Digital Transformation and the Shared Value Shift
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How does your performing arts organization generate public value? How will this change as the arts sector undergoes digital transformation? Come explore the cultural and creative shift digital transformation opens, and take your first steps to re-imagining how shared value is generated and how you can open yourself to deeper engagement with new audiences. This presentation was developed and delivered as part of the linked digital future initiative. For more information, visit: https://linkeddigitalfuture.ca/resources/workshops/
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Digital Transformation and the Shared Value Shift
- 1. Digital Transformation and the Shared Value Shift Presentation by Akoulina Connell www.akoulinaconnell.com Twitter: @akouconnell LinkedIn: @akoulinaconnell
- 2. Shared value isn’t always where you plan it… This Photo by Unknown Author is licensed under CC BY-SA
- 3. Digital transformation: a cultural shift The main concepts in this presentation are credited to: David L. Rogers: The Digital Transformation Playbook. The digital shift moves us from transactional to relational. The five domains of strategy altered in the digital shift include: • Customers • Competition • Data • Innovation • Value
- 4. From Analog to Digital: the digital transformation journey « The future is already here - it’s just not very evenly distributed. » - William Gibson
- 5. Customers / Audience This is all about who your organization serves. For an arts service organization, it’s membership. For a performing arts organization, it’s audience, subscription-holders, and donors.
- 6. Audience, members, donors (Customers) Analog Digital Age Audience as a mass market Audience as dynamic network One-way value flows: communications are broadcast to audience (inside>out) Reciprocal value flows: Communications are two-way (reciprocity) Organization is the key influencer Audience(s) are a key influencer Marketing to persuade purchase Marketing to inspire purchase, loyalty, advocacy
- 7. Harnessing Customer Networks Analog vs Digital (networked)core behaviours of audience (customer) networks
- 8. Competition From analog competition to digital co-opetition. To succeed, you may need to collaborate with your direct competition for networked market share. New paradigms are required to succeed in the attention economy.
- 9. Competition Analog Digital Age Competition within defined sector segment Competition across fluid sectors Clear distinctions between partners and rivals Blurred distinctions between partners and rivals Competition is a zero-sum game Competitors cooperate in key areas Key assets are held inside your org Key assets reside in outside networks Products with unique features and benefits Platforms with partners who exchange value
- 10. Data When it comes to data, we’re moving from learning to read to reading to learn. Linked Digital Future (LDF) Digital Maturity Assessment https://linkeddigitalfuture.ca/#digital-maturity-
- 11. Data Analog Digital Data is expensive to generate in-house (human hours for manipulation) Data is continuously generated everywhere (crossover with external data; automated dashboards (APIs)) Challenge of data: storing and managing it Challenge of data: turning it into valuable information Organizations only use structured data (relational databases / internal) Unstructured data is increasingly usable and valuable (linked open data / external) Data is managed in operational silos (software solution = one dataset) Value of data is in connecting it across silos (interoperability) Data is a tool for optimizing processes • Data is a key intangible asset for value creation
- 12. Interoperability starts at home… Step one: Interoperability between in-house data Step two: Linked Open Data using standardized practices across multiple organizations with similar profiles Financial software CRM softwareOther digital assets Communications (website/social media metrics) Arts Knowledge Graph Medusa Dance Corps Dance companies Theatre companies Music companies
- 13. Innovation Innovation is, at its very foundation, the creative process. This is where artists are expert, and it is where other sectors turn for inspiration and insight. And yet we have we have traditional paradigms of our own that also demand to be questioned and tested.
- 14. Innovation Analog Digital Decisions made based on intuition and seniority Decisions made based on testing and validating Testing ideas is expensive, slow, and difficult Testing ideas is cheap, fast, and easy Experiments conducted infrequently, by experts Experiments conducted constantly, by everyone Challenge of innovation is to find the right solution (“excellent” + popular = profit) Challenge of innovation is to solve the right problem (relevance = deeper community engagement, advocacy + profit) Failure is avoided at all cost / focus is on the finished product Failures are learned from, early and cheaply / focus is on minimum viable prototypes and iteration after launch
- 15. Value Value is the driver at the core of any decision or action. Shared value has deeper relevance and greater staying power, but its generation is iterative and evolves over time.
