The document discusses how business models are disrupted by technological revolutions. It outlines four major revolutions: the Industrial Revolution, Services Revolution, Information Revolution, and current Digital Revolution. Each revolution shifts the focus of businesses and requires new financial and operating measures. The Digital Revolution in particular is built upon networks and relationships rather than assets. It favors models where many producers make and sell goods rather than centralized production models. However, the document notes most companies still lack readiness for digital transformation.

1. Business Model Disrupted
The Value Multiplier
Four Steps to Creating More Value and
Better Performance
August 2014

2. Agenda
Research
Assessment
Ac-on
Measurement
2
3
4
5
Orienta-on
1
Different
‘Asset’
Classes,
Value
Mul-pliersm
Business
Model
Index
and
Leadership
Style
Reallocate
Your
Capital
with
CAREsm
GAAP
Versus
Measuring
All
the
Sources
of
Value
Digital,
4
Business
Models,
Leadership
Preferences

3. Acquired
by
Facebook
for
~19x
revenue
Raised
funding
at
valua-on
of
~40x
revenue
Raised
funding
at
valua-on
of
~50x
revenue
Recent IPOs and investments highlight value of Digital

4. Q. Which of the following technology enablers and/or disruptors do you believe
may threaten your business model?
*Exploring
Strategic
Risk,
DeloiVe
Touche
Tohmatsu,
2013,
www.deloiVe.com/strategicrisksurvey
53% believe Digital threatens exis?ng business models

5. Making it the number 2 strategic risk
Q:
Which
of
the
following
risk
areas
have
the
most
impact
on
your
business
strategy
(three
years
ago,
today,
and
three
years
from
now)?
(Respondents
could
choose
more
than
one
answer.
The
top
three
are
shown
below)
*Exploring
Strategic
Risk,
DeloiVe
Touche
Tohmatsu,
2013,
www.deloiVe.com/strategicrisksurvey

6. 21%
21%
19%
15%
14%
Our
CEO
sets
a
clear
vision
for
digital
in
our
business
We
have
the
right
people
to
define
our
digital
strategy
We
have
the
necessary
technology
to
execute
our
digital
strategy
We
have
the
necessary
people
and
skill
to
execute
our
digital
strategy
We
have
the
necessary
processes
to
execute
our
digital
strategy
“Assessing
your
organiza-on’s
digital
readiness,
how
much
do
you
agree
with
the
following
statements?”
(8,
9,
or
10
on
a
scale
of
1
[completely
disagree]
to
10
[
completely
agree])
Base: 1,254 executives in companies with 250 or more employees
*Forrester/Russell
Reynolds
2014
Digital
Business
Survey
But, Forrester Research says few companies are ready

7. 1991 2011
Exxon Mobil Corp Exxon Mobil Corp
Altria Group Inc. Apple Inc.
Wal-Mart Stores Inc. Microsoft Corp
General Electric Co Intl Business Machines Corp
Merck & Co Chevron Corp
Coca-Cola Co Wal-Mart Stores Inc.
AT&T Corp Berkshire Hathaway
Intl Business Machines Corp General Electric Co
Bristol-Myers Squibb Co Procter & Gamble Co
Johnson & Johnson AT&T Inc.
Same position Higher positionLower positionNew entrant Lost position
Source: Compustat data
Business Models Effect Even Most Valuable Companies

8. So how did we get here?

9. Industrial
revolu-on
—
1800
Services
revolu-on
—
1975
Informa-on
revolu-on
—
1990
Network
revolu-on
—
2010
Technology
Time
Each Revolu?on was built on the last

