Nick Coutts Monday 26 November 2012 Veolia Imperial Pathfinder (VIP) Programme

Nick CouttsMonday 26 November 2012

Nick CouttsMonday 26 November 2012

Veolia Imperial Pathfinder (VIP) ProgrammeVeolia Imperial Pathfinder (VIP) Programme

• Visiting lecturer: systemics and systems design, business and computing, design engineering

• Innovation and incubation• Incubator senior coach, InnovationRCA

• Chair of enterprise committee of Projectics: http://projectics.estia.fr/

• Author: IP valuation - Routledge• MA economics, Cambridge• Entrepreneur

• Waratek• gleXnet• Smartology• Repindex

• IBM Vice President Global Distribution Channel Strategy

Who am I? Who am I?

What’s going on?What’s going on?

Switching costs are falling Switching costs are falling

Everything changes!

What does this mean?What does this mean?

producer customer

supply demand

build to forecast build to order

targets goals

remote from customer close to customer

cost value

command and control context

hierarchical horizontal

fear trust

command dialogue

hard soft

male female

internal external

design, make, ship clock rate

local global

opportunity sustainability

complicated complex

linear non-linear

inflexible agile

functions attributes

inertia momentum

chain network

efficiency effectiveness

producer efficient supply chain

customer effective demand network

transaction business process

business process people

cost

tangiblelinear

value

intangiblecurved

cost

allowed by IA38

value

not allowed by IA38

Push to PullPush to Pull

Continuing wave of change

Progressive digitisation

shifts business models from push efficiency to pull effectiveness and adaptability

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PUSH

Manufacturer Analogue channels

Distributor ResellerCreator Producer

Structure of physical businessStructure of physical business

Producers ‘own’ knowledge in this physical world Producers ‘own’ knowledge in this physical world

MACROMEDIANETWORK

KNOWLEDGENETWORK

UniversitiesBig technology research

Peer organisationCompetitors

MACROMEDIANETWORK

Digital gives the customer their own networkDigital gives the customer their own network

UniversitiesBig technology research

Peer organisationCompetitors

UniversitiesBig technology research

Peer organisationCompetitors

PostersCommentators

AggregatorsCurators

Re-constructorsKNOWLEDGENETWORK

MICROMEDIANETWORK

and access to the knowledge

network

and access to the knowledge

network

Digital channels

PULL

Exchange(vendormarket)

Consumer technical Interface

Creator technical interface

The changes generate digital business modelsThe changes generate digital business models

The end gameThe end game

Digital channels

Consumer technical interface

Exchange(vendormarket)

Creator technical interface

PULLThe customer is the creator and

vice-versa

EcosystemsEcosystems

Network diagram

The business ecosystem is the system of systems that compose the whole market and its interactions

i.e the business system + all the interacting systems that create the exogenous variables which interact with it

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VendorProductsServicesSupport

Customerssegments

Serviceprovider

Distributor

RetailerWeb site

Field sales

Contact centre

InfluencersMedia

AnalystsUser groups

Upstream networks

Downstream networks

Complementary assets

Network effectsNetwork effects

The exponential increase in value obtained by adding nodes to a network

The network effects of social media

– Increase in value for users– Overall increase in power users have in respect of

other interacting networks and businesses

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Uservalue

User value with no network effect

User value with network effect

Number of users

Tipping point

How the number of users affect valueHow the number of users affect value

Multiple network membershipMultiple network membership

Membership dynamics •Almost all are exposed to the major media - macromedia•Most participate in some degree in social media networks -- micromedia•Some belong to one or more of the different sub-networks

– that make up the knowledge network•And there are many other networks that impact expectation and behaviour•In all cases, network members:

– play network roles– enact the tension between belonging (adaptation) and

individuation (differentiation)

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Membership dynamicsMembership dynamics

In all networks, members play network roles– They interact in part according the roles they are

playing• Multiplayer games exhibit the role-play most clearly• Members play different roles in different sub-groups

– Sub-groups (tribes) are important elements of networks

• They obey the Dunbar number– Optimum size is 10-15 – Groups always sub-divide as they approach 50

– In social media, interaction is strongly influenced by the the tension between belonging (adaptation) and individuation (differentiation)

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Customer powerCustomer power

Increasing power of the customer from increasing control:

Capacity for self-creationIncreasing ability to customise or modifyControl of when, where and howExtensive choice and pricing power

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POWER

Motivation to exercise powerMotivation to exercise power

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nicholascoutts@dsl.pipex.com www.nicholascoutts.co.uk 44 77 24 398 675

skype ncoutts