- 16. Value Analog Digital Age Value proposition defined by industry Value proposition defined by changing audience audience needs Execute your current value proposition Uncover the next opportunity for audience Optimize your organization’s business model as long as possible (stasis by default) Evolve before you must, to stay ahead of the curve (active evolution) Judge change by how it affects your current success Judge change by how it could create your next success Market success allows for complacency Only the risk-takers survive
- 17. Value chain mapping exercise What does your current value chain currently look like? Let’s map it! To create a value train diagram, begin by answering three questions: 1. Scope: What is the value offering (product or service) you will analyze? (write description in the heart) 2. Customer/audience/member: Who is your ultimate customer/audience/member? Draw them as a circle on the far right of your diagram and write a short description. 3. Last entity: What source does the customer receive the offering directly from? Draw this party as a square to the immediate left of the customer. 4. Prior entities: What other organizations, if any, provide unique inputs to that organization? Draw them as additional squares to the left. AUDIENCEORG 1 ORG 1 ORG 1
- 18. DIGITAL TRANSITION: towards shared value What changes would you see in your value chain if you take the following elements into account? • Linked Open Data (networked discoverability) • Networked audience (customers) + reciprocity loops (iterative value generation) • Demographic diversity (new perspectives on shared value) • Cooperative models for competetive advantage (co-opetition with traditional competitors for a larger collective share of the attention market)
- 19. Value chain mapping exercise, continued… Conduct the same exercise, but now consider… Focal organization: Which organization is the focus of your analysis? (e.g. your own organization, or another whose value chain you are studying) Add an additional outline to the square around it. Value and data exchange: Between each square, add arrows in both directions. Label each arrow pointed to the right to indicate what value and/or data is being delivered to the downstream party (e.g. product, service, or creative element on them). Label each arrow pointed to the left to indicate what value is being delivered upstream / data shared. Symmetric competitors: For each square in the chain, identify the symmetric competitors (i.e. organizations that offer similar value, with a similar operating model). Add them to diagram as rectangles below the square square they compete with (e.g. if the NAC was in your value chain as the final distributor, below it you would put a rectangle indicating other brick and mortar distributors). Asymmetric competitors: For each square in the chain, identify the asymmetric competitors (e.g. an alternate distribution channel, producer, or creative contributor/collaborator that can substitute for the organization, has a different organizational model). Add them to the diagram as trapezoids above the square they could potentially serve as a substitute for.
- 20. Value chain mapping exercise Figure 3‐11: Complete Value Train Diagram for Sony Music in the MP3 Music Market (Rogers, 2014)
- 21. Mapping Resources for Your Digital Transformation What resources do you need in place to enable your organization’s digital transformation and create the conditions where new shared value can develop, evolve, thrive over time? • Partners & Collaborators (similar organizations or organizations with complementary or divergent offerings that broaden the scope of opportunity) • Funders (financial stability will be essential • Skills & Training (where can training be sought to support internal capacity development?) • Specialists / Experts (are there gaps in your organization’s competencies? Where can you go to seek mentorship, strategic advice, or hire for specific skillsets?)
- 22. Final Considerations Change comes with risk. Stasis carries risk, too.
- 23. Stragegic Planning now requires an integrated Digital Strategy Whether your organization is tiny or large scale, from now on, strategic planning and developing a digital strategy goes hand in hand. Your strategic plan is about your mission, vision, values and goals. Your digital strategy lays out how you’ll experiment, create, support, implement, report, measure, learn, exchange, and evolve over time.
- 24. THANK YOU! And thanks to our collaborators and funding partners: linkeddigitalfuture.ca
Notas do Editor
- This image is an illustration of what is commonly called a “desire line.” It’s about planning versus user experience. As you consider user experience in relationship to your organization, how do you currently build shared value with your audience? How is your audience consuming cultural content today? Has it changed? Your audience is now travelling on new pathways in an aggressive digitized attention market. The digital context magnifies the desire lines and user experience question exponentially. Competition for attention is brisk in the online environment. The performing arts are competing with news, sports, Netflix, Amazon, Travel pop-ups, and cat videos. Consider who your traditional audience is – what does the customer profile look like? What does the social media network of this audience look like? Now consider who isn’t in your audience. How has the demography of your community changed in the last 20 years or so? What do the networks of these potential audiences look like?
- This presentation draws on conceptual frameworks developed by David L. Rogers in his book The Digital Transformation Playbook. Any time a culture shifts, it demands change in behaviours, systems, and practices. The digital shift, marks transition from a fundamentally transactional model to a set of systems that are relational. Transactional = bums in seats and traditional creation paradigms led by experts shaping an overall artistic vision, where long-term tastemaking for an established audience is generated from the inside – out. Relational = feedback loop with a networked audience that shares their preferences. Creation paradigm is more inclusive and the feedback loop on what is relevant, meaningful, valued, and pushing the envelope comes by listening to audiences using online engagement tools. Rapid prototyping experiments on small shows that draw response from various new audiences could in turn result in programming shifts with new voices leading creative work.