10. Industrial
Revolu5on
Began
a
new
era:
Away
from
Agriculture
• Focused
inside
on
manufacturing
and
internal
processes…
• New
financial
and
opera-ng
measures
• Physical
output
• Asset
u-liza-on
• ROA
Digital Revolu?on
Beginning a new era:
Away from Info.
• Focused outside on social
and commercial networks
and the big data
produced…
• New financial and
opera?ng measures
• Network
size
•
Crowdsourcing
•
Value
of
all
intangibles
Informa5on
Revolu5on
Began
a
new
era:
Away
from
Services
• Focused
inside
on
intellectual
property,
digi-zing
content
and
insights…
• New
financial
and
opera-ng
measures
• Crea-ve
output
• R&D
• ROI
Services
Revolu5on
Began
a
new
era:
Away
from
Industrial
• Focused
inside
on
hiring
and
training
employees
to
provide
services…
• New
financial
and
opera-ng
measures
• Revenue/employee
• Customer
sa-sfac-on
Industrial Revolution
~1800
Services Revolution
~1975
Information
Revolution ~1990
Digital
Revolution ~2010
• Key
Asset:
CapEx
• Key
Asset:
Human
capital
• Key
Asset:
IP
• Key
Asset:
Network
/
rela-onships
New Eras, New Models, New Assets

11. Industrial
Revolu5on
Make
one,
sell
one
• Focus:
High
fixed
costs,
Field
(Ins-tu-onal)
sales;
big
accounts
•
Key
Industries
• Manufacturing
• Transporta-on
• Energy
•
Key
Competencies
• Finance
• Manufacturing
• Distribu-on
Digital Revolu?on
Many make, many sell
• Focus: Even lower fixed
costs, higher gross
margins; Inbound
marke?ng (consumers)
• Key Industries
•
Online
marketplaces
•
Social
sorware
•
Big
data
• Key Competencies
• Consumeriza-on
• Mobility
• Engagement
Informa5on
Revolu5on
Make
one,
sell
many
• Focus:
Lower
fixed
costs
and
higher
gross
margins:
Blended
sales;
SMB
• Key
Industries
• Enterprise
sorware
• Biotechnology
• Publishing
•
Key
Competencies
• Enterprise
Technology
• IP
development
• Content
New models, new economics, new assets
Services
Revolu5on
Hire
one,
sell
one
• Focus:
Shir
of
capital
from
CapEx
to
salary;
customer
in-macy
• Key
Industries
• Finance
• Enterprise
Sorware
• Publishing
•
Key
Competencies
• Recrui-ng
and
training
• Customer
service
• Lifecycle
support
Industrial Revolution
~1800
Services Revolution
~1975
Information
Revolution ~1990
Digital
Revolution ~2010

12. Network
Orchestrators
Technology
Creators
Service
Providers
Asset
Builders
Key assets Key competencies Key industries
• Relationships
• Network
• Knowledge
• Software
• IP
• Skilled
employees
• PPE
• Consumerism
• Mobility
• Engagement
• Research &
development
• Communication
• People
services
• Manufacturing
• Distribution
• Social software
• Big data
• Software
• Biotech
• Energy
• Transport
• Retail
• Financial
• Healthcare
• Insurance
Different eras create different industries and assets

13. Network
Orchestrators
Technology
Creators
Service
Providers
Asset
Builders
Different eras, have different business models
Many Make, many sell
Make one, sell one
Hire one, sell one
Make one, sell many
Build Platform

14. Technologies
Newer
Older
Low
High
Growth
and
Value
The marginal cost for scaling goes down with each model!
Result: Different models, different results
Asset
Builders
Service
Providers
Technology
Creators
Network
Facilitators

15. Exercise: which business model are you?
?
How do you make and spend money?

16. As noted, there are four business models…
Sorware
and
IP
(IQ)
Networks
and
big
data
(NQ)
Assets
and
products
(PQ)
People
and
services
(EQ)
The
digital
divide

17. Exercise: what is your business model?
1. Consider
your
revenues
and
ask…
2. Where
do
most
of
our
revenues
come
from…
3. Then,
place
a
post-­‐it
note
on
one
of
4
quadrants…
4. Understand
what
this
means
for
how
your
firm
makes
and
spends
money
Sorware
and
IP
Networks
&
big
data
Assets
&
products
People
&
services

