managing the digital transformation. how companies develop successful products faster
TRANSCRIPT
Contents
● Digital Transformation: Hype or real? ● Elements of the Digital Transformation ● Digital Transformation &
How to develop successful products faster
In Germany, exports have reached record levels, economy has seen substantial growth and
so has employment. This is what makes Germans skeptical in terms of digital revolution.
At the same time, digitization has changed our life circumstances and that is where we
experience a big awakening.
“ ”
Germany is not yet ready for the Digital Revolution
Hannover: Chancellor Angela Merkel has criticized Germany’s resources in digitizing.
"We just need to go up a gear in Europe, just as we need to set a goal in Germany", the
CDU - Politician said on Sunday at the opening of national industrial exhibition Hannover Messe.
“ ”
Europe and Germany Need to Catch Up with Digitalisation
It is not the strongest of the species that survives,
nor the most intelligent that survives.
It is the one that is most adaptable to change.
Charles Darwin
“ ”
Innovation Comes out of Nowhere
„I looked at the numbers and was speechless “ A programmer’s experiment
Duration of actual development: 6h
Result: 2 Mio. App-Downloads, $72.000 Dollar Revenue + Exit- Revenue
Gründerszene, 07.04.15
App name: 7 Minute Workout
2003 - the company was founded
2008 - they released their first car, Tesla Roadster; 2.400
Roadsters produced so far
2012 - they released Model S
2013 - Car of the Year (German Automagazin Motor
Trend); 50.000 Model S produced so far
2014 - the company reached 6.000 employees
2015 - they announced the production start for Model X
Competitors Come out of Nowhere Tesla Motors
Roadster
Model S
0
10000
20000
30000
40000
50000
60000
Audi A7 Audi A8 Porsche Panamera
Phateon BMW 7er Tesla Model S
Car ProducAon worldwide luxury class 2013 2014
Competitors Come out of Nowhere Tesla Motors
Tesla’s advantages over traditional automobile manufacturers:
• Does not have to develop engines, transmissions;
• Not obliged to observe emission values; • The software is their core value, besides
the batteries; it scales better on all models and is cheaper to produce.
* Not shown: Mercedes S-Class
● High-End-Technologies easily available
● Software allows for fast productisation
● Internet allows for global distribution
Lower Barriers to Entry than Ever Before
Aftenposten‘s Strategy: Set up a separate entity to go after a market that was undesirable and low margin from
the perspective of its newspaper business. The new brand was allowed and even encouraged to cannibalise the
older, higher margin parent company, Aftenposten.
Escaping the Innovator’s Dilemma by Excubation
• Telekom: hub:raum
• ProSiebenSat.1-Accelerator
• Axel Springer: Plug’n’Play
• Rocket Internet: ProjectA
• Scout24-Gruppe: You Is Now
• SAP Startup.Focus.
• Burda-Media: dldventures
• REWE
• Coca-Cola
• Bayer Health Care
• Allianz
• Siemens Technology Accelerator
20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0% 55.0% 60.0%
2008 2009 2010 2011 2012 2013 2014
Germany UK USA
Missing Fault-Tolerance Share of 18 to 64 year old people who do not establish a company due to the fear to fail.
The size of the screen in an average
car today shows the importance of
software to the manufacturer.
The big screen shows the importance Tesla
Places on software. Just like the big screen
of the iPhone shows the importance of
its Operating System.
In addition to traditional engineers, we are mainly looking for IT specialists and software
developers. It is important for us to develop software ourselves. “ ”
BMW Hires 8000 New Employees in 2015
60%-90% of ideas do not improve the metrics they were intended to improve.
Ronny Kohavi Microsoft’s General Manager Experimentation Platform (before: Amazon's Data Mining and Personalization group)
What Improves a Software Product?
“ ”
Research results presented by Ronny Kohavi:
Why Lean and Agile Product Development?
80% of startups are successful with another product than the one they initially started with.
Lean and Agile Product Development
Check your idea with a Minimum Viable Product (MVP)
Refa graphic slide 42
analog
digital Agile Software Development
Lean Enterprise
Levels of Digital Transformation
Lean & Agile Product Development
Elements of the Digital Transformation
Digital Strategy • Digital targets • Digital ways to reach the targets • Methods to implement the strategy.
Lean Leadership • Leading and enabling instead of giving orders • Decisions are oftentimes made in teams.
Digital Products • For digital markets and customers • Digital business models • The user is the king – again!
Agile Operations • Fastest time to market • Fast response to market requirements.
Digital Culture • Sharing knowledge instead of hoarding • Cooperation instead of demarcation • Two-way communication with customers.
Digital Employees • Love to learn • Able to work independently • Flexible in time, location and know-how.
Digital Governance • New targets for the company and employees • Digital, business-relevant KPIs • Open and continuous monitoring of all KPIs.
Digital Technologies • E.g. cloud instead of own hardware racks • Responsive and mobile-enabled products.
Talent & the Digital Transformation “An employer without sufficient Digital Competitiveness is not the right employer for me.”
https://www.prophet.com/about/news/552-wie-gut-meistert-ihr-arbeitgeber-den-technologischen-wandel
14%
42%
33%
11%
strongly agree
tend to agree
disagree
strongly disagree
In an industrial company, avoid software at your own peril . . .
A software company could disintermediate GE someday,
and we're better off being paranoid about that.
Jeff Immelt
“
”
The autocratic behavior of Piech represented a crisis at Volkswagen.
Global corporations that want to be successful in the 21st century
must perform differently.
Piech has recently resigned.