- Audience, members, subscription-holders, donors – these are “customers” to a performing arts organization. And chances are, your audience, donors, and members haven’t changed much over time. Or have they? If you were going to average things out in your mind, what would the composite portrait of your audience / subscription-holder / donor look like? Age Social status Economic status Education level Neighbourhood(s) When your organization works on programming and/or creative output, this generalized portrait is likely front of mind – for artistic direction, programming, and the types of marketing campaigns, outreach strategies, and fundraising relationship strategies you’ve built. And over time, your organization has carved out a niche and has achieved a certain level of success with these methods. Chances are, you’re using a CRM solution to gather and track data on these relationships, too. Believe it or not, even with some digital tools, most of us are still in an analog mindset.
- The digital context is shaking things up. The analog reality we and our audience are comfortable with is transforming into something new. Mass marketing techniques, where we know exactly who our audience (mass-market) is and what they’ll like, under the visionary direction of a sole artistic director - we can’t take that for granted any more. Every potential audience member – even those who haven’t been to one of your shows yet – is networked online and sharing opinions about what they love and what they don’t. If we’re not listening, we may not be attracting our best audience nor programming the most relevant, ground-breaking work. Broadcasting to audience from the inside-out is no longer the most effective communications strategy if we want new desire lines to find their path to our door. In a digital reality, we have to listen and respond. It’s a dialogue; reciprocity is the name of the game. Social media marketing tools and metrics matrices are getting more and more effective all the time. The organization (Artistic director and creative team) – these have been the key influencers and tastemakers we have traditionally turned to in an analog space. Things are beginning to shift. I invite you to consider the possibility that audience – not just the ones you know, but the audiences you don’t yet have a relationship with – is becoming an influencer. If the demography of your community has changed and you don’t see that when you look out the house, then opening some new channels for dialogue on what is relevant /important / provocative for these potential audience(s) are a winning strategy for ensuring that you’re programming speaks to a broader spectrum. Marketing to persuade purchase, whether it’s a season pass or a single show – this is well known territory. A digitally networked audience not only purchases a ticket, they trumpet their loyalty and advocate for the relevance of your programming online.
- Illustrated above: an Analog value flow according to traditional business paradigms in the performing arts / creative vision inside (sending) – audience outside (receiving). Illustrated below: the mostly unharnessed reciprocal potential of a digitally networked audience reciprocally nourishing the creative vision and output of a performing arts organization that is programming to diverse, networked audience that builds new growth potential and the possibility of broader and deeper social relevance.
- In the arts and culture sector, we work lean and we collaborate often on creative projects. But when it comes to our audience and donor data, we’re more traditionally “competitive”. We guard this data carefully in our organizational silos (usually in CRM software) to keep our competitive edge. In a given city, a dance organization might be competing for audience share with other dance companies, theatre companies, circus troupes, and the local chamber orchestra, symphony, and/or opera. We work hard to differentiate ourselves to build our niche audience. How does this dynamic shift, how can the arts and culture sector leverage co-opetition strategies? What data do we already share, and how can we share it more effectively for collective benefit? How do we develop shared data sets and linked open data to capture a greater share of attention market and so that the whole performing arts sector gains networked market share? This is essential, because one organization alone is not discoverable in the AI powered web. Only clusters are visible. There is strength in numbers. The bigger the cluster, the more likely new networked audiences are likely to find us.
- 1. In a localized analog world, audience is clearly-defined, and so is the market segment for entertainment dollars. Your organization is accustomed to competing for local market share with other dance, theatre, music, festivals, galleries, and reading locally (local arts scene). In the global digital space, the performing arts lacks the basic tool for visibility (linked open data) and is struggling for visibility and market share. Competition in the attention market is vast and networked (Netflix, music streaming services, sports streaming services, Netflix, cat videos, YouTube and much, much more). 2. In the analog space, you know exactly who you’re competing with for audience, and while your audience looks a lot like your competition’s, you’ve made clear distinctions in your creative output to carve out your niche. In the digital space, distinctions between traditional partners and rivals begin to blur. Without cooperating with your previous rivals for linked open data cluster visibility, you’re stardust in the milky way – intangible, unfindable, lost in the cacophony of global digital noise. 3. Gone are the days of beating out the local competition to ensure a successful season. Now we need to cooperate in key areas (such as building the arts knowledge graph/ a linked open data cluster) for collective success. 4. Rather than carefully guarding your CRM data inside your organization, it is time to consider the possibility that key assets lie outside your organization, within the shared data across a network of arts organizations… and also in the general population, who are networked already and hungry for entertainment. 5. In the linked digital future, unique features and benefits are still important, but they’ll never be discoverable without linking your creative output to a vast network of performing arts networks that exchange value through their networked audiences via platforms – a strategy that holds the potential to make small niche creators more findable, because of the discoverability of other related groups of linked potential audiences with particular tastes who may not ever otherwise have stumbled upon you. Platforms are tools – the governance models around these tools is something arts organizations and individual artists need to be involved in directly to ensure there will always be a place for free creative expression, and that all are able to make a living through their work. Governance models cannot be left to big global multinationals.