18. Exercise: How do you make and spend money?

19. Asset
Builders:
Make,
market,
distribute,
and
operate
physical
assets
and
sell
products.
Invest
in
building/acquiring/managing
PP&E.
Examples:
auto,
real
estate,
advanced
materials,
u@li@es,
airlines,
and
telecom.
Service
Providers:
Hire
people
to
produce
services
for
which
they
charge.
Invest
in
hiring/training,
ren-ng
space.
Examples:
investment
banking,
healthcare,
customer
service,
accoun@ng,
and
management
consul@ng.
Technology
Creators:
Develop
and
sell
IP.
Invest
in
developing/
marke-ng
IP
to
more
users/subscribers
(not
making
more
of
the
same).
Examples:
soAware,
high
tech,
bio
tech,
pharmaceu@cals,
Fin
Tech,
and
data.
Network
Orchestrators:
Create
networks
of
businesses/
consumers
who
interact
to
sell
products,
build
rela-onships,
share
advice,
exchange
financial
instruments,
etc.
Invest
in
technology
plauorms
and
growing
networks.
Examples:
social
networks,
commercial
networks,
and
financial
exchanges.
Other,
please
specify
________________
100%
100%
Earnings
contribu-on
propor-on
Capital
Investment
propor-on
%
%
%
%
%
%
%
%
%
%
Please
describe
your
earnings
and
investments
u5lizing
the
four
basic
business
models
below.
First
aVempt
to
simplify.
(1)
Cut
out
the
“count”
column,
(2)
re-­‐worded
ques-on,
(3)
eliminated
“scales
by”
sec-on
of
each
descrip-on,
(4)
shortened
remaining
wording.
Make,
market,
distribute
and
operate
physical
assets
and
sell
products:
Examples
include
auto,
real
estate,
advanced
materials,
u@li@es,
airlines
and
telecom.
Design,
market
and
provide
services:
Examples
include
investment
banking,
healthcare,
customer
service,
accoun@ng,
informa@on
services
and
consul@ng.
Develop,
market
and
sell
intellectual
property:
Examples
include
soAware,
high
tech,
bio
tech,
pharmaceu@cals,
Fin
Tech
and
big
data.
Create,
market
and
operate
networks
of
businesses,
consumers,
investors,
etc.:
Examples
include
social/
commercial
networks
and
financial
exchanges.
Other,
please
specify
________________
100%
100%
Earnings
contribu-on
Capital
alloca-on
%
%
%
%
%
%
%
%
%
%
How
much
do
the
following
business
ac5vi5es
contribute
to
your
earnings
and
consume
of
your
investments?
Shirs
away
from
“business
model
terminology”
and
toward
“ac-vity
terminology.”
Removes
“Invests
in”
descrip-on
but
retains
examples
of
industries
Make,
market,
distribute
and
operate
physical
assets
and
sell
products
Design,
market
and
provide
services
Develop,
market
and
sell
intellectual
property
Create,
market
and
operate
networks
of
businesses,
consumers,
investors,
etc.
Other,
please
specify
________________
100%
100%
Earnings
contribu-on
Capital
alloca-on
%
%
%
%
%
%
%
%
%
%
How
much
do
the
following
business
ac5vi5es
contribute
to
your
earnings
and
consume
of
your
investments?
Same
as
above
but
removes
examples
of
industries
–
assumes
these
descrip-ons
will
fit
CFOs
percep-ons
of
what
they
do.
Exercise: How Do You Classify Yourself (Placeholder)

20. Agenda
Research
Assessment
Ac-on
Measurement
2
3
4
5
Orienta-on
1
Different
‘Asset’
Classes,
Value
Mul-pliersm
Business
Model
Index
and
Leadership
Style
Reallocate
Your
Capital
with
CAREsm
GAAP
Versus
Measuring
All
the
Sources
of
Value
Digital,
4
Business
Models,
Leadership
Preferences

21. Industries are Ver?cals, Business Models are Horizontal
Network
Orchestrator
Technology
Creators
Service
Provider
Asset
Builders

22. Size of circle
represents
number of
companies
within
industry
Note: Based on analysis of the S&P 500
Source: Capital IQ data pulled October 2013,; Revenue is LTM
Average Multiplier
The Value Mul?plier is Inversely Correlated with Tangible Assets

23. Assets
2x
Services
3x
Size of circle
represents
number of
companies
within industry
or multiplier
group
Note: Based on analysis of the S&P 500
Source: Capital IQ data pulled October 2013,; Revenue is LTM
Average Multiplier
Industries have some affilia?on with Business Models
Tech
5x
NW
8x
• Intercon-nental
Exchange
Group
• Discover
Financial
• TripAdvisor
• Visa
• MasterCard
• CME
Group
• Salesforce.com
• Red
Hat
• Google
• eBay
• American
Express
• Apple
• Nike
• Nasdaq
OMX

