Digital transformation is one of the top buzzwords of our time. However, looking carefully, a significant part of the meaning involves technology and platforms that harness value from networks of digital relationships.
Digital business networks are one of the critical assets of any organization, although most companies do not have systematic methods for using those networks to greatest advantage.
During a CXOTalk conversation with a prominent business person, Barry Libert, he explained a simple, five-step approach that companies can use to develop digital relationship networks as a corporate asset. He calls this network orchestration.
Libert's career is rather extraordinary. He is currently CEO of research and investment firm, OpenMatters, and has served as board member or advisor for organizations such as Knowledge @ Wharton, InnoCentive, and others. He has also co-authored 5 books and 20 ebooks; published 1,100 articles in the NYT, WSJ, HBR, Forbes and FT; appeared on CNN, CNBC, NPR, and Bloomberg TV; and delivered 500+ keynote speeches to 30,000 people globally.
Barry has spent his career developing frameworks and approaches for corporate value creation.
In this CXOTalk summary video, Libert describes five practical steps to develop digital business networks.
You can watch our entire conversation and read a complete transcript on the CXOTalk site. Here are edited comments from Barry, describing the five steps:
There are five steps, which we call the "five step pivot:"
First, pinpoint the business model. Most companies don't even know which business model they're in.
I ask them, what do you do? They make or sell something; hire people and offer services; create technology, or they're already digital networks. So the first thing is pinpoint who you are from a business model perspective.
Two, inventory your networks.
For example, consider Deloitte, Accenture, or KPMG. They can count all their employees, but should also count every one of their customers; I don't mean company names, but their individual customers. Think about those customers as freelance providers of insights including their alumni networks.
Inventory everyone in your network, just as you would inventory things and people, including the edges of your network. Just like GE now inventories every piece of machinery used by customers.
Three, value the network. Start to value the networks, whether it is big data value, insight value, knowledge value, or service value. You start to value them.
Fourth, operationalize the network. Invest in the network and build the platform that allows the network to interact.
Fifth, track and measure KPI's. Key performance indicators allow you to track and measure performance of the network.
Think about it as network orchestration as distinct from network ownership. In the future, we see business leaders being similar to jazz orchestra leaders with everyone doing improv.
The person orchestrating that improvisation will be the most powerful because he or she understands command and control doesn't work for a freelance economy where 50% of us aren't non-employed, not unemployed, or non-employed. We will have non-managers with non-owners - a funny way of thinking about it - and non-businesses.
Every single organization needs to chart itself inside out to enable the network, rather than the organization, to be center of the universe.
Digital is only half of the puzzle. Being digital, you can become a software or big data company, and that's one of the two digital transformations you can do. If you're a services company, you can find your intellectual property and become a software big data company -- that would be valuable for a services company.
And the same thing for an industrial company -- to begin to codify its social property and build technology around it, which a lot of people doing and everybody is doing in Silicon Valley.
But that's only half of the puzzle. That turns you into tech creator company -- one of the four business models. It doesn't turn you into a digital network, it just does not.
Go to the CXOTalk site to watch the entire conversation and read a complete transcript of the fascinating conversation with Barry Libert.
My colleague, Lisbeth Shaw, assisted with this post.