Friday, April 24, 2015


The biggest change I've found in the United States since returning from six years in China is the digital transformation of everything. I find often that internet transactions are uncoordinated and data entry is tedious and repetitive. It feels like we are in the Model-T era of digital  - it works with a hand crank and the pedals stick. But then, in the middle of a Chicago snowstorm with no taxis in sight, I call Uber. A car arrives in 3 minutes. It's miraculous.

Digital leadership is powerful:  With Uber achieving a market value of $41 billion, joining Airbnb, Alibaba, and 71 other companies in the billion dollar start-up club, companies are asking what is driving these valuations and how can they benefit from these new digital and network based business models? Odgers Berndtson has a great track record in this area. We placed many digital leaders for financial services, technology and health care companies. Last week we sponsored Barry Libert, Digital Expert, CEO of OpenMatters and Senior Fellow at The Wharton School at a lunch in New York to talk about digital leadership.

Companies ranked by Price/Revenues Ratio
Companies with leaders who understand the digital marketplace have higher market valuations and stock performance. Business leaders at manufacturing companies will need a combination of inventive thinking, collaborative actions and technical fluency to see the way forward and allow the industrial internet to reach its full potential according to Barry. 

“Network Orchestrators” Beating the BandLibert divides companies into four business models: Asset Builders, Service Providers, Technology Creators and Network Orchestrators. Over the last 40 years, Network Orchestrators have gained ascendency in market valuation and stock performance over Asset Builders and Service Providers.

Network Orchestrators build value by delivering outcomes to customers, not on delivering products and services. A key to their success is collaborating across business partners. Uber, Zappos and Airbnb are examples of companies which deliver value to customers by "orchestrating" collaboration across suppliers, often at negligible marginal cost.
"Anyone Can Do Anything":  Digital transformation will require business leaders to shift from a focus on products and services to business outcomes. But what does that mean for an industrial company? B-to-B companies have a greater challenge choosing which kind of investment will allow them to take the best advantage of the "internet of things."  Network Orchestrators "presume people will do the right thing," Libert said, "because anyone can do anything." To drive profit and value, industrial leaders will need to create a culture that embraces experimentation, learning and collaboration while exercising good judgment.

Are you grappling with digital strategy in your organization? Leading edge industrial companies like yours use technology and innovation to meet customer needs globally. Odgers Berndtson has a lot of experience helping companies find great digital leaders to help them drive growth, revenues, profit and value. 

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