Competitive advantage in the digital era. Peter Dahlstrom, senior partner at McKinsey

Strategy Skills podcast episode 101.
Time codes:
~7.00 - Changing the way McKinsey recruit.
~8.30 - Hiring people to change the organization.
~10.00 - Knowing what to outsource and what to keep inside.
~11.30 - Controlling the most critical parts.
~12.00 - Bringing some outsourced tasks back inside the business.
~12.30 - Traditional and organizational processes do not work anymore.
~13.00 - Companies going digital and what it means. Mining data.
~13.30 - Not everyone will go digital in the same way. Types of digital transformation.
~15.00 - Fast food company example. Online e-commerce.
~16.30 - Telecommunications. Tough environment. Cost reduction. Moving customers to e-commerce.
~17.30 - Figure out how to change. The media tends to be biased towards a few companies. Danger getting caught in this echo chamber.
~18.00 - You can't copy Google, Facebook or Amazon. Have to start with assets you have. Use what you have got and create your own way.
~19.00 - Nuances. Netflix. Algorithms.
~20.30 - Some areas stronger areas to outsource. At some parts of the business the bar is too high to compete.
~22.00 - Most companies should have aspiration to own the data. Giving that up and hoping to win is going to be difficult.
~23.00 - Have to get to control the data. The last mile. How we use the data to make this final connection with consumers.
~23.55 - Amazon is very good with not sharing the data.
~26.00 - Netflix vs. other streaming services. Netflix started with relatively simple value proposition. Accumulated more and more data. Acquisition engine. Will be very difficult to compete because they created so many barriers to entry. They added more and more proprietary things.
~28.30 - The last mile and how important to control it. Companies so focused on building up digital capabilities fail to pay enough attention to this. You see it in retail and other industries.
~30.00 - Many of the retailers are not incentivized to capture the data.
~31.00 - Online sales portion of retail. Up-selling and cross-selling. Loyalty programs.
~32.30 - Investment around digitizing. Lowering German productivity.
~35.00 - People need to start transformation early in their career because there will be a period of time that is very difficult. One big success factor.
~35.30 - Communication is an important part of transformation. Move slowly to move faster. How are we going to differentiate? Create the strategy.
~38.00 - Disney making decisions going all in on streaming. A lot of companies going through this transition. Comes down to honest appraisal from CEO. Reallocating resources. Leading with strong direction and assertiveness towards a new direction with a full force.
~36.30 - In a large organization many tribes (100-150 people). In large organizations you have many, many of those. Your control is limited. It is quite uncomfortable. If you launch a new version of Word you got a product owner. Your level of control, for most normal mortal CEOs, the ability to influence what those people actually do, is limited. More a cheerleader.
~38.05 - If you run a large organization you can't do everything. Figure out how to get your teams to do what is important.
~39.00 - Graveyard for digital stars. Will you attract digital stars?
~39.30 - Magnet for superstars. The way you structure IT infrastructure is important. The working environment. Sends all wrong signals. Moving from the old to the new.
~42.30 - None of these principles are highly complex. What will determine if company will be successful?
~43.30 - The book is not technical. Conceptually none of the things we are talking about is rocket science. We talked about 15-20 different small things. IT architecture. Brining people into the organization to differentiate. Attracting the best talent. Creating cross functional teams and scaling them. Can't do all 15-20 things in parallel. Takes time. Can take 3,4,5 years. See it through. That is what makes it hard.
~45.30 - Competitors. Can have the world's greatest plan. Moving target. Graveyards of people who tried.
~49.30 - Digital economy. Taking a bet on where the future is going to be.
~50.30 - You have to be first with something. Fast followers is not a good strategy anymore. The environment is changing so fast. Industrial robotics, sequencing of DNA. Every single aspect of the change is exponential. The pace of change is so fast. If you follow you always going to be behind. Generally, you want to be there first in some way, on something. You need to be different on something. And the reason for that is it takes time to learn. It's a learning curve effect. Have to be out there and try things.
53.30 - Culture. The willingness to fail and learn.
54.00 - Idea of pace. Amazon less than 5% of the people read more than 7% of the book. Don't need to read the whole book. If you got a culture challenge read the culture section.

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