The rapid growth of digital technologies and the extraordinary amount of data that devices and applications collect each day are increasingly driving companies to radically transform the business architecture through which they create and appropriate value. However, companies may fail to extract value from digital transformation due to the disconnection between strategy formulation and strategy implementation. Through the analysis of three case studies of firms that digitally transformed their business-namely ABB, CNH Industrial, and Vodafone-this article presents a framework than can help companies implement their digital transformation strategy and thereby renovate their business model.
This case explores the marketing challenges that a robotics and automation technology start-up faces in the construction industry. A recommended framework for analysis is Rogers' Diffusion of Innovations (see suggested complimentary reading by John T. Gourville). By applying the analysis of the adoption curve, students can work through the process of diagnosing what might be impeding sales of the SAM100 and then identify which market segments, targets and positioning strategies will help accelerate the adoption of this new innovation in order for it to progress through to a robust product lifecycle.
The owner of Manipal Power Laundry asked his nephew, an MBA student, for advice on the business. The company’s operational inefficiencies had led to high operating costs over time. Coupled with regulatory price caps, the situation made the business unsustainable. The owner asked his nephew to provide a solution that would benefit the company both in the short term and over the long term. After observing the various processes, collecting data, and interviewing employees, the nephew decided to use process flow analysis to help the company optimize its operations.
Nashwork was founded in July 2013 in Beijing and developed into the largest co-working space company in China by focusing on rapid expansion and internal growth. Nashwork received A-round financing, which was followed by B-round financing one year later, before a series of problems surfaced in the basic operations of the company. By 2017, after three rough years building its customer base and occupancy, the main problem facing Nashwork was its dated and incompatible internal operations system. The company had to resolve issues with the company’s organizational structure, staff, and skill sets to support the company’s strategic transformation.
In May 2017, the recently appointed chief executive officer of Sobeys, the second-largest grocer in Canada, was considering the company’s financial difficulties. He was tasked with saving Sobeys from near insolvency and planning strategically for the company’s core grocery business. Sobeys had posted a loss of CA$2.1 billion for the fiscal year ending May 2016, compared to a profit of $419 million just a year earlier, partially due to a high-profile acquisition that had gone sour. In addition, a ratings agency had downgraded Sobeys’s debt to junk level, citing underperformance and lost market share as the reasons. The new chief executive officer devised an interim three-year growth plan called Project Sunrise, which had two main objectives: quickly relieve Sobeys of its troubled financial situation, and prepare for the long-term industry disruption that was becoming prevalent, both locally and globally.
In August 2018, the founder and chief executive officer of JD.com, one of China’s largest e-commerce sites, was accused of sexual assault and was arrested. He denied wrongdoing and was released less than a day later. One week after his return to China, JD.com’s share value hit a 19-month low. In November 2018, the company announced that its customer base had shrunk for the first time since 2014. The impact from the investigation into the alleged assault was unclear. However, the incident took place against the backdrop of the Me Too movement, a time when both traditional and social media were used to publicly launch accusations of sexual harassment and abuse, often against powerful celebrities. The sexual assault accusation complicated the almost singular level of power the founder had over his organization. According to JD.com’s corporate bylaws, no board meetings could take place without his presence. What options did the company have to regain market confidence? What strategies could JD.com adopt to minimize impact from the incident? With the founder at the centre of an international scandal, who was responsible to oversee crisis management at JD.com?
On August 11, 2016, the chairman of Aditya Birla Group (ABG) announced that ABG would merge Aditya Birla Nuvo Limited (ABNL) with Grasim Industries Limited (Grasim). ABG’s board also proposed to demerge Aditya Birla Financial Services Limited, a subsidiary of ABNL, from the newly merged Grasim. Financial analysts speculated that the merger was planned to fund ABNL’s telecommunication business before an upcoming spectrum sale and the launch of a strong, competing telecommunication company. The investor community, particularly minority shareholders, were concerned about the merger and felt that ABG’s main motive for the merger was to increase its stake in Grasim. What were the rationales for the merger? Would the promoter’s holding increase after the merger, as the shareholders perceived? Was the share swap ratio between ABNL and Grasim justified? Would there be a post-merger synergy creation, and which of the two companies would transfer wealth to the other? Should the shareholders vote in favour of the merger?
In 2017, the chief information officer (CIO) of Midwest Health System (Midwest), a major health care provider in a central town in the United States, noticed that incorrect billing, data theft, waste, fraud, and abuse in the health care industry had increased over the years. Compliance requirements related to various rules and regulations had also posed increasing challenges. The CIO wanted to meet with his colleagues in the information systems and audit groups to review risks related to information technology and the billing and collection process—the most critical process in terms of its impact on Midwest’s operations and financial statements. His plan was to modify and strengthen existing controls and to institute new ones to mitigate the significant risks identified. The CIO believed that better controls would enable Midwest to improve patient satisfaction and reduce loss of revenues due to incorrect billing, fraud, and other factors by ensuring better security processes while complying with various rules and regulations.
Understanding the drivers of value is key to a technological transformation initiative. In the context of 'Durian Widgets' there is need for detailed analysis of business processes -contrary to initial intuition. On closer examination of the processes involved in manufacturing the widgets, students discover that the robotics technology which (on the surface) seemed cheaper and faster than the current manual operations, will actually result in inferior performance if implemented.
Majid Al Futtaim (MAF) is a lifestyle conglomerate present in 16 countries in the Middle East and North Africa, with annual revenues of $9.6 billion. The case focuses on its data-led, customer-centred transformation that unlocked new sources of growth and mitigated the effects of the covid19 pandemic on business thanks to the group's digital resilience. Students step into the shoes of key MAF business and analytics leaders who established three pillars as the basis of the transformation designed to develop a customer mindset, analytical skill sets, and a test-and-learn approach. They then set about aggregating data across a wide range of businesses and setting up analytics capabilities within the company. A 'deep dive' into an early transformation pilot at Carrefour - one of the operating companies of MAF - used case methology to craft digital and governance strategies that autonomized the use of data, empowered staff to better serve its 560 million annual customers, and ultimately secured new sources of growth.
