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Digital Transformation, Chapter 1

Nike has successfully transformed itself into a digital leader by focusing on innovation across all aspects of its business. It created a new digital unit called Nike Digital Sport to develop new digital products and customer engagement strategies. This unit helps other parts of Nike build their digital capabilities through an "innovation kitchen" and accelerator program. The document discusses how leading companies become "Digital Masters" by developing strong digital capabilities and leadership. Digital Masters view technology as a way to transform customer engagement, operations, and business models. They also exhibit committed leadership, strong top-down vision and governance, and ensure coordination across all levels. The levels of digital maturity are described from Beginners to Conservatives to Fashionistas to Digital Masters. Digital

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379 views28 pages

Digital Transformation, Chapter 1

Nike has successfully transformed itself into a digital leader by focusing on innovation across all aspects of its business. It created a new digital unit called Nike Digital Sport to develop new digital products and customer engagement strategies. This unit helps other parts of Nike build their digital capabilities through an "innovation kitchen" and accelerator program. The document discusses how leading companies become "Digital Masters" by developing strong digital capabilities and leadership. Digital Masters view technology as a way to transform customer engagement, operations, and business models. They also exhibit committed leadership, strong top-down vision and governance, and ensure coordination across all levels. The levels of digital maturity are described from Beginners to Conservatives to Fashionistas to Digital Masters. Digital

Uploaded by

Yokie Radnan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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DIGITAL

TRANSFORMATI CHAPTER 1

ON
DIGITAL MASTERY
BACKGROUND
Sporting goods company Nike has built its business on innovation. According to CEO Mark
Parker, “We’re an innovation company . . .Innovation and design is at the epicenter of all we do.
That innovation focus goes beyond Nike’s products to include the way it engages with customers
and even the way it manages internal operations.
Online customers can order personalized shoes in hundreds of color combinations. Digital tools
have made product design and digital capabilities have helped Nike to improve visibility and
performance in its operations, increasing efficiency, reducing waste, and enhancing corporate
social responsibility in the company’ global supply chain. Social media enable Nike to be an integral
part of the conversation around major sports, sporting events, and sporting apparel.
in 2010, Nike executives decided to invest in something different. They created a new business
unit, called Nike Digital Sport, to build new digital products and reimagine how Nike could engage
with customers across its categories. Marketers, designers, and engineers work together to
develop and launch products under the Nike+ banner. The unit also helps other parts of Nike
develop their digital efforts. Its “innovation kitchen” produces new designs and techniques ranging
from marketing to manufacturing. Its accelerator program is building the firm’s digital ecosystem.
DNA OF DIGITAL
MASTERS

Talked with executives in large companies—150 executives in fifty companies


around the world—to understand how these leaders were thinking about new
digital challenges, and what they were doing with new technologies. We found
that most of the companies were already investing in technologies such as social
media, mobility, analytics, and embedded devices. But some—the firms we call
Digital Masters—were making far better progress than others.

Digital Masters excel in two critical dimensions:


1. The what of technology (called digital capabilities)
2. The how of leading change (called leadership capabilities).
DIGITAL
CAPABILITIES

1. Digital Masters see technology as a way to change the way


they do business
a. Customer engagements
b. Internal Operations
c. Business Model

2. Digital Masters know where and how to invest in the digital


opportunity
DIGITAL
CAPABILITIES
To these companies, new technologies such
as social media, mobility, and analytics are not
goals to attain or signals to send their customers
and investors. These technologies are tools to
get closer to customers, empower their
employees, and transform their internal business
processes.
LEADERSHIP CAPABILITIES

1. Committed Leadership

2. Strong Top Down leadership


a. Setting direction, building momentum, and ensuring that the company follows
through.
b. Leaders created a clear and broad vision of the future, started some critical initiatives,
and then engaged their employees to build out the vision over time.
c. The leaders stayed involved throughout the transformation to make the case
for change, to drive the change forward, and to redirect activities and behaviors that
went against the vision.
d. Top-down leadership does mean strong governance and coordination.

3. Make sure all people in all activities are on the same page.
LEADERSHIP
CAPABILITIES
All Digital Masters find ways to build a clear
vision of a radically different future, engage
their employees in the goal, foster strong
bonds between technical and
businesspeople, and steer the course
through strong governance.
LEVEL OF DIGITAL MASTERY
LEVELS OF DIGITAL MASTERY

1. BEGINNERS
a. At the start of the digital journey. Many of them adopt a wait-and-see strategy, trying to gain
certainty before they act.
b. Some believe the digital opportunity is right for other industries, but not for theirs.
c. Others lack the leadership to make something happen. As a result, Beginners have only basic
digital capabilities.
d. Lag behind their competitors on multiple measures of financial performance
Many Beginners use regulation or privacy as an excuse for inaction.

2. FASHIONISTAS
a. Not waiting to act , buy every new digital bauble
b. flaunt their technological trendiness but don’t change what’s behind the veneer.
c. Lack strong digital leadership and governance, they waste much of what they spend.
They need to reverse what they’ve done so that they can integrate and scale their capabilities.
LEVELS OF DIGITAL MASTERY
3. CONSERVATIVES
a. Opposite of Fashionista , Have useful digital leadership capabilities , excess prudence prevents
these firms from building strong digital capabilities.
b. The leader of the companies focus on ensuring that every digital investment is carefully
considered and strongly coordinated.
c. This caution can be useful, especially in highly regulated industries such as health care and
financial services. But it can also create a governance trap that focuses more on controls and
rules than making progress.
Conservatives find it hard to mobilize top management—and the rest of the organization—to
see the bigger prize that digital transformation can bring.
4. DIGITAL MASTERS
a. know how and where to invest
b. Their leaders are committed to guiding the company powerfully into the digital future.
c. Already exploiding their digital advantage to build superior competitive positions in the industry
Digital Masters have overcome the difficulties that challenge their competitors.
INDUSTRIAL MAPPING OF DIGITAL MASTERY
DIGITAL CAPABILITY AND REVENUE GENERATION
Companies with stronger digital capabilities are better at driving revenue with their physical assets.
Make sense :

1. Digital activities can improve and extend the reach of physical ones.
With e-commerce, companies big and small now have access to a global marketplace for their
goods and services.

2. Digital business can help companies to manage more volume with a unit of
existing physical capacity.

3. Help companies grow revenue by reaching out to new customers or engaging


with existing customers in new ways.
Nike’s ability to generate buzz through social media, or Asian Paint’s use of call centers and
mobile devices to leverage its salespeople, helps these companies grow revenue without
investing in more employees or facilities.
LEADERSHIP CAPABILITY AND REVENUE PROFITABILITY
companies that excel in leadership capability are significantly more profitable than their peers..
For Companies that excel at Leadership Capability :

1. Have strong vision and disciplined governance help drive digital investments in
a common direction.
a. Weed out activities that run counter to the future vision of the transformed firm.
b. Scale successful investments enterprise wide
c. Engage their employees in identifying valuable new opportunities

2. Created efficiency and scalability in its digital efforts.


WHERE ARE YOU AT ?
HOW TO GET THERE ?

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