Managing Innovation in Digital Disruption...
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Reform Leadership Training 2018 Managing Innovation in Digital Disruption Era Jakarta, 06 October 2018 By Indra Utoyo Managing Director of Information Technology & Operation Bank BRI
Transcript of Managing Innovation in Digital Disruption...
Reform Leadership Training 2018Managing Innovation in Digital Disruption Era
Jakarta, 06 October 2018
By Indra UtoyoManaging Director of Information Technology & Operation Bank BRI
Direktur TI & OperasiBank Rakyat Indonesia
Direktur Digital & Strategic Portfolio (2012-2017)Direktur IT Solution & Supply (2007-2012)
Telkom Group
OrganisasiMasyarakat Industri Kreatif TIK (MIKTI)Dewan Pengawas
Tokoh Inovasi BUMN Kementrian BUMN (2017)
Awards
CIO’s ‘Executive Dream Team’ Fortune Magazine (2011)
Asosiasi Bulutangkis Seluruh IndonesiaStaf Ahli
Wantiknas (Dewan TIK Nasional)Anggota
The 1st Best CIO SWA Magazine (2010)
Indra Utoyo
Bank Rakyat Indonesia (BBRI)State owned bank, publicly listed in IDX
Market Cap As of July 2018
$ 25.48 Billion#No 4 in Southeast Asia
Assets As of Dec 2017
$ 83.01 BillionNet Profit As of Dec 2017
$ 2.14 Billion
Financial Highlight :
Total Number of Customers: 75.7 Mio
1. Digital ‘Disruption’ Phenomenon
2. Digital Transformation Broad Trend
3. Visioning & Transformation in BRI
4. Managing Change
Table of Contents
We are now living in 21st Century…..The “Creative and Conceptual” Age
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Change in Digital Era :Change no longer Linear…but Exponential…
Source : Roland Berger Strategy Consultant, 2014 6
Media Services Education Finance Health Energy Government
Information Intensity High High High High High High High
Gatekeeper Cost High High High High High High High
Fragmentation High High High High High Medium Low
Information Asymmetry High High High High High Medium Medium
Spare Capacity High High High Medium Medium Medium Low
Regulation Low Medium Medium High High High High
Failure Costs Low Medium Medium High High High High
Asset Intensity Low Low Medium Medium High High Medium
Disruption Potential High High High Medium Medium Low Low
Disruption Prediction By Industry
Source: Geoffrey G. Parker, MIT Sloan, 2016
Digitization, Mobilization, Augmentation,Cognification, Disintermediation, Automation
Source : adopted PWC
Megashifts in the Industry Revolution 4.0
Digital Technology Transformation Key Drivers
Source: Ambit software, 2016
Table of Contents
1. Digital ‘Disruption’ Phenomenon
2. Digital Transformation Broad Trend
3. Visioning & Transformation in BRI
4. Managing Change
Why Digital Transformation?
“The digital revolution is far more significant than the invention of writing or even of printing”
(Douglas Engelbart – early mouse computer inventor)
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“The digital transformation is not about technology is about redefining your value proposition”
(Jeanne Ross - MIT)
5 Domain dalam Transformasi Digital
Source: David Rogers, The Digital Transformation Playbook
CUSTOMERS
From Passive Target... …to Customer Network
COMPETITION
VALUE
From Defending… …to Adapting
From Top Down Planning … …to Experimentation
INNOVATION
DATA
From Silos … …to Strategic Asset
From Product … …to Platform
Customers: From Passive Target…To Customer Network
Mass Market Model Customer Network Model
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Brand Valuation
> Rp. 30T
> Rp. 20T
Rp. 12,3T
Rp. 9,8T
Source : Yahoo Finance, reports
Competition: From Product…to Platform
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Hospitality Brand Valuation
Hilton $27.84 billion
Marriott $22.98 billion
Airbnb $20 billion
Starwood $13.79 billion
Wyndham $11.03 billion
Accor $10.82 billion
InterContinental $10.54 billion
Hyatt $8.98 billion
Choice Hotels $3.65 billion
HomeAway $2.93 billion
Be a Platform
• Platforms help users create products, business, communities, and networks of their own. It help others build value
• If it is open and collaborative, those users may in turn add value to the platform
“In the economy we’re in now, if you’re not a platform, you’ll be commoditized”- Fred Wilson (Venture Capitalist)
Jeff Jarvis “What would Google do ?”
Platform for payment service
Platform for contractors
Platform for book tours
Innovation: From Top-Down Planning to Experimentation
Big Bets Decision
Fail Fast, and cheap
Big tough call leadership
The Questioner-in-Chief
Data: From Silos…to Strategic Assets
Source: Gartner
Value: From Defending …to Adapting, From Industry ...to Arena
“…Competitive advantage is transient, not sustainable… Sustainable competitive is not just ineffective, it’s actually counter productive…”
Professor McGrath
Transient advantages : “Continuous Reconfiguration”, • Being alert to what is going on around you• Having an external focus• Being prepare to move early, before the warning sign is obvious, before it’s too late
Provide Urban Mobility Solutions
Develop Builders ofTomorrow
Create a HealthierFuture
Source: Telkom
Digital Transformation Requires:
New capabilities
• Software
• Gather and manage big
data
• Data analytics: learning
• Real time
decision-making
• Start-up culture
• Fail fast and learn
• From one-sided business
model to multi-sided
business model
• Moving towards
outcome-based pricing
New culture for incumbents
New business models
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Table of Contents
1. Digital ‘Disruption’ Phenomenon
2. Digital Transformation Broad Trend
3. Visioning & Transformation in BRI
4. Managing Change
“The Most Valuable Bank in SEA & Home to The Best Talent”
BRI 2022 Aspiration
Redefining Our Value Proposition
Soon to be pushed-out by BRI’s Digital Banking?
