Sunil Gupta - Driving Digital Strategy: A Guide to Reimagining Your Business
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"I've worked with many companies on digital transformations, and it is refreshing to see Sunil Gupta's tight framework for what drives success. He makes clear the challenges involved, the deep underlying issues you need to attack, and the case for going big. In health care right now, I personally see the reality of everything Gupta is describing and the importance of taking his all-in approach."
--DAVID EDELMAN, Chief Marketing Officer, Aetna "Highly interesting and extremely relevant, Driving Digital Strategy is an essential book for leaders struggling with the many challenges and opportunities of digitization."
--HAVARD S. ABRAHAMSEN, CEO, PwC Norway
"Sunil Gupta delivers a world-class guided tour on how to understand, design, and drive a digital strategy--an intelligent, inspiring, and intriguing call for action!"
--SOREN ROSSEL, Head, PwC's Executive Education Global Centre of Excellence "In a world where technology and new age companies have already disrupted most of the industries and businesses, it is imperative for every business to go all-in on digitization in order to compete and succeed. Driving Digital Strategy is the quintessential guide for achieving that transformation."
--VIJAY SHEKHAR SHARMA, founder and CEO, Paytm
Digital
Strategy
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Copyright 2018 Sunil Gupta All rights reserved
Printed in the United States of America 10 9 8 7 6 5 4 3 2 1
No part of this publication may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form, or by any means (electronic, mechanical, photocopying, recording, or otherwise), without the prior permission of the publisher. Requests for permission should be directed to , or mailed to Permissions, Harvard Business School Publishing, 60 Harvard Way, Boston, Massachusetts 02163.
The web addresses referenced in this book were live and correct at the time of the book's publication but may be subject to change.
Library of Congress Cataloging-in-Publication Data is forthcoming.
The paper used in this publication meets the requirements of the American National Standard for Permanence of Paper for Publications and Documents in Libraries and Archives Z39.48-1992.
ISBN: 9781633692688
eISBN: 9781633692695
To
Kamal for your love and inspiration
and
Tarun and Kunal for bringing so much joy
and happiness to my life
Disruption and transformation get a lot of hype, and for good reason. Digital technologies have had a profound impact on the world, disrupting entire industries while also enabling companies such as Facebook and Amazon to achieve exponential growth. There's no doubt that incumbents have struggled as new and nimble players have emerged with innovative business models. But there's also a more important story to tell: as much as digital has posed a threat to the old guard, and continues to do so, it also presents an endless number of opportunities for companies from traditional industries.
The Weather Company is a case in point. When consumers moved away from TV to mobile phones but did not stay long enough to generate ad revenues, the company execs pivoted and created a service called WeatherFX, which uses data from its app to help retailers predict how the weather will affect consumer purchasing behavior. And other companies are finding success, too. Faced with declining print subscriptions and the loss of revenue from classified ads, the New York Times built a highly successful digital-subscription business with over 2.5 million subscribers, and the company is on track to generate $800 million in digital revenue by 2020. Car companies such as Cadillac are experimenting with subscription services, Sephora and other retailers are using apps to enhance the in-store experience, and Goldman Sachs has created an online platform (and asked its competitors to join in as well).
As a business leader, you've no doubt had "digital" on your mind for quite some time, and you've probably started new initiatives and run experiments in an effort to "digitize" your business. Some of these have probably been fruitful. But if you're like the executives I interact with, you're looking to make a more transformative impact. But how? If your company lacks the digital DNA and agility of a startup, how can you take full advantage of the unique opportunities that the digital era provides?
For over ten years, as a professor at Harvard Business School, I've studied digital strategy and have worked with scores of companies on their digital transformations. While doing so, I have seen firsthand what works best and what doesn't, and what I've learned is that the leaders who achieve transformative results go all-in on digital. That is, they don't treat digital strategy as separate from their overall strategy. Instead, they lead with a digital-first mentality and make sure their digital strategy touches all aspects of their organizations. Digital transformation requires strengthening the core and building for the future at the same time.
This is what this book, using a broad range of examples, will show how to do. It compiles case studies and best practices from companies who have reinvented their businesses, and provides a framework that will help you create an all-encompassing digital strategy while leading your entire organization through the transformation process.
To mitigate the effects of digital disruption while also exploring new opportunities, companies have typically followed some combination of these three strategies--creating small, independent units or startups within the larger organization; doing a series of digital experiments; and/or leveraging technology to cut costs and improve efficiency. However, in most cases these initiatives have led to limited success.
Almost every large company launches independent digital units or has outposts in Silicon Valley, with the hope that a handful of young entrepreneurs will spark innovation for the firm. The Spanish telecom giant Telefonica, for example, launched an independent unit, Telefonica Digital, in September 2011. While the parent company had its headquarters in Madrid, the new Digital unit was housed in London with a separate CEO and an independent budget. Like most telecom companies, Telefonica had failed to benefit from the mobile revolution. Instead, new players such as Skype and WhatsApp were beginning to threaten the very core of its business. Telefonica's management hoped that the Digital group would come up with new and innovative ideas for products and services that would provide a future direction for the company.
With an ambitious agenda, the freedom to operate independently, and a large budget, the Telefonica Digital team started coming up with just such ideas. As expected, many of these ideas were quite new for a telecom company at the time. After developing, testing, and piloting them, the Digital group sent the promising ideas to the Madrid headquarters for potential global launch. However, Telefonica faced resistance from country heads who were neither convinced about these ideas nor had the capabilities to implement them. After three years of this experiment, the company shut down its Digital unit in London and moved all activities back to Madrid.
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