- For those performing arts organizations who have already taken the Digital Maturity Assessment available on the Linked Digital Futures website, you may already have some sense of your organization’s digital intensity (the digital tools you’re using and how you use them) and digital capacity (how many team members within your organization have robust digital skills). In addition to this, your organization, through the software programs it uses to manage operations. How interoperable these systems are is another question. Does your CRM tool exchange data with your accounting tool, for instance? There’s a whole new vocabulary that comes with a digital transformation. This part of our shared digital literacy journey.
- In the analog world, public consultation, surveys, CRM data, and accounting data don’t necessarily cross-reference. It could take weeks to perform the necessary analysis and cross-check the data gathered to ensure reliable datasets and conclusions. Human hours = expensive and time-consuming. // Digital transformation means access to data generated both inside and outside your organization. You might have a dashboard (API) that cross-references your internal data with data you’re gathering on new audiences that are beginning to develop around new creative outputs Your analog hodgepodge of network files holding uncorrelated data may be a storage and management nightmare. // The data visualizations on your sweet new API dashboard might give you new, strategic insight into where your new audiences are most likely to develop, and to develop creative content and marketing strategies tailored to these new audiences and their networks. 3. / 4. / 5. Currently, your data may live in some of the following structured data silos inside your organization: HR / CRM / Accounting / Social media. Chances are, this data sits in relational databases. The data might be used to optimize processes in each operational category. // A digital transformation offers an organization access to unstructured data in a knowledge graph that includes data from outside your organization. Internally, a higher degree of interoperability within your internal datasets complements the external data and offers greater strategic insight, which in turn becomes an intangible asset for value creation.
- 1. Digital transformation starts at home. Internally, improve digital intensity by getting cross-pollination and dashboarding going between your internal silos. This will improve strategic insight at the ground floor. Ensure that your team gets the training they need to fire on all cylinders; this protects the organization when resources move on to other positions, and increases the sector’s general digital capacity. 2. Once your interoperability house is in order, the next step is learning to gather data outside your organization to build new audiences. Cross-referencing 3. Finally, harness the power of co-opetition. Build communities of practice around shared data and linked open data strategies to build the knowledge graph, increase the discoverability of all small, medium, and large creative organizations and individual operators by networking your networks…which helps new desire lines from audiences you have yet to get to know beat a path to your door… which in turn may shift your creative strategies and value proposition.
- This section of Rogers’ method is where the arts sector needs to innovate its own methodologies. Rapid prototyping works well for software development and even for manufacturing, but the creative process is very particular. It is important to at least examine the full list of elements presented by Rogers to determine what elements to keep, and doesn’t serve the creative process. Decisions made based on intuition and seniority – this is where we might recognize Artistic direction and traditional hierarchies around the creative process. Testing and validating…this happens in the creative process often. Perhaps we might ask ourselves who is invited to do it, and in reciprocal relationship with which audiences? How do we question the assumptions behind old creative paradigms and make space for new approaches, and perhaps other world views? Testing – in a traditional arts producing organization, we know how long development of new work takes, and how long it takes to mount a first production. How then, in the performing arts, might we leverage digital technology to engage in rapid prototyping at lower cost? Experiments conducted infrequently, by experts – this is how most arts producing organizations (particularly larger arts organizations) have experimented in the past. Sometimes at great impact to bottom lines. In lean times, when funding is slender, tried and true winners that ensure a healthy bottom line tend to get programmed. But in the digital space, access to cheap tools (iphone video, online collaboration tools, creation applications, and more) and free means for dissemination have led to a flourishing and democratization of who gets to create and experiment artistically. Not all of it is good, but sometimes it can be both excellent and wildly popular. We can learn a lot by looking at what is doing well in creative experiments beyond our our own creative environments. Creative risk has traditionally carried direct risk to the survival of arts organizations, with larger organizations tending to take less risk because of huge infrastructure and resource costs maintained year over year. Smaller organizations tend to have a little more nimbleness, and yet the need to thrive is equally challenging. Engaging in a networked reality where one is listening to new potential audiences means that there is opportunity to address different questions and dynamics through the work, and that this work might meet new audience(s) that find the work relevant, and therefore declare loyalty and advocate among their neworks (which also have networks) on the excellence of the work. The transition from a risk-averse to a risk-friendly culture is something most arts organizations would embrace, since creative self-expression carries risk more often than not. If digital transformation offers the possibility to take more risk in the work produced with fewer financial repercussions on the organization itself, imagine how good that could be.