24. Intangible Assets are now 80% of Market Value, Up from 20%
Source: Compustat data | Research from Ocean Tomo

25. 0.62
0.40
0.31
0.00
Assets
Svcs
Tech
Network
Average
COGS/Revenue
0.15
0.27
0.28
0.41
Assets
Svcs
Tech
Network
Average
SG&A/Revenue
Note: Based on analysis of the S&P 500 companies
Source: Data pulled from Capital IQ database in October 2013; Revenue is prior 12 months
Leaders spend money based on their business model
0.01
0.00
0.15
0.06
Assets
Svcs
Tech
Network
Average
R&D/Revenue

26. Result: Network business models grow faster…
8.4
7.9
12.6
19.4
Assets
Svcs
Tech
Network
Avg.
Revenue
CAGR
’10-­‐’12
The
digital
divide
Note: Based on analysis of the S&P 500 companies
Source: Data pulled from Capital IQ database in October 2013; Revenue is prior 12 months
… with lowest marginal cost of expansion

27. …highest profit margins…
0.15
0.14
0.24
0.32
Assets
Svcs
Tech
Network
Average
Profit
Margin
0.23
0.21
0.30
0.38
Assets
Svcs
Tech
Network
Average
EBITDA/Revenue
Note: Based on analysis of the S&P 500
Source: Capital IQ data pulled October 2013; Revenue is prior 12 months

28. 2.0
2.1
4.6
8.1
Assets
Svcs
Tech
Network
Average
Mul5plier
(Price
to
Revenue
ra5o)
…as well as enterprise value premiums!
Note: Based on analysis of the S&P 500 companies
Source: Data pulled from Capital IQ database in October 2013; Revenue is prior 12 months
The
digital
divide

29. Network business models are fastest growing
0%
20%
40%
60%
80%
100%
1972
1982
1992
2002
2012
Types
of
companies*
comprising
the
top
5%
of
the
S&P
500
by
P/R
Assets
Services
Technology
Network
*Each
company
manually
classified
based
on
examina-on
of
business
descrip-on,
spending,
and
MD&A
from
annual
report,
along
with
press
releases
and
other
news;
company
classifica-on
was
changed
if
company
strategy
changed
over
-me
The
network
era

30. 0.00
2.00
4.00
6.00
8.00
10.00
1975
1980
1985
1990
1995
2000
2005
2010
2013
Average
P/R
Ra5o
by
Business
Model
Historically
Network
Informa-on
Services
Industrial
*Digital CAGR is 1980 – 2013
Note: Based on analysis of the S&P 500
Source: Capital IQ data pulled October 2013; Revenue is prior 12 months
CAGR
1975 – 2013
8.7%*
2.7%
4.5%
3.4%
This trend is accelera?ng and premiums are widening
Assets
Technology

31. 0
20
40
60
80
100
120
140
160
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18+
Distribu5on
of
S&P
500
Investors
pay
more
than
$18
for
each
$1
of
revenue
Investors
pay
less
than
$1
for
each
$1
of
revenue
But: 80% of companies are s?ll asset and services firms
Number of companies that
fall within each range
80% of
companies
have P/R ratio
less than 3

32. Exercise: which business model are you?
?
How do you make and spend money?

33. Agenda
Research
Assessment
Ac-on
Measurement
2
3
4
5
Orienta-on
1
Mental
Models,
‘Asset’
Classes,
Value
Mul-pliersm
Business
Model
Index
and
Leadership
Style
Reallocate
Your
Capital
with
CAREsm
GAAP
Versus
Measuring
All
the
Sources
of
Value
Digital,
4
Business
Models,
Leadership
Preferences

34. Our research indicates that Business are f(Mental Models)
Mental
model
Business
model
• What
leadership…
• Believes
is
important
• Has
developed
their
own
skills
• Gives
-me
and
aVen-on
• Measures
and
reports
• How
a
company…
• Spends
and
makes
money
• Hires
people
and
builds
skills
• Engages
with
customers
• Generates
long
term
growth
&
performance
Depends on leaders ahtudes, biases and beliefs

