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Emerging business models and the impact of digital technology on our society.

Calendar September 13, 2012

Paris, the 11 september 2012

Building a digital civilization

On Friday 13th April 2012, the April in Paris 2012 world digital summit began with an introduction by Thierry Tomasov, the President and CEO of Jouve. He told the audience that “CIGREF & Jouve share the vision that global corporations and institutions are facing a social, mobile and cloud revolution. We are seeing the emerging of notions of digital enterprise and digital cultures within our organizations.”

Jouve and CIGREF “decided to bring decision makers from various horizons together to provoke discussion and debate about the emergence of new business models and the impact of digital technology on our society.”

The first speaker on the morning to engage with this idea, the impact of digital technology on our society, and the development of a new digital civilization, was Claudie Haigneré. Dr Haigneré is a physician, an academic, and was Europe’s first female astronaut, beforebeing appointed as a minister in the French government. She is currently the president of Universcience, a major public organization, charged with fostering and developing the links between the worlds of education and science.

According to Claudie Haigneré, serious structural changes have occurred in the way that we interact with the web – “the internet as we used to know it is over: we can say that we don’t go on the internet anymore, we are in the internet”. New challenges are further complicated by the fact that “there is little overall planning in the development of the Internet. There is rather a myriad of initiatives by individuals or small groups. That means that cooperation and collaboration could be at the heart of the digital civilisation, with a lot of opportunities”. She continued: “like oil in the 20th century, data is the new source of power. And the war to win these new oil fields has just begun.” This begged the question about privacy and access to this new source of power, and Claudie Haigneré asked us to ask “how do we make sure access to the World Wide Web is not access to our own private life?”

Pascal Buffard, the President of CIGREF spoke about the challenges businesses face in adapting themselves to this new world – “the digital transformation of our business means being able to harmonize speed, innovation, and collective efficacy, to conciliate economic performance and the organizational environment, to know how to mobilize the values of commitment, cooperation and trust”. His belief is simple, this is “this is a deep transformation we have to engage (with).”

The impact of digital on organizations and businesses

Jonathan Spector, President and Chief Executive Officer of The Conference Board, is former head of the Wharton School of Business at the University of Pennsylvania, and an expert on the topics of management and leadership. His opinion is that “the nature of leadership is going to change a bit”, in particular “trust, the ability to manage risk, empathy and clarity of intent are just going to become a little bit more important to try to manage in the digital domain”.

Bernard Hours, the Co-Chief Operating Officer and Vice-President of Danone described one of the keys factors in successful organisations, “you need to be horizontal”. This involves decentralization, “adapting the behaviour from the boss of the company, the way he’s connected to his own organisation – so no silos, no walls, no closed doors”. For the multinational food and drink conglomerate there are more changes “new jobs are emerging – chief social officer is a new job – the guy who is in charge of a social network for one brand”.

Jonathan Spector had more to say about this decentralization“it’s going to be a little bit less about power and hierarchy, that’s not going to go away, and a little bit more about the ability to inspire and lead people because we’re going to have a little bit less control over them as customers but particularly as employees.”

Bruno Ménard the CIO of Pharmaceutical giant Sanofi, “we saw what we could call a change of paradigm; basically the innovation of how to use IT was no longer happening in the big organisations, it was happening at home and in the society”.

So what of these structural changes forced by digital evolution, and shifting expectations in both employees and customers? Steve Rosenblum, the founder of Pixmania, one of Europe’s largest a online electronics retailers, believes that there are “two types of companies – creative companies who try to reinvent themselves, and others who just try to cut costs and try to make it work”.

Steve Rosenblum added that “I think that this is the way that commerce or retail will evolve, and I don’t see the big retailers being able to do it from where they are now. So I think the e-commerce company will be able not to be pure players, but to be retailers, but with a new format, new standards, new ways of customer experiences and so on”. Steve Rosenblum, is head of a huge online business, but still aware that in France, “80% of the market is still in shops, and they will not be able to lower the price”. The answer for might be for retailers to make it “a social place, where everybody is succeeding for the moment”.

