Got Digital?: Digital Matters
Dig●it●tal [dij-i-tl] the translation of analog information (numbers, words, sounds, shapes, images, and more) into electronic data that can easily be stored and shared across networks and devices.
. Market Disruption. The digitization of information is upending traditional business models, changing the way people interact. . Publishing: ebooks replacing paper (Borders run out of business) . Retail: online purchasing lowering brick-and-mortar sales . Music: artists selling directly through iTunes
. Universal Impact. Every organization across every industry is impacted in some way. . Marketing: “mass customization” of advertizing . Operations: supply-chain optimization . Customer Service: self-service
. Growing Expectations of Corporate Leaders. Shareholders, employees and customers increasingly demanding that their leaders understand, leverage digital technologies effectively across the business.
1 Got Digital?: “Highly Digital” Defined
“Highly Digital” companies satisfy …and are in short supply. four criteria… “Highly Digital” F500 Companies “Highly Digital” F100 Companies 2% 7%
High % of Digital Revenue
Sitting “Highly Digital” F100 Boards* CEO/Board Digital Leadership Channels 13% Experience
Company Recognized as Transition Leader Highly Digital Board Examples: .Technology: Apple, Cisco, Dell, Google, H-P, Intel, Microsoft, Oracle Highly Digital Company Examples: Amazon, Apple, .Retail: Amazon, Walmart Cisco, Dell, eBay, Google, Microsoft, Oracle, Yahoo, .Financial Services: Berkshire Hathaway seven of which are in the F100. .Consumer: Procter & Gamble .Business Services: FedEx
Source: Russell Reynolds Associates Analysis
2 Got Digital?: Key Findings
. Disruption and digital status linked. For example, Technology and Retail well represented on the list.
. “Non-digital” companies boosting digital board status. For example, Berkshire Hathaway, Procter & Gamble and FedEx.
. Digital Boards Have 3 Common Themes: 1. Commitment: most have 4-6 digital board members, not 1-2. 2. Digital Experience: Experience with companies like Apple, Google, Intuit, Cisco, Amazon, e-Bay, Facebook and Microsoft is highly sought after. 3. CEO Experience: Most digital board members have been CEOs
. 5-10 companies boosting digital board status: . Ingram Micro, Sprint and Disney to American Express, Morgan Stanley, Coke, Pepsi, Sysco and Ford . 1-2 digital directors . Several CEOs who are now board members in highly digital companies: Bill Ford (eBay), Bob Iger (Apple)
3 Got Digital: Trends and Implications for Recruiting Digital Leadership
. The tide is turning. Some of the largest and most successful companies are working to narrow the digital capabilities “gap”.
. Some sectors moving faster than others. . Forerunners: Consumer-facing businesses like technology, media & communications, retail, and financial services. . Gradual Growers: e.g., automotive (e.g. connected vehicles) to B2B markets and services.
. Limited supply driving younger talent from unique sources. . Non-CEOs: e.g. Katie Mitic (Facebook) to eBay and Marissa Mayer (Google) to Walmart . VC/PE backed companies: not just F500 digital companies . Related business that have been through digital transformations
. More selective screening. . Functional experience (e.g. Social media marketing, cloud, mobile) . Transformation experience (pure play versus established company transformation) . Culture fit (mandatory) . Shared vision of making a meaningful impact
4 Got Digital?: Highly Digital Boards in the F100
Company Industry Board Members Digital Credentials
.Tim Cook .IBM, Compaq .Arthur Levinson .Google Apple Technology .Bill Campbell .GO Corp, Intuit .Robert Iger .Walt Disney
.John Chambers .Cisco .Carol Bartz .Yahoo!, Sun Microsystems, Intel, NetApp .Michael Capellas .HP, Compaq, First Data .John Hennessy .Google, Atheros Communications Cisco Technology .Arun Sarin .Vodafone, Infospace, Airtouch .Jerry Yang .Yahoo! .Steven West .nCUBE, Entera, Hitachi Data Systems, EDS .Brian Halla .LSI Logic, Intel, National Semiconductor