35. Exercise: What’s Your Mental Model
?
What is your leadership Style?

36. Take the Survey: Find Your Mul?plier

37. There are Four Different Business Models
Technology
Creators
Network
Facilitators
Asset
Builders
Service
Providers
The
digital
divide
Social
networks
Stock
exchanges
Credit
card
companies
Financial
services
Insurance
companies
Consultants
Manufacturers
Retailers
Distributors
Drug
companies
Biotech
companies
SW
developers

38. Each Business Model Has its Own Mul?plier Effect
The
digital
divide
4
8
1
2
Assets
Services
Technology
Network
Focus
Investment
Inside
Outside
Intangible
Tangible

39. …as well as business model risks
IP
&
sorware
Risks
Reputa-on
&
network
Risks
Asset
&
Product
Quality
Risks
Employee
&
Training
Risks
The
digital
divide

40. Exercise: What is your Mul?plier Effect?
?
…Calculate the value of your business model

41. Take the Survey: Find Your Mul?plier

42. Alterna?ve: Es?mate your P/R ra?o
1. Write
your
company
name
on
post-­‐its
2. Es-mate
your
P/R
ra-o
3. Place
post-­‐its
on
the
scale
on
the
white
board
4. We
will
provide
the
actual
P/
R
ra-o
5. Discuss
the
difference
Client
4
Network
8
Client
1
Physical
2
Client
3
Info.
5
Client
2
Services
3
High
Low
The
digital
divide

43. Agenda
Research
Assessment
Ac-on
Measurement
2
3
4
5
Orienta-on
1
Mental
Models,
‘Asset’
Classes,
Value
Mul-pliersm
Business
Model
Index
and
Leadership
Style
Reallocate
your
capital
with
CAREsm
GAAP
Versus
Measuring
All
the
Sources
of
Value
Digital,
4
Business
Models,
Leadership
Preferences

44. Add Create
Eliminate Revise
Use CARE to Reallocate your capital

45. The Value Mul?plier: 4 Step Process
Orienta-on
What:
There
are
4
standard
business
models,
each
with
their
own
archetypes,
assets,
and
Value
Mul-plierssm.
How:
The
Value
Mul@plier
EBook
and
The
Value
Mul@plier
Research
EBook,
Infographic
,
instruc@onal
videos
(3),
and
ar@cles.
Assessment
What:
Companies
can
ascertain
their
business
model
index,
leadership
style,
and
all
the
sources
of
value.
How:
www.Digitalgrader.com
which
includes
Business
Model
Indexsm
and
Leadership
Stylesm
(Forthcoming)
and
Digital
Inventory
Managersm
apps.
Ac-on
What:
Organiza-ons
can
outperform
their
compe--on
by
crea-ng
network
centric,
P:P
business
models.
How:
By
realloca@ng
capital
to
build
network
centric
business
models
using
our
CAREsm
app
(Forthcoming),
Workbook,
Curriculum,
and
Standard
Presenta@on.
Measurement
What:
Generally
Accepted
Accoun-ng
Procedures
(GAAP)
either
mis-­‐categorize
or
overlook
many
of
today’s
most
valuable
assets.
How:
Use
our
Digital
Inventory
Managersm
to
integrate
big
data
and
financial
data
to
track
all
the
sources
of
value
in
real
@me
(forthcoming).

46. Remember: there are four ‘assets’ in which to invest
Asset
Examples
Tangible
Financial
Stocks,
Bonds,
Warrants,
Op-ons
Physical
Plant,
Property,
Equipment
Intangible
Human
Employees,
Partners,
Contractors
Intellectual
Data,
Knowledge,
Sorware
Network
Customers,
Partners,
Alumni,
Prospects

47. Exercise: Think About How to Reallocate your Capital
?
Use CARE to rebalance your pornolio

48. Take Care Program: 4 Steps to Success

49. CARE: Reallocate your capital
Por_olio
of
Tangible
and
Intangible
assets
Create
Asset
will
operate
more
efficiently
if
decreased
in
scale
or
scope
Add
An
opportunity
has
been
iden@fied
to
create
an
en@rely
new
and
valuable
product/
asset
Revise
Asset
ahs
poten@al
to
increase
value
crea@on
by
adding
new
components
(features,
customers,
etc.)
Eliminate
Asset
is
no
longer
valued
or
is
underperforming
with
no
path
to
improvement
Asset
1
Asset
2
Asset
3

