Our world has changed, probably for good. Until now, the shift from brick-and-mortar to the smartphone has been about service, cost, and convenience. Now, it's also a matter of public health. How do we win this uncertain new game? How do we prosper in a digital world?
In a cool, readable style Harnessing Digital Disruption: How Companies Win with Design Thinking, Agile, and Lean Startup tells the story of a major multi-national organization facing digital disruption and looming irrelevance. In a compelling novel format, the book demonstrates how to harness the power of digital technology, methods and thinking on the path to revival and prosperity. It illustrates the situations, characters, and blockers you'll likely face as you progress through your journey.
The setting is Singapore and the heady world of international banking, but the prescription, methods and lessons apply equally to manufacturers, utilities, hospitals, insurers, and government agencies. You will learn how to:
· Develop your Digital Transformation strategy and Innovation Portfolio · Reform customer journeys, launch new digital offerings, and validate new beta businesses · Develop senior leader digital literacy, and understanding of growth leadership · De-risk your journey using a proven overall approach based on proven principles · Cultivate a network of pragmatic entrepreneurs practicing a structured scalable innovation process
Amy Tay sits down opposite Martin Picard. âThis is one of my favorite places,â she says, taking in the panorama. They order lunch and exchange pleasantries.
âWhy did we lose your business, Amy?â Martin asks. âWeâve worked with your family for half a century.â
Amy takes a breath. âAsia Pacific Bank (APB) is slow, unreliable and expensive.â
Martin looks out across the Central Business District (CBD) and the iconic Marina Bay Sands building. The Strait of Malacca is busy, as usual, with ships pouring in from both the Andaman and South China seas. He has a good relationship with Amy and her father, Kwong Yip, who is now semi-retired. Thatâs why sheâs here, he realizes, and being so blunt. Sheâs trying to help.
Martin remembers when their clothing design and retail business, KY Tay International, was just a few stores. Now itâs an East Asian power-house, a regional dynamo, with hundreds of stores and a striking on-line presence. A dream client for APBâs Corporate banking division.
âIt pains me to hear that, Amy. It would really help if you can be specific.â
âOn the commercial side,â Amy replies, âgetting paid, and paying our suppliers and employees was often a hassle. There were always overpayments, underpayments, and missed payments. On the wealth management side, your advisors were slow, disorganized and expensive. Sometimes, I felt like I was educating them. On the personal side, you even lost my daughterâs tuition money a few months ago. She was crying and worried she might lose her place at Oxford. It took several days to fix the problem and you still wanted to charge me!â
Martin has only been CEO for a few months. Profitability is declining, costs are rising, and Martin is counting on growth to solve his problems. Now Amy Tay is saying that three of his core businesses â Commercial Banking, Wealth Management and Retail Banking â are lousy. Have I accepted a poisoned chalice, he wonders?
âI donât mean to be disrespectful,â Amy continues. âYou know how important relationships are to our family. But we have other alternatives now, and your service issnât getting any better.â
âWhat kind of alternatives?â Picard asks.
Amy holds up her smartphone. âLook Martin, digital methods help me manage design, sourcing, inventory, sales, and warehousing. Weâre hoping digital can also help manage our complex logistics and Trade Finance. You know what our bottleneck is? Asia Pacific Bank â working with you is like going back in time. Forgive me for speaking severely.â
Picard listens quietly, Amyâs words reverberating: slow, unreliable, and expensiveâŠ
âAmy,â he says finally, âwhat do we have to do to get better?â
âYou have to wake up, Martin.â
Martin lingered after Amy Tay left. He looked out again toward the Port of Singapore, one of the worldâs biggest and most successful. Youâd think theyâd stand pat, thought Martin. But the Republic was betting big on unseen long-term trends. The massive TUAS port expansion project to the west would triple the portâs size. And it would be a âSmartâ port, with digital technology, sensors, automated cranes, driverless vehicles, drones to inspect equipment, and a smart grid. The executive team was committed to seamless and efficient port clearance. âWe want to cut turnaround times in half,â the portâs Chief Operating Officer had told him. âNobody wants to wait.â
But Asia Pacific Bank clients have to wait for everything, thought Martin. They wait for accounts to open, payments to clear, loans to be approved, and for APB to fix the many transaction errors. Delay, errors and hassle, thatâs us, thought Martin. Can we learn to apply technology the way the Port of Singapore â or Amyâs company does, he wondered? Can we become a digital bank? And is Technology alone the answer? A respected colleague told him transformation was fundamentally about culture.
Martin was a business guy, primarily interested in strategy, budgets and technology, and less so in the âsoft stuffâ like culture. He was well aware of the so-called Fintech disruption, but had believed the threat was overblown [See Figure 1.1]. We have trust, Martin had told himself, and in banking thatâs the most important thing. Our retail customers, business clients and regulators trust us with money and information. We also have scale, resources, a banking license and matchless marketing muscle. How can the Fintechs compete with that? On the other hand, Fintechs, not banks, seem to be doing most of the hiring.
