Benjamin Beeckmans is a professor of Entrepreneurship and a regular coach for entrepreneurial and intrapreneurial projects. He held various positions in finance and marketing at Procter & Gamble and Coca-Cola; he founded Bluecorp, a software development company based in Sri Lanka, Teatower.com, a manufacturer and online reseller of tea-based products, The Bridge, an innovation consulting firm and Hyperion, a personal genomic profiling platform – in short, Benjamin is a serial entrepreneur passionate about innovation and digital businesses. Workero was lucky enough to get an interview with Benjamin before the upcoming masterclass that he will give on the 8th of June to the Workero by P&G's inQbet campus community.
Digitisation: what people often get wrong
Workero: You’re going to talk about changing your business model and incorporating digitization into your business. When I hear the word ‘digitisation,’ I immediately think of things such as having one’s data in the Cloud, Intelligent Process Automation (IPA), and things like automatic data-capturing.
But digitalisation, and in particular, digital transformation, also encompasses other less obvious things, such as having leadership with a clear vision, and people who drive and communicate digital transformation, and so forth.
What are some misconceptions that people have about digital transformation/what do you wish people knew before setting out on the digitisation process?
Benjamin: I think what people often forget is that digitisation is just one component in the bigger growth and transformation process of every company.
You have to remember that it is a transversal tool that helps you accelerate, fast-forward, and make existing business and processes better.
Yet it is also something that is now part of the core of every company’s business, and influences many areas in business. Think of it as being like electricity. Everyone needs it and uses it. If you don’t use it, you’ll be left behind.
In sum, companies must remember that their main focus is still value-creation, value-delivery and value-capture. Digitalisation is just one tool they can use to create, deliver, and capture value, and should not become the ultimate focus of the company. Of course it is important to make sense of how digitisation affects these processes, and that’s why, next week during the masterclass, I will look at how digitisation impacts the six dimensions of your business processes and business design. But ultimately, you must keep in mind that digitisation, while it offers new opportunities, is there to support your businesses’ aim of value-creation, value-delivery, and value-capture.
I also believe that it is every manager’s responsibility to understand what is at stake when you do not do digitalisation right. If a manager cannot and will not take the trouble to understand the new world of digital, they must simply fire themselves.
Digitisation in itself has no value
So, you cannot just put your head in the sand and ignore digitisation. But at the same time, you also shouldn’t think of digitisation as this magical thing that will transform your company; instead it is, so to speak, part of your toolbox that you should use to run your business.
That’s it. The incorporation of modern technologies into an organisation’s process and strategy to achieve business-goals (such as improving customer-outcomes, customer satisfaction, operational agility, etc), does not mean that the business goals change. The goals or the strategy stays the same.
The way to fulfil your strategy or to reach your goals could indeed be accelerated and facilitated through the introduction of digital tools, but in itself the tools create no value.
This is essential to grasp. I ascribe no value to Cloud computing, nor to automatic data-capturing, because in themselves, these things create no value. Value is only introduced once these tools are used properly and guided by managers who are clear about the business goals they must attain, and who embed these tools into processus that create, deliver, or capture value.
The role that managers should play in the digitisation process
And what should managers do to stay on top of digitisation? What kind of attitude should they adopt towards it? What kind of support would they need to tackle a digital transformation process, especially if they don’t have the technical know-how?
The illiterate of the future will not be those who cannot read or write; it will be those who cannot learn, unlearn and relearn
So, the challenge for the managers will be to reach the realisation that it is their responsibility to understand the world of digital. They must gather as much knowledge about the subject as they can, and make use of as many resources as they can to become fluent in digital, so that they can, in turn, become a resource to others on how to best disseminate digital practices inside their organisations.
The best mentality to adopt is a digital first mentality (which I’ll discuss in more detail during the workshop). By default, we should consider that the way we’ll create value will be through digital tools. The point is, if you don’t understand and master digital well, your competitors will.
Don’t get out of touch with your customer: a striking example using car brands
Thus it is managers’ responsibility to educate themselves. What else should managers keep in mind?
Managers need to remember that it’s about more than just about mastering digitisation: it’s about the customers. Your relationship with the customer becomes at risk when you don’t keep up with the (digital) ways they interact with businesses and the world. Digital disruption ultimately means losing your customer.