50. Agenda
Research
Assessment
Ac-on
Measurement
2
3
4
5
Orienta-on
1
Mental
Models,
‘Asset’
Classes,
Value
Mul-pliersm
Business
Model
Index
and
Leadership
Style
Reallocate
Your
Capital
with
CAREsm
GAAP
Versus
Measuring
All
the
Sources
of
Value
Digital,
4
Business
Models,
Leadership
Preferences

51. Reward
Risk
Biologic
alassets
Financialassets
Inventories
Property,plantandequipment
Non-current
assets
Employee
benefits
Depreciation
Payroll
Interest
expenses
Terminationbenefits
Interactions
Consumer
sentiment
Patients
Socialnetworks
Customers
Positive bias
Negative bias
Non categorized
Positive bias
Assets
Negative bias
Expenses
Neutral Bias
Not categorized
Some Assets have Nega?ve Bias, Some Posi?ve

52. Outside
Managed
Outside
unmanaged
Inside
managed
Inside
unmanaged
To Compensate, Examine All the Sources Of Value

53. Measurement Capital Sources Examples
Inside
Managed
Financial
Return on Asset, Return on
Investment, Assets under
management
Inside
Managed
Physical
Rent, SF under management,
utilization/occupancy rate
Inside
Unmanaged
Human
Intellectual capital, Employee
engagement, networks, alumni
Outside
Managed
Intellectual
Patents, Trademarks, Copyrights,
business methods
Outside
Managed
Customers
Loyalty, customer engagement, co-
creation, word of mouth marketing,
Outside
Unmanaged
Network
Size of network, number of
participants, number of interactions,
data size, vitality
Examples of Different Measurements by Quadrant

54. Exercise: What is our business model worth
?
And what is the marginal cost for scaling?

55. Inventory all your sources of value

56. Human
capital
Intellectual
capital
Network
capital
Business
unit
Employees
Partners
Contractors
Data
Knowledge
Sorware
Customers
Partners
Alumni
Prospects
BU1
BU2
BU3
Intangible Asset Inventory Tool

57. Alterna?ve: Value all your intangible assets
• Use
finance.yahoo.com
to
find
• Market
Value
• It
is
found
under
Key
Sta-s-cs
• Determine
your
Non
assets
• In
addi-on,
write
down
your
key
sta-s-cs:
• Revenues
• Expenses
• Profits

58. Co. A FYxx Intangibles value $6B
Revenue $40B
Technology COS %
GM% 22%
SGA% 20%
Operating Margin % (.5%)
Market Value $9B
Price To Revenue 0.2
Total Assets $20B
Total Liabilities $15B
Intangible Assets (Market) $4B
Intangible Assets (Acquired) $1B
Physical Assets $15B
Co. B FYxx Intangibles value $106B
Revenue $60B
Technology COS 7%
GM% 14%
SGA% 12%
Operating Margin % 1.0%
Market Value $115B
Price to Revenue 2.0
Total Assets $30B
Total Liabilities $20B
Intangible Assets (Market) $105B
Intangible Assets (Acquired) $3B
Physical Assets $28B
Source:
Company
10-­‐K
Case Study: Company A versus Company B

59. • Market
value
is
considered
to
be
the
present
value
of
future
discounted
cash
flows
• Despite
being
rela-vely
same
sized
($40B
and
$60B),
and
both
delivering
opera-ng
margins
(~1%),
the
market
views
company
B
as
13x
more
valuable
• So
why
does
the
market
believe
Company
B’s
future
cash
flows
will
be
so
much
higher
than
Company
A’s?
• The business model, clicks are more scalable than bricks
• The management team, and the employees (human capital) that
understand the newer business model
• The customer, company B uses technology “as the business”, while
Company A uses technology “to support the business”
• Recognizing
that
both
companies
have
strong
brand
and
reputa-on,
the
market
gives
Company
B
credit
for
over
$100B
in
addi-onal
intangible
assets
Note: The market value of Intangibles

