most of the concepts that we teach today
in business schools we have learned by
observing companies many of these
concepts that we teach today as theory
we have learned by observing companies
particularly in the automotive sector
that’s changing now the new lessons we
are learning and new concepts that you
were building we are learning by
observing a new type of company which we
refer to as the digital Titans and in
particular the kind of person who comes
out and manage your leads companies
learning from these digital titles we
refer to this person as a digital
innovator how did this happen how do we
come about to following digital Titans
and by digital titles we mean companies
like Facebook Amazon alphabet Apple
$0.10 Baidu and Alibaba how did this
happen how did this come about I think
Marc Andreessen captured this moment
pretty well when this transformation
occurred the leadership moved from the
old era companies to the new era
companies and he called this phenomenon
as software is eating the world many
would have heard that before what he
meant by that was every product or
service has now software embedded in it
now when you put software into a product
or service it just doesn’t do a plus but
what it does is it changes how this
product or service behaves now it
becomes more like and the company itself
becomes more like a software company and
what that the consequences of that are
that now you have to behave and treat
other companies as partners in your
ecosystem and you move into something
called ecosystem based competition just
with this act of introducing software
but companies does didn’t stop there in
addition to adding software they also
connected these things and put sensors
on them and that created this whole
transformation that we are seeing the
transformation actually started because
these smart objects this data objects
with software and connectivity started
producing boatloads of data and the
assumption is that hidden in the data
are information about your products and
services and market that you start
thinking about this data as an asset now
if you look at the LEAs asset and how do
you get value out of it this is where
digital strategy comes in by digital
strategy what we mean is an action plan
that helps you understand the ecosystem
and then use the technology to get
insights from this data and and compete
effectively in fact the actions that you
can take could result in highly even
higher more highly personalized products
and services that you can into the
marketplace here’s where the titans come
in very handy because the titans have
figured out how to do this very
effectively and in fact they are now
creating the multi purpose platforms of
the day and they are a threat to
companies in every sector for example if
you take the traditional sectors some of
the companies have responded very well
and it’s worth learning from them too so
if you take a company like GE GE was
threatened by these platforms
general-purpose platforms that are
showing up and they responded with their
own version of it which they referred to
as industrial Internet and their
platform itself as predix company like
Ford has introduced Inc and they’ve used
concepts like digital replicas to combat
this even agriculture has been impacted
john deere today do it does something
called precision agriculture in order to
respond to the threat from these digital
titles when I say a threat from digital
items what I mean by that is they are
ending up commodity
industry after industry let’s take a
simple example of the automotive sector
when Google introduced Android auto or
Apple does the car play what this does
is that it takes a car may be used to
talk about the mechanics of the car and
changes the conversation to software and
its features so today when you look at a
car and it’s more about the software and
connectivity that you’re talking about
and this happens in software sector
every time a new layer of software is
formed they make the layers below it
obsolete or commoditized so this
operating system actually made the
conversation about cars more about
software features in fact uber has taken
it a step further they created a layer
of service even above the Android auto
and the car clay and then they’re
creating transportation as a service and
commoditizing everything else beneath it
so this is the threat that exists in
sector after sector now looking at all
these moves and countermoves what I’ve
done is come up with seven lessons that
one should take away from this in order
to be like act like a digital title
number one is this notion of a digital
customer in a in the traditional
competitive sense when you add an extra
customer Pia portfolio this may
typically result in addition of physical
assets but today when you add for the
digital customer most companies the
digital titles when they add a customer
they add information assets and if you
treat the customer right and provide the
right value they will give you data in
exchange for the interaction that you
have with them and this data is the one
that’s turning out to be the critical
asset the second thing that we learn
from observing the digital Titans was
this concept called a digital replica
what this is is that every asset the
company has will also have a
corresponding digital version of it so
for example
if you have a car if Ford has a car on
the street they will have a digital
version a digital model of the car along
with information about the current
status of that car so this would mean
that not only you need modelers who
understand cars the mechanics and so on
you also need the current state in order
to be able to say what the car is
actually doing right now so if you think
about product recalls and supposed to
recalling every car now you can recall
specific cars maintenance as opposed to
doing maintenance and a schedule you
actually do it based on the reality in
this particular part is failing then you
can catch it before that and deal on it
with it one and one one one at a time
the next concept I want to talk about is
this notion of consumption ecosystem so