And now here is Amy Tay, he thought, telling us weâre dinosaurs. Have I been a bozo? If this is how Amy feels, what chance do we have with her children and the next generation of entrepreneurs?
Revenue was flat, cost was rising, and Cost-to-Income ratio2 continued to worsen, which meant that investors didnât like what they saw either. Martin was feeling old and tired, but he had never lacked courage. Maybe we can turn this threat into an opportunity, he thought. Maybe APB can learn from Fintechs and technology firms in general, and thereby improve our capability, operations and current offering. And thatâs when he decided to call Yumi Saito.
2 The cost-to-income ratio is a key financial measure in valuing banks. To get the ratio, divide the operating costs (administrative and fixed costs, such as salaries and property expenses, but not bad debts that have been written off) by operating income. The ratio gives investors a clear view of how efficiently the firm is being run â the lower it is, the more profitable the bank will be.
For both corporate clients and individual customers, the best Fintechs offer services and products that are cheaper, faster, more convenient, and more transparent than those of traditional financial institutions. Theyâre compelling banks, insurers, and Financial Services regulators around the world to revisit their overall approach and activities.
âHello Yumi-san, itâs Martin,â he said. âLong time no see⊠Listen, I want you to come back to Asia Pacific Bank!â
After a moment, Martin heard a familiar laugh roll out of his cell phone. âMartin Picard, subtle as always! I heard about your promotion: CEO of Asia Pacific Bank â congratulations!â
âThanks, Yumi. But Iâm serious, we need you back. Iâm not so sure about this place anymore.â
âYou havenât changed at all, Martin-san. How are Monique and the kids?â
âThe family is great. The boys are finishing high school, and Monique is back at work. Life is good. Business-wise, weâre in trouble, Yumi-san. I feel a typhoon coming. Iâm afraid itâs going to be worse than the Global Financial Crisis.â
Martin told Yumi what Amy Tay had said, what losing a key client like KY Tay international meant for APB and all that heâd learned since becoming CEO. âI want you to help me transform our business, Yumi. I want to learn and apply the latest and greatest technologies. I want to learn from Fintechs and technology firms in general, and maybe even partner with them. I want to change our culture. I intend to create a new senior position for you and to give you all the resources you need.â
Martin Picard had spent his first three months as CEO talking to clients, employees, suppliers, and partners of Asia Pacific Bankâs core businesses: Retail Banking, Commercial Banking, and Wealth Management. He met with APB leaders at all levels and with front-line employees. He talked to regulators, competitors and pundits. He read books, watched videos, and attended lectures.
Fintechs were sprouting up all over Singapore and the Asia Pacific region. They seemed to be full of creative, motivated young people doing interesting things. Their mantras seemed to resonate with people. âThink big, start small, scale fastâ and âBuild products your customer wantsâ.
Martinâs feelings were mixed. Fintechs were direct competitors with cutting edge technology and few regulatory constraints. There were worrisome presentations on Fintechâs potential effect on APBâs business [See Figure 1.2]. As Jamie Dimon put it: âHundreds of startups with a lot of brains and money are working on various alternatives to traditional banking. They all want to eat our lunch. Every single one of them is going to try.â3[See Figure 1.3]
3 JP Morgan CEO, in JPMC 2014 Letter to Shareholders/.
On the other hand, thought Martin, maybe we can learn from Fintechs â not just their technology, but also how they work. Maybe they can help us reassess our offering, channels and how we work.
To Martinâs chagrin, few established Fintechs had any interest in...
Table des matiĂšres
Normes de citation pour Harnessing Digital Disruption
APA 6 Citation
Dennis, P., & Simon, L. (2020). Harnessing Digital Disruption (1st ed.). Taylor and Francis. Retrieved from https://www.perlego.com/book/2039296/harnessing-digital-disruption-how-companies-win-with-design-thinking-agile-and-lean-startup-pdf (Original work published 2020)
Chicago Citation
Dennis, Pascal, and Laurent Simon. (2020) 2020. Harnessing Digital Disruption. 1st ed. Taylor and Francis. https://www.perlego.com/book/2039296/harnessing-digital-disruption-how-companies-win-with-design-thinking-agile-and-lean-startup-pdf.
Harvard Citation
Dennis, P. and Simon, L. (2020) Harnessing Digital Disruption. 1st edn. Taylor and Francis. Available at: https://www.perlego.com/book/2039296/harnessing-digital-disruption-how-companies-win-with-design-thinking-agile-and-lean-startup-pdf (Accessed: 15 October 2022).
MLA 7 Citation
Dennis, Pascal, and Laurent Simon. Harnessing Digital Disruption. 1st ed. Taylor and Francis, 2020. Web. 15 Oct. 2022.