Value Design32% of the exam
External context: digital transformation and social impact
The external forces a strategy must answer to: the pace of the Fourth Industrial Revolution, the three traits of digital transformation (design first, culture, speed and agility), the shift from shareholder primacy to stakeholder capitalism and sustainable business, and designing for protagonists, social context and externalities.
Given a scenario, explain how key external context for innovation might influence or impact the organization's strategy.
~8 min read · 16 practice questions ·
What the exam expects
- Explain why the speed, breadth and systems impact of the Fourth Industrial Revolution rule out a fixed, slow-moving strategy.
- Name the traits nearly all digital transformations share and correct a technology-only or release-cadence-only plan.
- Contrast shareholder primacy with stakeholder capitalism, and describe a sustainable business.
- Recognize protagonists, social context, social dynamics and externalities in a scenario and widen the strategy to account for them.
- Recommend customer and behavioral data and external research over internal history alone.
- Key terms: Fourth Industrial Revolution (change transformative in speed, breadth and depth, and systems impact); design first (prioritizing empathy for end users); stakeholder capitalism (benefit for all stakeholders, not only shareholders); protagonist (a user as a principal character within a larger network); externality (people or groups who never asked to be involved but are affected).
Key facts
Fourth Industrial Revolution
- Detail
- Speed, breadth and depth, and systems impact of change
Pace comparison
- Detail
- Steam: over a hundred years; mobile phones: just over 10 years
Three shared traits
- Detail
- Design first, culture, speed and agility
Agility means
- Detail
- More than frequent releases: rethink operational structure
Personalization
- Detail
- Better outcomes than standardized delivery
Shareholder primacy
- Detail
- Friedman, 1970: maximize profits for shareholders
Stakeholder capitalism
- Detail
- Customers, employees, suppliers, communities and shareholders
CEO sustainability priority
- Detail
- Over half of companies in 2019, up from 37% in 2015
Externality
- Detail
- Groups who never asked to be involved but are affected
SWOT quadrants
- Detail
- Strengths and weaknesses internal (controllable); opportunities and threats external
- What did Toyota Financial Services change in its call center?
- Why is sustainable business aligned with Relationship Design?
- When was Milton Friedman's shareholder-primacy essay published?
- Why does a phone notification in a library illustrate both social context and social dynamics?
The questions are free to read. Answers with their sources and self-grading are included with the pack.
Keep reading with the Platform Strategy Designer pack
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The pack includes:
- All 17 lessons of the Platform Strategy Designer guide, with reading progress
- Interactive decision walks and step-by-step sequence steppers
- Practice exams purchase adds inline bank questions and topic practice (16 questions for this lesson)
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