far we have been focused on the
production aspect of things the supply
chain aspect of things but what the
digital Titans are telling us is look at
how a project product is being consumed
so for example today most people like to
hack into products is do-it-yourself
there’s a driven innovation it’s become
pretty popular what that does is you may
introduce a product with a particular
idea in mind how comes you must end up
using it turns out to be quite different
from what you’re intended now as opposed
to trying to redirect them to use it the
way you want it instead it’s now
possible to find out how they’re
actually using it and then add to that
value so for example if you take the
nest thermostat and you put it out there
now it’s possible to track the fact that
customers are connecting it with an LG
washing machine or your automatic door
lock or your garage opener and so on but
what if that you find that the home
automation or the digital assistant they
connected with always happens to Amazon
echo now Google can look at that and say
what we need introduce a product which
is just like Amazon echo and they will
push now on Google home so it’s possible
to understand how the network of
connections of your product is if
all ring and then make sure that your
products play a key role in that
particular network the next idea that
these digital tidings of TARDIS is
experimentation
they don’t assume that they know what’s
going to happen and they don’t launch it
before they understand the market very
well so Amazon were at the same time
have many experiments going on right now
they’re doing some experiments the
retail Amazon Co they have uh drones
dropping enough stuff right right now or
Amazon fresh these different experiments
ago learned from and then they decide
what product the service did the same
goes at fourth if I’m ability
experiments recently to figure out how
mobility is going to impact them and
many ideas came out of it in some with
help from third parties one of my four
pass which now users to find parking
spots in current cities which turns out
to be a very important problem so the
new releases they have come up with a
solution to that now the trend which we
observe with digital with digital
tightness is concept of digital engines
so they’re now using a artificial
intelligence and machine learning
techniques to get a lot out of their
data and then they are using those
insights to provide even better products
and services in fact what they’ve done
is they’ve taken some of their core
assets and started providing it as a
service so if you take facebook they
provide torch as a service Amazon just
announced that they’re going to provide
AI as a service so it’s now possible to
use the engines that these companies are
being using in your own settings the
another consequence of what it’s
happening over there is now you can
rethink how where you want to embed the
decisions either when you’re designing
the product or when the product is being
used
Tesla change the conversation by saying
when they added a feature to the car
they send it as an up
electronically so it was every car got
an autopilot but it was done through the
internet wirelessly it was done some of
those updates similarly when you have an
autonomous car some of the decisions can
be made locally so if you want to know
how the cars ride has to be whether it’s
going to be the it’s going to have an
economic version or a comfort version or
a sporty version you that’s a local
decision but if you want to plan a route
you can get the information weather and
traffic patterns centrally so you can
redistribute how you make these
decisions one of the interesting new
products that I saw was this Nike shoe
where now you can the Nike makes a lot
of wonderful decisions the factory and
designs the shoe the decision about how
snug it should be could be made locally
now because as users decide how to
change it they can change the snugness
of that fit another lesson which which
is critical was some these digital
Titans operate simultaneously in
multiple interlocked ecosystems so it’s
not just one thing they do it this at a
time they do multiple things at the same
time so if you take a company like
Amazon or Google they are in the media
business there they have an arm in the
operating system business they are in
these multiple businesses and in some
businesses they’re driving the show they
are a platform provider in other
businesses they’re simply a component
provider but no matter what the
different roles they play they partake
in the profits they get from these
multiple ecosystems so it’s not just
about focus on one thing but honestly
being present in in multiple ecosystems
so while these these possibilities exist
one of the things that’s coming out as a
major issue is the data that’s coming
out of all these exercises and how do
you treat this data not a week goes by
where you hear that some company has
been hacked the data has been
compromised
so one has to be cautious about the data
one collects the other thing that you
need to be careful about
is the use of algorithms we are using
algorithms quite a bit right now and
many of these algorithms come up with
decision rules that get automated within
these companies and they are embedded
deeply in these algorithms one should be
aware of that and be able to audit what
are the rules that we are putting into
these systems and if there is any
systematic bias that starts creeping
into the system and this is which there
should be a major concerns as
individuals what should you do and the
first thing is you understand that the
transformations that are happening right
now are going to be led by what we are
referring to as digital innovators so
it’s very important for you to follow
the digital Titans be able to understand
the different moves they’re making
deconstruct those moves and come up with
your own set of lessons lessons learned
in other words learn how to learn about
these companies the fact that these
digital innovators are going to lead in
every sector is clear now the question
is do you want to be a digital innovator