This case explores InsurTech start-up Lemonade's disruptive new business model aimed at creating and delivering a 'shockingly great user experience' around a 'lovable brand' - in an industry plagued by low customer satisfaction. The digital disruptor leverages principles of behavioural economics to address conflicts of interest and mistrust which prevail in the existing industry. It uses digital technologies to automate, accelerate and manage an impressive amount of work - with few employees - thereby reducings customer effort and , increasing customer satisfaction to achieve cost-effective service excellence. The effortless experience is aggressively priced and relies on a flexible subscription-based pricing model. Artificial intelligence (AI), data and machine learning are key in the race to achieving data parity with incumbents. The case culminates in Lemonade's filing for an initial public offering (IPO) and asks where growth should come from next: incremental improvements, further expansion across the United States, global expansion beyond Germany and the Netherlands, or from new types of property.
Slack was launched in 2014, went public in 2019, and is now a global operation with more than 2,000 employees and 100,000-plus customers. But it hasn't lost its start-up mentality. And never did it move with more speed and clarity of focus than in March 2020, when the Covid-19 crisis brought on two challenges: dramatically increasing customer demand and an extremely abrupt transition to working remotely.The company's customer success and experience teams delivered nearly round-the-clock support free, both to existing customers and to newcomers who needed help getting set up with the product. Interviews with job candidates and the employee onboarding process were moved online. Marketing developed a public service ad for television, committing to help any groups that were working on a Covid-19 response. Slack's engineers ensured that its systems were operational 99.9% of the time in a period of soaring demand. Customers with 1,000 or 10,000 Slack users suddenly wanted to expand to 50,000. New customers wanted comprehensive proposals immediately. Organizations of all kinds had to transform the way they worked, all at once. This crisis, Butterfield writes, "has created an opportunity for us and others to become more agile, to take on changes that once seemed daunting, to reimagine organizational culture...and to reposition for future growth."
In a 2018 Workforce Institute survey of 3,000 managers across eight industrialized nations, the majority of respondents described artificial intelligence as a valuable productivity tool. But respondents to that survey also expressed fears that AI would take their jobs. They are not alone. The Guardian recently reported that in the UK "more than 6 million workers fear being replaced by machines." AI's advantages can be cast in a dark light: Why would humans be needed when machines can do a better job? To allay such fears, employers must set AI up to succeed rather than to fail. The authors draw on their own and others' research and consulting on AI and information systems implementation, along with organizational studies of innovation and work practices, to present a four-phase approach to implementing AI. It allows organizations to cultivate people's trust--a key condition for adoption--and to work toward a distributed cognitive system in which humans and artificial intelligence both continually improve.
Leaders often view power as a purely personal quality, derived from their formal roles and titles, accreditations, skills, and experience; from the information they control and the reputation they've built; and from their charisma, resilience, and energy. But as most discover, effectively wielding power is rarely straightforward. Simply exercising control over others--the traditional concept of power--is often not the best strategy; it may not even be an option. Indeed, the most potent uses of power often involve no direct influence tactics at all. The authors have developed an approach to power that goes beyond exerting control and mobilizes others' energy and commitment. It focuses on three core dimensions: Situational power rests on the ability to align objectives, the environment, and bases of power. Relational power is about connections and coalitions: They can be a major source of support, advice, information, and resources--but if neglected or ignored, they can loom as potential points of resistance. Dynamic power involves continually adapting influence strategies to changes in organizational and social systems. The degree to which leaders draw on all three dimensions of power determines how effectively they get things done.
Many people don't tackle negotiations in a proactive way; instead, they simply react to moves the other side makes. While that approach may work in a lot of instances, complex deals demand a much more strategic approach. The best negotiators look beyond their immediate counterparts to see if other constituencies have a stake in the deal's outcome or value to contribute; rethink the scope and timing of talks; and search for connections across multiple deals. They also get creative about the process and framing of negotiations, ditching the binary thinking that can lock negotiators into unproductive zero-sum postures. Applying such strategic techniques will allow dealmakers to find novel sources of leverage, realize bigger opportunities, and achieve outcomes that maximize value for both sides.
The view of manual employees as mindless machines dates back to the Industrial Revolution, when most workers were poorly educated, and was entrenched by Frederick Taylor, whose bureaucratic model institutionalized a caste system of thinkers and doers that still persists. Which is unfortunate, because that model allows a vast reservoir of human ingenuity to go untapped. As a result, firm performance suffers. But there is a path out of this trap, as the French tire manufacturer Michelin has found. Since 2012, under the banner of "responsabilisation" (French for empowerment), the company has dramatically increased the authority and accountability of workers on the front lines. The firm kick-started this change through a bottom-up process involving targeted experiments in a handful of plants and slowly scaled up successful approaches. The outcome: A workforce that's deeply knowledgeable and relentlessly inventive, and that had delivered half a billion dollars in manufacturing improvements by 2020.
Humor is widely considered essential in personal relationships, but in leaders, it's seen as an ancillary behavior. Though some leaders use humor instinctively, many more could wield it purposefully. Humor helps build interpersonal trust and high-quality work relationships and influences behaviors and attitudes that matter to leadership effectiveness, including employee performance, job satisfaction, organizational commitment, and creativity. These benefits don't come without potential costs. The guidelines in this article suggest ways to capture the benefits of humor while avoiding the downside risks.