Ralf Buchi, president of the international division of German publishing company Axel Springer explained how defining a growth strategy to deal with technological change is key – “the biggest part of our digital growth happened by acquisition: if you have to target to reach 50% of your revenues with digital, and that’s our clear target in the coming years, then you have to do the biggest part of it by inorganic growth, and that means acquisition”. He had more advice for leaders out to buy in and integrate solutions is that“the main factor to bring it to real success is that you should only do these kind of acquisitions if you are convinced that as a company you are able to add further value to the target that you just acquired”.

In an open world, be credible and transparent!

Jean-François Phelizon, Senior Vice President of the Saint Gobain construction and materials specialist “the difference probably is that now the border between what is inside a company and outside a company has changed”and this is of obvious significance for a company that was founded in 1665.

Simon Schneider of crowsourcing specialists InnoCentive described some of the sweeping changes being brought by “social networks have organised, they are in communities, they are taking control”. Social networks are here to stay, and they mean business “they’re building huge companies; they’re taking over old companies”.

For Bernard Hours this is natural – “the world of digital is a little bit like that – you have an acceleration, you cannot control everything”, and the solution is “to leave countries and different businesses the opportunities, the ability to test, to fail, to learn, and after that to expand what is working”.

Ben Verwaayen, the CEO of Alcatel Lucent, added that companies face not only the problems of rapid change and stiff competition, but also regulatory issues -“the problem with legislation or regulation is that it’s always looking backwards, it’s not looking forwards. You cannot regulate or legislate what’s not yet there. Innovation is always looking forward, so there’s always a natural tendency that what you have to regulate is a reflection of the past”.

Janis Karklins offered another point of view, as Assistant Director-General for Communication and Information of UNESCO,“I think that the philosophy of the Internet which is that there is no central point of command, but that intelligence is place on the margins is the driving force of innovation, and we cannot predict what will happen next because the potential is so huge that nobody really knows and nobody sees anything coming – it may pop up today without anybody thinking that it would have happened at all”.

Simon Schneider then told the audience to“engage the crowd in small steps, but be open and transparent” his advice was “do not think that you can get away with ‘mini’ open innovation or half open innovation – it needs to be open all the way”.

Andrew Savikas of Safari Books Online told guests that “we live in a world where you don’t need to ask permission to speak out loud to a very wide audience”. As he explained,“the word publish, at least in the original English, meant to say out loud in public, that was how you published legislation or you published the new rules for your community”. These new community rules are constantly shifting, as Pierre Hanotaux noted. The Chief Operating Officer of AEF,the parent of organization of international news network France 24 explained the challenges of speed and change that his organisation faces -“in the digital world we want everything to go fast, but there’s also a risk involved, and there’s a credibility issue involved, and in the media if you’re not credible, it won’t work”

Mobile/social – harnessing the creative power of the crowd ?

Ben Verwaayen    “first of all I think it also defines a little bit us agewise, that we still continue to talk about social media because apparently we think it’s a separate category from other media, well think again – for the real users, young people, the word ‘social media’ doesn’t exist, media maybe exists – it is the natural way of doing things”. For the Alcatel Lucent boss, the problem is generational “putting it into a different category is unfortunately giving much more away about our age than you may want to do”.

Bernard Hours believes that“the potential of any human being today is just proportionate to the number of people he is connected to”, and this question of connectivity, and the associated problems was developed by a number of speakers.

Janis Karklins referred to the 2005 World Summit on the Information Society, noting that “at the time we were speaking about 1 billion mobile phone users, today we’re speaking about 6 billion”. The result of these changes is“that the international debate gradually is shifting from discussions about access and infrastructure to the discussion about the actual use or misuse of the Internet”.

Tao Shi, Vice-President of Chinese online retailer 360Buy.com provided interesting statistics on the Asian market, nothing that “today China has over 700 million users, probably 40% of them are smartphone users”.