60. • Split into four working groups, which will each tackle one of the following
topics:
1. Who at the client do you target?
2. What does the client-­‐facing lab look like?
3. How do we structure a strategy engagement?
4. How does this align with exis?ng Deloiqe services
• You will have 30 minutes to discuss and develop ideas within your
working group
• Each group will then read back out to the lab, ~10 minutes per topic
• Last topic: which clients do we target (20 min)
Note: For Each Working Session

62. 4 step process for growth and performance
Measuring
On
Going
KPIS
Ac-on
6
Months
Analysis
3
Months
Orienta-on
1
Day
Gather
senior
leadership
in
offsite
mee-ng
to
asses
current
mental
model
assump-ons
and
business
model
investments
Generate
detailed
business
model
ac-ons
by
process
and
product
to
include
digital
networks
star-ng
with
‘edge
based
ini-a-ves’
Expand
edge
based
digital
networks
and
new
KPI’s
to
create
plauorm
for
business
model
transforma-on
over
-me
Con-nuous
Improvement
Conduct
high
level
analysis
of
capital
alloca-ons
by
SBU
and
inventory
all
intangible
assets
and
enabling
IT

63. 4 Step Process: Orienta?on
Assess
Your
Risk
Propensity
and
Business
Model:
The
1-­‐Day
Offsite
• Understand
business
models
and
their
rela-ve
economics
• Assess
current
mental
models
of
leadership
team
• Assess
current
business
model
indicated
by
current
assets
and
technologies
• Exercises
to
understand
Value
Mul-plier
and
capital
alloca-on
• Management
team
has
complete
understanding
of
business
model
and
economics,
plus
the
gap
between
current
business
model/performance
and
the
poten-al
Process
Tool
Outcome
Monitoring
On
Going
Ac-on
6
Months
Analysis
3
Months
Orienta-on
1
Day

64. 4 Step Process: Analysis
Inventory
Tangible
and
Intangible
Assets:
The
90-­‐Day
Assessment
• Cross-­‐func-onal
task
force
formed
• Team
inventories
current
assets
and
technologies,
plus
capital
alloca-on
paVerns
• Team
inventories
unmeasured
and
intangible
assets
not
yet
mone-zed
by
firm
• Mental
Model
Assessment
and
Intangible
Asset
Inventory
• Management
team
has
complete
understanding
of
the
firms
assets,
both
tangible
and
intangible,
plus
the
related
technologies
and
the
historical
trends
for
capital
alloca-on
among
these
assets
Process
Tool
Outcome
Measure
On
Going
KPIS
Ac-on
6
Months
Analysis
3
Months
Orienta-on
1
Day

65. 4 Step Process: Ac?on
Create
a
New
Business
Model:
The
6-­‐Month
Implementa5on
• Form
project
team
to
mone-ze
a
currently
under
u-lized
asset
(oren
a
network
of
customers,
employees,
shareholders,
suppliers,
etc.)
• Develop
a
technological
plauorm
to
connect
this
popula-on
• Populate
the
plauorm
with
content
and
product
offerings
• Create
processes
and
incen-ves
that
encourage
the
network
to
par-cipate
• Template
for
a
New
Business
Model
• The
development
of
new
and
highly
scalable
assets
plus
a
repeatable
process
for
con-nuing
to
develop
underu-lized
assets
Process
Tool
Outcome
Measure
On
Going
KPIS
Ac-on
6
Months
Analysis
3
Months
Orienta-on
1
Day

66. 4 Step Process: Measurement
Monitor
and
Rebalance:
An
Ongoing
Process
for
Delivering
Value
• Establish
new
and
tailored
KPIs
for
the
developing
asset
(network)
• Integrate
those
KPIs
with
exis-ng
financial
repor-ng
for
senior
management
• Use
KPIs
to
manage
and
allocate
financial
capital
across
all
assets
• Asset
Rebalancing
Tool
• Management
team
is
informed
about
the
progress
of
network
development,
using
new
KPIs
tailored
to
the
asset
and
can
effec-vely
gauge
success
and
allocate
capital
Process
Tool
Outcome
Measure
On
Going
KPIS
Ac-on
6
Months
Analysis
3
Months
Orienta-on
1
Day