.Michael Dell .Dell Dell Technology .James Breyer .Apple, Facebook, RealNetworks, HP .Shantanu Narayen .Adobe, Pictra, Silicon Graphics, Apple
.Larry Page .Google .Sergey Brin .Google .Eric Schmidt .Google, Novell, Siebel, Apple .John Doerr .Amazon, Move.com, Sun Microsystems Google Technology .Diane Greene .VMware, EMC Corp. Sybase, Intuit .Ann Mather .GluMobile, Netflix .Ram Shirarm .Amazon.com, Junglee, Netscape .John Hennessy .Cisco Systems, Atheros Communications .Paul Otellini .Intel
5 Got Digital?: Highly Digital Boards in the F100
Company Industry Board Members Digital Credentials .Meg Whitman .eBay, Walt Disney, Zipcar .Marc Andressen .Netscape, Ning, America Online, eBay Hewlett-Packard Technology .Raymond Lane .Oracle, EDS, Quest Software .Lawrence Babbio .Verizon, Bell Atlantic .Paul Otellini .Intel, Google .Susan Decker .Yahoo!, Pixar, LegalZoom.com Intel Technology .John Donahoe .eBay .David Pottruck .Schwab .Bill Gates .Microsoft, Corbis .Steve Balmer .Microsoft Microsoft Technology .Reed Hastings .Netflix, Facebook .John Thompson .IBM, Virtual Instruments, Symantec .Larry Ellison .Oracle .George Conrades .IBM, BBN, Akamai Oracle Technology .Bruce Chizen .Adobe .Naomi Seligman .Akamai, D&B .Tom Alberg .Advanced Digital Information .William Gordon .EA, Zynga, Callaway Digital Arts Amazon.com Retail .Blake Krikorian .Sling Media, Telescript, Clicker Media .Jonathan Rubinstein .HP, Palm, Apple, FirePower Systems .Patricia Stonesifer .Microsoft, Viacom
6 Got Digital?: Highly Digital Boards in the F100
Company Industry Board Members Digital Credentials .James Breyer .Dell, Apple, Facebook .Michele Burns .Cisco Wal-Mart Retail .James Cash .Microsoft .Marissa Mayer .Google .Gregory Penner .Baidu.com, 99Bill Corp. .Stephen Burke .Comcast, NBC Universal, Walt Disney .Susan Decker .Yahoo! , Pixar, LegalZoom .Bill Gates .Microsoft, Corbis Berkshire Hathaway Financial Services .Charlotte Guyman .Microsoft .Donald Keough .IAC/InterActiveCorp., Convera .Thomas Murphy .DoubleClick, Walt Disney .Walter Scott .Level 3 Communications
.Scott Cook .Intuit, eBay Procter & Gamble Consumer Goods .Jonathan Rodgers .TV One, Discovery Networks, Comcast .Meg Whitman .eBay, Walt Disney, HP, Zipcar
.James Barksdale .Netscape .John Edwardson .CDW FedEx Business Services .Shirley Ann Jackson .IBM, NYSE Euronext .Gary Loveman .Ceasars Entertainment
7 Got Digital?: F100 Boards Addressing the “Digital Gap”
Company Industry Board Members Digital Credentials .John Ingram .Ingram Content Group, Ingram Digital .Scott McGregor .Xerox, Microsoft, Digital Equipment Corp. Ingram Micro Technology .Alain Monie .Amazon.com .Linda Levinson .Connexus, American Express, Demandtec .Daniel Hesse .Sprint, ATT .Robert Bennent .Discovery, Demand Media, Liberty Media Sprint Nextel Media & Communications .Frank Ianna .Attila, AT&T, Tellabs .William Nuti .NCR, Cisco .Robert Iger .Apple Walt Disney Media & Communications .Judith Estrin .Cisco, FedEx .Sheryl Sandberg .Facebook, Google, eHealth, Starbucks .Peter Chernin .News Corp, E*TRADE, Sky Global American Express Financial Services .Ted Leonsis .Mobile Posse, America Online, LaunchBox .Charlene Barshefsky .Intel .Roy Boystock .Yahoo!, B/Com3 Morgan Stanley Financial Services .Erskine Bowles .Facebook, Belk .Donald Nicolaisen .Verizon .Gordon Bethune .Sprint Nextel Prudential Financial Financial Services .Gilbert Casellas .Dell, Q-Linx .William Gray III .Dell
8 Got Digital?: F100 Boards Addressing the “Digital Gap”
Company Industry Board Members Digital Credentials
.Robert Kotick .Activision Blizzard Coca-Cola Company Consumer Goods .Barry Diller .IAC, Expedia, TripAdvisor, Live Nation
.Shona Brown .Google PepsiCo Consumer Goods .Dina Dublon .Microsoft
.Manuel Fernandez .Gartner, Harris Corp. DataQuest Sysco Business Services .Jackie Ward .Digg, Computer Generation, Sanmina SCI .William Clay Ford. Jr. .eBay Ford Motor Automotive .William Helman .ZipCar .Ellen Marram .Fedex, NYTimes
*Based on RRA analysis of F100 boards ranking by digital operating experience on individual board members.
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