in business schools we have learned by
observing companies many of these
concepts that we teach today as theory
we have learned by observing companies
particularly in the automotive sector
that’s changing now the new lessons we
are learning and new concepts that you
were building we are learning by
observing a new type of company which we
refer to as the digital Titans and in
particular the kind of person who comes
out and manage your leads companies
learning from these digital titles we
refer to this person as a digital
innovator how did this happen how do we
come about to following digital Titans
and by digital titles we mean companies
like Facebook Amazon alphabet Apple
$0.10 Baidu and Alibaba how did this
happen how did this come about I think
Marc Andreessen captured this moment
pretty well when this transformation
occurred the leadership moved from the
old era companies to the new era
companies and he called this phenomenon
as software is eating the world many
would have heard that before what he
meant by that was every product or
service has now software embedded in it
now when you put software into a product
or service it just doesn’t do a plus but
what it does is it changes how this
product or service behaves now it
becomes more like and the company itself
becomes more like a software company and
what that the consequences of that are
that now you have to behave and treat
other companies as partners in your
ecosystem and you move into something
called ecosystem based competition just
with this act of introducing software
but companies does didn’t stop there in
addition to adding software they also
connected these things and put sensors
on them and that created this whole
transformation that we are seeing the
transformation actually started because
these smart objects this data objects
with software and connectivity started
producing boatloads of data and the
assumption is that hidden in the data
are information about your products and
services and market that you start
thinking about this data as an asset now
if you look at the LEAs asset and how do
you get value out of it this is where
digital strategy comes in by digital
strategy what we mean is an action plan
that helps you understand the ecosystem
and then use the technology to get
insights from this data and and compete
effectively in fact the actions that you
can take could result in highly even
higher more highly personalized products
and services that you can into the
marketplace here’s where the titans come
in very handy because the titans have
figured out how to do this very
effectively and in fact they are now
creating the multi purpose platforms of
the day and they are a threat to
companies in every sector for example if
you take the traditional sectors some of
the companies have responded very well
and it’s worth learning from them too so
if you take a company like GE GE was
threatened by these platforms
general-purpose platforms that are
showing up and they responded with their
own version of it which they referred to
as industrial Internet and their
platform itself as predix company like
Ford has introduced Inc and they’ve used
concepts like digital replicas to combat
this even agriculture has been impacted
john deere today do it does something
called precision agriculture in order to
respond to the threat from these digital
titles when I say a threat from digital
items what I mean by that is they are
ending up commodity
industry after industry let’s take a
simple example of the automotive sector
when Google introduced Android auto or
Apple does the car play what this does
is that it takes a car may be used to
talk about the mechanics of the car and
changes the conversation to software and
its features so today when you look at a
car and it’s more about the software and
connectivity that you’re talking about
and this happens in software sector
every time a new layer of software is
formed they make the layers below it
obsolete or commoditized so this
operating system actually made the
conversation about cars more about
software features in fact uber has taken
it a step further they created a layer
of service even above the Android auto
and the car clay and then they’re
creating transportation as a service and
commoditizing everything else beneath it
so this is the threat that exists in
sector after sector now looking at all
these moves and countermoves what I’ve
done is come up with seven lessons that
one should take away from this in order
to be like act like a digital title
number one is this notion of a digital
customer in a in the traditional
competitive sense when you add an extra
customer Pia portfolio this may
typically result in addition of physical
assets but today when you add for the
digital customer most companies the
digital titles when they add a customer
they add information assets and if you
treat the customer right and provide the
right value they will give you data in
exchange for the interaction that you
have with them and this data is the one
that’s turning out to be the critical
asset the second thing that we learn
from observing the digital Titans was
this concept called a digital replica
what this is is that every asset the
company has will also have a
corresponding digital version of it so
for example
if you have a car if Ford has a car on
the street they will have a digital
version a digital model of the car along
with information about the current
status of that car so this would mean
that not only you need modelers who
understand cars the mechanics and so on
you also need the current state in order
to be able to say what the car is
actually doing right now so if you think
about product recalls and supposed to
recalling every car now you can recall
specific cars maintenance as opposed to
doing maintenance and a schedule you
actually do it based on the reality in
this particular part is failing then you
can catch it before that and deal on it
with it one and one one one at a time
the next concept I want to talk about is
this notion of consumption ecosystem so
far we have been focused on the
production aspect of things the supply