“Bring Reliable Financial Services to
Everyone”
Everything we do start with WHY before How & What
Source : Bloomberg, 2013
Case Start with WHY - Learn From Apple
The Most Innovative Company with efficient R&D
DIGITAL TRANSFORMATION in BRI
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Customer Experience
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Financial Services with “Mobile First” channel
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Hybrid Mode Company Model
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THE STARTUP WAY
PEOPLEExperts – Optimizers – ConsistentManagers - Specialists
CULTURE“Failure is not an option” – Risk mitigationInnovation as a noun – CompliancePredictability
PROCESSFunctional hard-offs – Huge programs Quality through reduction of variabilityEconomies of scale – statistical process control
ACCOUNTABILITYROI – Cost reduction – Market shareMargins – incremental growthEntitlement funding
PEOPLECross-functional teams – Two-pizza teams
Entrepreneurs – Founder’s mindset
CULTURE“I eat failure for breakfast” – Productive failures
“Black swam” farming – Innovation as a verb
PROCESSHighly iterative, Scientificprocess
Build, measure, learn – Economies of speedPortfolio of rapid experiments
ACCOUNTABILITYInnovation Accounting – Lead Indicators
Future Absolute cash flow – Metered Funding
Vision – Purpose – Investment in People – Long-Term ThinkingFOUNDATION FOUNDATION
RESULTS RESULTS
Sustainable Growth - Team Morale
Continuous Innovation - Continuous Transformation
SHARED VALUES
Commitment to Truth
Discipline
Excellence
Continuous Improvement
GEN
ERA
L M
AN
AG
EMEN
TEN
TREP
REN
EUR
IAL M
AN
AG
EMEN
TThe Startup Way
Source : The Startup Way, Eric Ries
EXPLORATION
● Innovation :Breakthrough/Adjacent
● Business Strategy :○ Cooperative○ Business Incubation○ Develop Ecosystem○ Experiment/Prototyping
● Market Development● Value Leader● Factory Acquisition : IME
EXPLOITATION
● Innovation :Core/Incremental
● Business Strategy :○ Cost Leadership○ Speed
● Better Experience● Market Expansion● Revenue Leader● Classical Acquisition : T
Portfolio Balanced
Total Basket → Revenue, EBITDA = ∑ Exploitation + ∑ Exploration
Growing Balance PortfolioManaging Changes through Innovation is a ‘must’ in order to exist within the TIMES industry
Horizon 1-2 (sustaining & scaling) Horizon 2- 3 (scoping)
A New Approach in Designing Work
32Source: Nelson, P. et al, MITSloan Magazine Review, Winter Issue 2018 32
EXPLOITATION
EXPLORATION
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NEW Corporate Culture BRI 2018
Digital Culture: Customer Centricity - Nurturing Growth Mindset
Creating an Innovation Culture
Practicing ‘Innovation Parenting’ (innovation is everyone’s Job)
Bust Hierarchy (let ideas flow)
Encourage the unreasonable (tolerance toward failure and risk taking)
Don’t die of indigestion (commitment to allocate resources)
Cultivate external relationship (everything we do we can’t do it alone, focus on our strength)
Source: Dr. Waguih Ishak, McKinsey Quarterly, Sept 2017
New ‘Digital’ Leadershift and New Ways of Working!
Source: Adapted from Michael Kingsman, MIT CISR 37
The New Ways of Working
Agile (Scrum)
The New Ways of Working
Agile (Scrum)
Digital Ecosystem Innovation for Industry
Table of Contents
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1. Digital ‘Disruption’ Phenomenon
2. Digital Transformation Broad Trend
3. Visioning & Transformation in BRI
4. Managing Change
Start -up
Pro
fitLo
ss
growth
Maturity
Decline
CorporateTurnaround
Transformational Change.(transforms the business)
time
Corporate Lifecycle
Strategic Reorientation(altering/adopting new strategy)
StrategicAdjustments(tactical changes)
We are here!
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❸
❹
❶
What is Transformation And When We Need It? To keep stay ahead in the game, BRI needs to have a transformational change …
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Strategic Framework BRI
5 Pillars of BRI Corporate Transformation
C’s level Commitment
Clear & Right KPI Champion Team
3C Key Success of Transformation
5C BRI Transformation Pillars
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Clear Vision & Objective
The industry landscape requires us (financial) to be adaptive in order to succeed in the competition, where top leader commitment is one of the key success factor
CASA Leadership
Customer Focus
Credit Excellence
Capabilities on Digital
Culture - Performance driven
Thank You