Let us take laundry detergent, for instance: for many years, laundry product manufacturers have been supplying laundry products that can be used in conjunction with washing machines produced by companies such as Miele, for example. There was a kind of friendly, tacit agreement between these kinds of companies; laundry product producers and washing machine manufacturers could basically focus on producing high volumes of their own products, without worrying too much about the other infringing on their market share. Today, the boundaries and frontier lines are much more blurred: non-competitors can easily become competitors. To continue the example, washing machine manufacturers can decide to completely change the playing field. For example, Miele is now offering machine-as-a-service where you can subscribe to use the machine per washing cycle and Miele will even deliver the washing powder to you on a monthly basis.
Again, here you can see how digitalisation is used to disrupt the way in which value is created, captured and delivered to the customer.
The main question is, can you pilot an ecosystem where you stay in close contact and in a relationship with your customer, or are you merely a component of someone else’s ecosystem that pilots the relationship with the customer? Even in the digital space, the only thing that matters is the customer’s attention. If you’ve got the customer’s attention, only then does the possibility exist that they will spend money on your product or service.
Let me ask you the following questions, and you’ll see what I mean.
Which car do you drive?
I drive a *****
And what’s the brand of your tires?
I have no idea, actually.
And what’s the brand of your windscreen?
Exactly my point. You don’t know your tire and windscreen brands, because your attention is on your car’s brand. And that is because you trust your car brand to select the best components and assemble and supply the best driving solution to you. You as a customer don’t have to worry about these things, and so the component parts (and their related brands) don’t have your attention.
And this is what’s at stake with digitalisation: it’s easier to get in-between your customer and your product and capture customer attention. Once you have the customer’s attention, and they trust you, they will trust you to assemble the best solution for them.
Put differently, digitalisation is yet another acceleration in the fight for consumers’ attention.
Incredible. I didn’t think about digitalisation in this way when I first started reading about it. One almost falls into the trap of becoming so focused on the tools to create value (in this case, digitalisation), that one loses sight of the most fundamental thing, which is still just creating value for your customers
Precisely, that’s why this coming Tuesday’s workshop is so important.
I worked for P&G for several years, and the mission has not changed: it is to deliver the best product to our consumer in the best possible way. [The product itself is not exactly in our hands here - when we speak of digitalisation], but the way the product can be delivered, the way in which we reach out to consumers, the way we capture their attention and manage their satisfaction, this is still the fundamental thing.
Corporates and Startups: Bridging gaps and working together
One of the companies that you founded is The Bridge: The Bridge Europe helps build partnerships between enterprises and startups. What struggles or difficulties do startups and more established companies face when they want to work together? Why are bridges often necessary?
It’s hard to give you a short answer on this.
Fundamentally, bridges are necessary in the areas of culture process, and rewards.
The culture of the employees that choose a management career at an established company, and the culture of entrepreneurs that found startups, are obviously fundamentally different. The manager within a corporate is risk-averse, process-obsessed, and a politically very skilled kind of person, while the entrepreneur working in a startup is looking for adventure/risk, value-obsessed, and isn’t afraid of stepping on toes. It’s really difficult to reconcile these two attitudes.
One of the conclusions we arrived at is that for innovation to take place at larger corporations, is that you have to do it in spaces/places outside of these corporations. It’s often impossible to change an established company’s culture from within; that’s why we encourage them to reach out to startups or entrepreneurs and do projects/experiments together: if things work out, corporates benefit from innovation, while startups get access to the bigger company’s infrastructure or consumers. The aim is to get people to compete in the same team as you, rather than competing against you.
As for processes, as I’ve already briefly mentioned, startups don’t have processus, while companies value processus or RFPs or documentation. Startups certainly have some documentation, but it is much more informal - sometimes as informal as talking to the customer and scribbling on a piece of paper.
As for rewards: For example, if I work at an established company and I did something spectacular, I would get, for example, 50 shares. For startups, things are more extreme. In five years, I could lose everything or I could make millions. And so, one has to find a way to align the risk-reward culture as well.
That’s why startups and established companies need support when they work together. A lot of this support is in the form of managing expectations on both sides. And just to add to this: I’m not saying one model is better than the other one; I’m saying it’s just a case of different people trying to understand each other.
Thank you to Benjamin Beeckmans for granting us this interview!
The interview has been lightly edited for brevity and clarity.
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