chain aspect of things but what the
digital Titans are telling us is look at
how a project product is being consumed
so for example today most people like to
hack into products is do-it-yourself
there’s a driven innovation it’s become
pretty popular what that does is you may
introduce a product with a particular
idea in mind how comes you must end up
using it turns out to be quite different
from what you’re intended now as opposed
to trying to redirect them to use it the
way you want it instead it’s now
possible to find out how they’re
actually using it and then add to that
value so for example if you take the
nest thermostat and you put it out there
now it’s possible to track the fact that
customers are connecting it with an LG
washing machine or your automatic door
lock or your garage opener and so on but
what if that you find that the home
automation or the digital assistant they
connected with always happens to Amazon
echo now Google can look at that and say
what we need introduce a product which
is just like Amazon echo and they will
push now on Google home so it’s possible
to understand how the network of
connections of your product is if
all ring and then make sure that your
products play a key role in that
particular network the next idea that
these digital tidings of TARDIS is
experimentation
they don’t assume that they know what’s
going to happen and they don’t launch it
before they understand the market very
well so Amazon were at the same time
have many experiments going on right now
they’re doing some experiments the
retail Amazon Co they have uh drones
dropping enough stuff right right now or
Amazon fresh these different experiments
ago learned from and then they decide
what product the service did the same
goes at fourth if I’m ability
experiments recently to figure out how
mobility is going to impact them and
many ideas came out of it in some with
help from third parties one of my four
pass which now users to find parking
spots in current cities which turns out
to be a very important problem so the
new releases they have come up with a
solution to that now the trend which we
observe with digital with digital
tightness is concept of digital engines
so they’re now using a artificial
intelligence and machine learning
techniques to get a lot out of their
data and then they are using those
insights to provide even better products
and services in fact what they’ve done
is they’ve taken some of their core
assets and started providing it as a
service so if you take facebook they
provide torch as a service Amazon just
announced that they’re going to provide
AI as a service so it’s now possible to
use the engines that these companies are
being using in your own settings the
another consequence of what it’s
happening over there is now you can
rethink how where you want to embed the
decisions either when you’re designing
the product or when the product is being
used
Tesla change the conversation by saying
when they added a feature to the car
they send it as an up
electronically so it was every car got
an autopilot but it was done through the
internet wirelessly it was done some of
those updates similarly when you have an
autonomous car some of the decisions can
be made locally so if you want to know
how the cars ride has to be whether it’s
going to be the it’s going to have an
economic version or a comfort version or
a sporty version you that’s a local
decision but if you want to plan a route
you can get the information weather and
traffic patterns centrally so you can
redistribute how you make these
decisions one of the interesting new
products that I saw was this Nike shoe
where now you can the Nike makes a lot
of wonderful decisions the factory and
designs the shoe the decision about how
snug it should be could be made locally
now because as users decide how to
change it they can change the snugness
of that fit another lesson which which
is critical was some these digital
Titans operate simultaneously in
multiple interlocked ecosystems so it’s
not just one thing they do it this at a
time they do multiple things at the same
time so if you take a company like
Amazon or Google they are in the media
business there they have an arm in the
operating system business they are in
these multiple businesses and in some
businesses they’re driving the show they
are a platform provider in other
businesses they’re simply a component
provider but no matter what the
different roles they play they partake
in the profits they get from these
multiple ecosystems so it’s not just
about focus on one thing but honestly
being present in in multiple ecosystems
so while these these possibilities exist
one of the things that’s coming out as a
major issue is the data that’s coming
out of all these exercises and how do
you treat this data not a week goes by
where you hear that some company has
been hacked the data has been
compromised
so one has to be cautious about the data
one collects the other thing that you
need to be careful about
is the use of algorithms we are using
algorithms quite a bit right now and
many of these algorithms come up with
decision rules that get automated within
these companies and they are embedded
deeply in these algorithms one should be
aware of that and be able to audit what
are the rules that we are putting into
these systems and if there is any
systematic bias that starts creeping
into the system and this is which there
should be a major concerns as
individuals what should you do and the
first thing is you understand that the
transformations that are happening right
now are going to be led by what we are
referring to as digital innovators so
it’s very important for you to follow
the digital Titans be able to understand
the different moves they’re making
deconstruct those moves and come up with
your own set of lessons lessons learned
in other words learn how to learn about
these companies the fact that these
digital innovators are going to lead in
every sector is clear now the question
is do you want to be a digital innovator
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