For Ralf Buchi at Axel Springer “the development of the mobile digital devices is a huge opportunity for us; it’s a huge opportunity because clients and the consumer are used to paying – you pay for a phone call you pay for an SMS, you pay for a ringtone, so it’s much easier to ask for paid content, and that’s what we are doing”. Pascal Buffard saw the application for the insurance business too – “mobile usage and social networks are a very good opportunity for us to be able to manage closer relationships with segments of communities; so we are now working on social CRM in order to build communities around not only insurance, but communities of interest”.

Terry Waters of the Yankee Group provided astute analysis of the processes at play -“for the first time technology has become personalized, our devices know us – they know who we are, where we are, what we like, and who we know”.

Even the ‘old lady’ of France the SNCF national railway company is getting on board with mobile solutions. Bernard Emsellem, Vice President Corporate Social Responsibility told the audience how SNCF is “launching the possibility to gather all our data for the Parisian region so that other external companies may create applications and software that will be of use for end-users”. According to Terry Waters “mobility is more than just wireless, mobility allows for the seamless fluid access to any content, application or services from any device, by anyone, from anywhere at any time”.

Bernard Hours explained that“we now have social brands – brands are like a person, on the internet a brand is a person. It’s not only a relationship with a product, it’s something which is offering services, which connects with people, which answers questions”.

This expansion and change is hitting print products too. Eileen Gittins, founder of the Blurb self-publishing giant, thinks that“books are becoming conversations, not just speeches”, involving the crowd in debates about the content, and even forming the content itself.

As Jonathan Spector noted,“the crowd is always going to form with or without you; it’s not your choice, it’s not our choice as business leaders, the crowd will form, and the question is whether we choose to work with them”.

Nonetheless, Jean-François Phelizon sounded a note of warning, “sometimes, if we just follow the consensus, the consensus of a crowd or a group of people, we can lose originality, we can lose the fact that a good idea has been hidden by the fact that everybody’s thinking the same”. We must be conscious that the loudest opinions are not always the best.

In an evolving market, choose to add value’ was the consensus expressed in a whole range of ideas explored at April in Paris 2012 !

Bernard Hours summed up the challenges of the new media age very well -“the internet is not only communication, it’s communication plus transaction, which means that at any moment, you sell, everywhere all the time, and this totally changes the way we behave”

Tao Shi added that the challenges, are harsh -“first you have to react rightly to the customer’s demand – the customers really want to have the best services, and the best selection and the best price, so you have to do it right with all three directions, not just the one”.

Despite challenges by new media the traditional content industry is still a behemoth. According to Len Vlahos of the Book Industry Study Group, the publishing industry is now worth $ 28 billion, and“in terms of units, we’re about 2 and a half billion units”.

Despite the recession, “ebooks have simply exploded – the explosion really began in 2010 and carried on into the first two quarters of 2011”. Eileen Gittins also talked about adding value to print and digital products. She believes that“inside of every 21st century book should be a book group”.

Jonathan Spector believes this question of value is key:“going forward, the first question is ‘what do customers really value?’ and ‘what will they pay for?’, and I think they will pay for things that they really value”.

Eileen Gittins spoke about this experience of assessing value, and her hands-on tests outside of bookstores to understand customer expectations -“we said to people, ‘okay how much would you pay for this book?’, and the answer ranged from ‘nothing, I don’t like it’ to a lot of money, and we said ‘how much would you pay for that book if it was your own book?’, and the answer ranged from a surprising amount of money to ‘it’s priceless – I’d pay anything for that’.” Blurb found that personalisation was the key to their business model.

Claudie Haigneré accepted these new changes, but called for new educational systems to deal with them “we need to develop learning, teaching and training, not only with digital tools and in digital environments. We need to develop them through human relations and interactions as well. Digital natives are digitally clever but they lack wisdom.”Dr Haigneré concluded her speech by telling the audience that perhaps“instead of asking ourselves what Earth we want to leave for our children… we’d better start asking ourselves what children we want to leave on our Earth.”
Highlights of the 2012 edition: April in Paris 2012   

The next  world  digital summit will be held on Thursday, April 11, 2013 in Paris.

Press Contact Groupe JOUVEChristèle Blay
Corporate Communication Manager – Tel. 00.33.1 44 76 54 43

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