations of Digital Disruptions
New Entrants New Business Models for Cross Industry
Traditional Competitors Boundaries
Source: What’s Your Digital Business Model, Peter Weil and Stephanie Woerner
Business Disruption vs. Competition
Google’s self-driving car Digital cameras vs. Kodak:
vs. Auto industry:
Disruptor with New
Competitor to autos
Customer Value
Disruptor to drivers
Craigslist vs. Newspaper Airbnb vs. Hotels
classified ads?
Disruptive Ecosystem of
Disruptor using Sellers & Buyers
Innovation (Internet)
Source: The Digital Transformation Playbook, David Rogers
Conclusion
What did you learn?
What did you like?
How will the new information affect your
current role?
Ask me Anything!
Thank you
