Cisco Spends $10m on Researching Digital Disruption with IMD

IMD's Michael Wade is in celebratory mood. This week sees the school host its annual flagship program, Orchestrating Winning Performance (OWP)of which he is program director. OWP is where 300 senior executives come to the school’s small but elegant campus  on the edge of Lake Geneva to take part in five days of programs run in various streams. With participants coming from all corners of the globe for this event, Australia, Thailand, the Gulf, Zambia,  Brazil, and many others as well the USA and across Europe, and representing a diversity of public sector organizations and plethora of industrial sectors the program is a huge melting pot of senior management – fulfilling the primary purpose of open enrolment programs to give participants not only the benefits of the academics' research and teaching but also a unique breadth of peers to engage and exchange experience with.

IMD is unusual as a top-ranked business school with its heavy focus on executive education, where its open programs have taken home the top prize in the FT rankings for the last four years, and simultaneously topped the combined rankings for exec-ed since 2008. Having been founded through the merger of Nestle and Alcan’s management institutes in 1990 IMD has always had a strong connection with the corporate world. Today this is continued, not least with the six-strong team of executives-in-residence, including the likes of the former CEO of Stora Enso, the former Group Marketing Director of British American Tobacco, and former Head of Nestle China. Also amongst this group is Thierry Maupile who continues as Head of the Strategic Ecosystem Group at Cisco as well as his role at the school.

Michael Wade's celebratory mood at IMD this week was not just for the OWP however. The school has also announced a $10 million partnership with Cisco, to launch and fund for five years a new research centre into digital transformation, of which he is the new director and Cisco chair.

In a series of meetings on Wednesday Prof Wade, as the newly anointed Director of the Global Center for Digital Business Transformation (DBT Center) and Cisco Chair of the same, along with Dominique Turpin, President of the School, Martin McPhee, SVP of Cisco Consulting Services and Thierry Maupile explained the thinking behind and plans for this new centre.

“Digital Business Transformation” is the organizational change that is effected by digital disruption. A Gartner report in 2014 suggested that in five years’ time, 2020, 75% of businesses will be digital or have digital initiatives underway – but only 30% of those efforts will be successful. The DBT Center will work to show organizations how to both accelerate the current market transition to digital and – crucially – how to cope and defend themselves from the swarm of upstart competition that digital disruption inevitably brings.

Unusually, with the launch announcement for the new centre there was also an initial piece of research that positions the current context of the digital business market dynamics. With a survey of 941 business leaders worldwide across 12 major industries the DBT has launched its first report “The Digital Vortex: How Digital Disruption is Re-defining Industries”.

The survey respondents believed that an average of 40% of today’s top 10 incumbents (by market share) in each industry will be displaced by digital disruption in the next five years. Despite this 45% of corporate boards give the issue little focused attention, with a further 33% taking a ‘wait and see’ approach’ and only 25% describing themselves as proactive – willing to disrupt themselves in order to compete.

The industries most at risk from this whirlwind of change are graphically illustrated in the report’s ‘vortex’ diagram.

 
Cisco have agreed to contribute $10 million over five years to the DBT Center initiative, including funding the Chair. IMD will lead the research from the centre’s location on campus in Lausanne, but drawing on Cisco’s expertise on the ‘Internet of Everything’, the networked connection of people, process, data and things; with the school bringing its applied research and developing global leaders and focusing on organizational change brought about by digital disruption.