#dighbs

[harvardbusinessschool]

Harvard Business School Digital Initiative

The Digital Initiative builds community and expertise around the digital transformation of the economy at Harvard Business School and beyond through curated content, facilitated exchange, and thought leadership.

What will the future of retail look like? 

[andrewdubowec]

My digital transformation

I’m feeling nostalgic.  Not surprisingly.

This is my last week at Harvard Business School.  I literally just walked out of my second last class.  Ever.  And I as I sit in the Harvard Innovation Lab, with my cursor blinking, I’m searching seemingly endlessly for a topic to write about in my last #digHBS blog post.

No matter how hard I try, I keep coming back to my nostalgia.  Instead of writing about the latest tech headline, I'm going to write about my experience at HBS.  Well, at least one dimension of my experience.

To step back, #digHBS taught me one lesson this semester: no one is safe from the digital revolution.

That’s the reality we’re staring in the face as we leave HBS for the 21st century economy.  As leaders, managers and entrepreneurs, we’ll have to deal with changing tides.  We’ll have to deal with “software eating the world”.  We’ll be (at one point or another) the disruptor and the disrupted.

This got me thinking: what was my “digital transformation”?

I had come here, nearly two years ago, as a "strategy consultant" turned “digital initiate”.  I had been on both sides of the coin: helping incumbents embrace a brave new digital world and building products to transform the old guard.  Though not an engineer by training, I felt like an engineer at heart.  And I was certain in my goal at HBS: to dive deeper into technology and entrepreneurship.

To say I was surprised would be an understatement.

I stumbled across a student body inspired by technology, passionate about what was (now) possible.  I was exposed to entrepreneurs, venture capitalists and technology leaders like no other place I had been.  And I dove in head first: trying to start two companies in RC year, failing both times, and getting “back in the startup saddle” in EC year… failing again.

If I was ever in doubt whether HBS was the “right” place for entrepreneurs, I had long forgotten.  This is a magical place for entrepreneurs and technologists alike.  There’s no question the experience will exponentially increase my probability of success when I take the plunge back into entrepreneurship.  Even though that dream is on pause (for now).

It was EC year, in particular, that added rocket fuel to my “digital transformation”.  The curriculum was the proverbial the nail in the coffin: a mix of hands-on experience, practical seminars like PM 102 and high-level strategy classes like #digHBS.  I now leave HBS a full-fledged “digital mercenary”.

But I must admit: HBS is not, by any means, done its own digital transformation.

The “business” world we live in today demands far different skills from the world 10, 20 or 30 years ago.  I’d argue that HBS’s curriculum today is still heavily skewed toward “how to think” and not “how to do”.  The latter is what companies, big and small, need more of today.  I don’t think it would be putting it lightly to say that “strategic frameworks” are a commodity, while understanding MySQL, Google AdWords and the technology stack are pure gold.

Though there is still a long way to go, HBS seems on the right track.  With the Digital Initiative, Rock Center, FIELD 3 and HBX, the school is positioning itself for another century at the forefront of business education.  No doubt, it will be a fascinating “transformation” to watch.

Now, what’s your “digital transformation” story?

[andrewdubowec]

Industries are dead. Think like a designer.

Marc Andreessen famously said “software is eating the world”.

I’ll go one step further.  The entire construct we’ve used to understand industries is dead.

For the last 30 years, business strategy has centered on “industry analysis” characterized by Michael Porter’s “Five Forces”.  This analysis was predicated on first pre- defining an industry, like car manufacturing or consumer electronics, and then a comprehensive review of each force: buyer power, supplier power, substitutes, barriers to entry and rivalry.  The end result: the relative attractiveness of an industry and an implied set of strategic choices facing competing firms.

Not only was this thinking pervasive within Fortune 500 companies, it remains the core foundation of Harvard Business School’s strategy curriculum.  It’s the anchor framework taught to the next wave of business leaders here and across the globe.

This is fundamentally flawed.  If not blatantly wrong.

The “Five Forces” effectively presumes that industries are insulated and static, that each industry is mutually exclusive from the other.  It could be argued that “substitutes” and “barriers to entry” seek to address this problem, opening managers’ eyes to impending disruption.  But the flaw seems to be in the myopic view of what an “industry” is in the first place.

The reality for today’s business leaders is that there is no such thing as an “industry”.  Digitization, software and the information age have completely blurred (and broken down) the lines across industries.  This convergence, as Mark Andreessen alludes to, will only accelerate as the boundaries of competition are redrawn by tech giants and entrepreneurs alike.

You can see this playing out (rapidly) today.  Honeywell never thought it would compete with Google.  I bet neither did the world’s largest car manufacturers.  It’s a seismic shift in the structure of global commerce that (not surprisingly) is catching incumbents asleep at the wheel.

So, this begs the question: how should we think about industries in today’s digital economy?

My opinion: like a designer.

Reverse top-down, industry-level analysis toward bottom-up, customer-driven thinking.  Instead of seeing “industries” and “markets” see “problems” and “customers”.  This seemingly subtle reframing is actually a drastic, profound change.  It requires us to throw aside the intuition about strategy and competition we’ve been trained in.  It requires new definitions of “what business” we’re in.

Five years ago had you asked Bose what business they were in: they would’ve said “manufacturing speaker systems”.  But an upstart in Santa Barbara, led by John MacFarlane, reframed the problem: “people want to fill their homes with music”.  It led to a solution that combined world-class acoustics with proprietary networking and software technologies.  That company is now called Sonos.

For designers (and entrepreneurs), this line of thinking is more natural.  We identify a problem.  Hack together a solution.  And experiment.  It’s the underlying mindset that Fortune 500s struggle to replicate.

But it can be done.  It “just” requires the courage to disrupt yourself.

Curt Nonomaque, CEO of VHA, the largest healthcare GPO, challenged his company (in 2011) to reimagine its business before Amazon or Google did.  It led a small team (that I was part of) to reinvent the healthcare supply chain entirely online.  Today that platform, aptitude, combines elements of online marketplaces and big data analytics not seen before in often “tech resistant” healthcare.

It’s one of only a handful of stories of incumbents leading the charge into uncharted “digital” territory.  Though it underscores a simple message:

Industries are dead.  Think like a designer.