Every Company is a Software Company: Re-Imagining Your Business and its Environment in the Digital Era

Alessandro Vigilante,
Head of Global Innovation Ecosystem,
Fidelity Investments

 

 

SESSION ABSTRACT

Corporate strategy has evolved from being focused on profit maximization to an innovation risk management function. Simultaneously, digital-native startups have perfected growth, scale-up and innovation management. Scouting for disruptive innovative companies, and matching the right opportunities with the corporate’s needs, have become core drivers of corporate growth. This session unpacked how organizations can successfully leverage digital disruption and technology to remain competitive in an ever-changing market.

KEY TAKE-AWAYS

• Framework for working with multiple participants of the external innovation ecosystem
• Best practices in maximizing internal relevance of your external scanning efforts
• Short-circuiting external opportunities with internal needs and maximizing action

INTRODUCTION

Alessandro Vigilante expressed his desire to share what he’s done, including what he’s done wrong, and what he has learned from it. He opened with the observation that traditional corporate strategy revolves around maximizing assets. But there are ways to enlarge this strategy, including leveraging adjacent digital business areas, and targeting incremental markets. He noted that the probability of failure moves from low to high as you become more ambitious. To succeed, you must manage the right portfolio of ideas in all assets with specific leadership.

TAKE-AWAYS

Alessandro’s central message revolved around framing your business to accommodate digital disruption and the many new technologies in today’s marketplace. He broke this idea into three key ways to formulate a new business plan:

1. Look at your core business. Alessandro urged companies to take a path of maintaining, defending and extending their core business. For this, you need superior execution.
2. Build and nurture adjacent business, i.e. emerging assets. For this, you need people who can lead and start things.
3. Finally, look for options for creating and transforming your business. For this, you need visionaries!

Three Key Horizons in Business

Alessandro also articulated three horizons in business:
Horizon 1: The core, which includes experience, leaders, and metrics like profits, ROI and cash flow.
Horizon 2: Encompasses the idea of positional advantage. Here, you must determine revenue and if you even have customers. This horizon involves business builders and lots of planning.
Horizon 3: This horizon concerns the idea of privileged position and requires milestone-based metrics and leaders, champions…even visionaries. These are people who nudge the business and the innovation forward.

Managing the Idea Portfolio

When incorporating innovation, it’s crucial to have all horizons covered. You need to manage the right portfolio of ideas. In order to source these ideas, you need to pull from two areas: external and internal. It’s important to have a number of external participants and to maximize efficiency and effort when dealing with both external and internal groups. Examples of external participants would be universities and other IP development organizations, entrepreneurs, the founders, your network, etc. It cannot be overstated how much your business needs ideas and talent. That’s because once you’ve birthed an idea or pathway, you need to avail yourself of part two of the process – education.

Education involves incubators, accelerators, angel investors, events and media companies. After this part of the process, companies must consider part three — graduation. Graduation involves smart investors, venture capitalists, strategy and business development leaders and law firms.

Integrating Ideas

After the sourcing process (finding disruptive businesses and ideas) it then becomes an issue of integration. This is when you sit down and rank your ideas. After that, you test the ideas well enough so that you can make corporate understand why it’s worth pursuing. You’ve got to prove desirability, viability, and feasibility.

Accelerating

After all of these processes have been achieved, it’s time for you to accelerate. This means determining what functions are needed and getting the right people to make this happen. After you’ve assembled the right team, you must incorporate a strategy of engaging people high up regularly, but not too frequently. You must isolate people in the core business, because if they aren’t on board with your idea they’ll bring the whole endeavor down. At the end of the day, the critical driver for success is finding the right people. And, yes, there are metrics for this.

ACTION ITEM

• Companies must deploy a strategic plan to incorporate innovation-seeking into their mandate as well as integrate new partners and start-ups into the company landscape
• Add adjacent assets and put the right people into place so they can excel. It’s vital that the company answer the question of how much they want to change the status quo

IMPLEMENTATION GUIDELINES

1. Maintain, defend and extend core business
2. Build and nurture emerging business assets
3. Create options for transformational business

FINAL THOUGHT

In today’s digital world, it’s critical that companies embrace innovation and disruption. In order to be effective, companies must first put in place a framework to find and nurture adjacent assets and fold them into the company.