- And now we arrive at the heart of the matter – the driver behind the actions and decisions we take every day: value(s). It’s why art matters. With every great change in our society – the Rennaissance, the Enlightenment, the Industrial Revolution, and now the Digital Transformation – shifts that are often 300 years in the making – art has been right there, setting markers, commenting and illuminating the great questions of our time. Today we are going to do a couple of hands-on exercises to examine how your organization’s value chain is working and where it might go.
- Value = excellence, and who determines excellence in the arts and culture sector – well, we’ve been examining colonial assumptions in the post-colonial context in the arts for quite some time now, and it is clear that who decides it and how it is shaped needs to change. Digital transformation and the iterative, reciprocal relationship with audience that is part of that shift tilts us towards audience needs. Not necessarily what is popular…but what is meaningful. Because art is about generating meaning, and what has meaning changes with our context. In an analog model, the past or current values continue to be reproduced without question or challenge. Digital transformation provokes queries and deep listening to audience, where what has value and meaning has its source in audience(s) themselves. If it’s not broken, don’t fix it. And yet, we all know that if something doesn’t change soon, our aging audiences won’t be replaced by new faces. Active evolution is essential. If we don’t work hard to anticipate what is needed to stay ahead of the curve, we’re in trouble. Attitude to change is also key. If we see change soley as a threat to the success of an old model, we’re missing the boat on examining how that change might be the gateway to building our next success(es). If we rely on past success to inform the next success, we become complacent, stale, and irrelevant. If we anticipate where we’re going, generate shared value, and move bravely into new spaces, we generate success on ever-evolving terms, and we stay fresh and relevant.
- Let’s stop here to do an exercise together. We’re going to map your arts organization’s established value chain. PASS OUT FIRST BATCH OF ENVELOPES Each of you has received an envelope that contains three blue post-its, one green post-it, two blue arrows and one yellow arrow stickies. (READ INSTRUCTIONS STEP BY STEP, slowly) At the end of the exercise, ask 2-3 participants to share their value chain with the group.
- Consider these elements and how they might affect how your arts organization in the future through a digital transition. How would these elements play out if you integrated them into how your arts organization operates and generates new creative content for its audience? How would your audience(s) change? How would the concept of excellence or value shift? What needs to stay as is? Dare to experiment a bit here, and take some wild risks…we’re just prototyping, and there’s no risk in a bunch of sticky notes PASS OUT SECOND BATCH OF ENVELOPES
- As you begin to map your organization’s possible new value chain, pay attention to the following elements READ SCREEN ELEMENTS SLOWLY, and HOLD UP THE ELEMENTS ONE AT A TIME Focal organization = BLUE POST-IT + draw a border on it Value exchange = Yellow paper sticky tabs: add arrow and description of the element of value exchanged between the bodies. Symmetric competitors: like organizations (pink rectangle stickies) Asymmetric competitors (green rectangles) ASK 2-3 participants to share their model with the group
- Now it’s time to think about the context your organization operates within. All around you there are potential partners, collaborators, funding sources, and expertise. Change is hard. It takes time, resources, commitment and community support. We’re in this together, and together we can build a new paradigm that doesn’t repeat the imbalances the old system was laden with. We might make fresh mistakes, but there’s opportunity here for the arts sector to seize creative freedom in building new creation paradigms, governance frameworks, and business models.
- The Linked Digital Future initiative is led by CAPACOA – the Canadian Arts Presenting Association, in collaboration with: Culture Creates RIDEAU Bern University of Applied Sciences BC Alliance for Arts and Culture Mass Culture Atlantic Presenters Association The Linked Digital Future initiative is made possible thanks to funding from the Government of Canada and the Canada Council for the Arts.