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©Deloitte - [email protected] - 2019-02-05 Family Business Conference

amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

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Page 1: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

©Deloitte - h

[email protected] -

2019-02-05 Family

Business Conference

Page 2: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

©Deloitte - h

[email protected] -

2019-02-05 Family

Business Conference

Page 3: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

©Deloitte - h

[email protected] -

2019-02-05 Family

Business Conference

Page 4: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

©Deloitte - h

[email protected] -

2019-02-05 Family

Business Conference

Page 5: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

©Deloitte - h

[email protected] -

2019-02-05 Family

Business Conference

Page 6: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

Rewire your DNA

©Deloitte - h

[email protected] -

2019-02-05 Family

Business Conference

Page 7: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

Rewire your DNA

twitter: hvangrie mail: [email protected]

Hans van Grieken Fellow Center for the Edge

EMEA Technology Research Leader Executive Lecturer Nyenrode Business School

Supervisory Boardmember Priva Holding

Allow me to shortly introduce myself …

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2019-02-05 Family

Business Conference

Page 8: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

Rewire your DNA

I have been a Supervisory Boardmember to Family businesses since 2007, currently at Priva ….

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2019-02-05 Family

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Page 9: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

Rewire your DNA

Priva is the world market Leader in Green-House Climate Controls …

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2019-02-05 Family

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Page 10: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

Rewire your DNA

The company - for instance - also delivered the Digital Building Management System Technology for St Paul’s Cathedral

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2019-02-05 Family

Business Conference

Page 11: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

Rewire your DNA

During my tenure the company value shifted from Products to Services, Data and the Algorithms …

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2019-02-05 Family

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Page 12: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

Rewire your DNA

I am also the proud dad of 2 entrepreneurial “tech-nerds” that think that I represent the “old IT world” whereas they are “re-inventing the technology market” …

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2019-02-05 Family

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Page 13: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

Rewire your DNA

They think differently, they operate differently, they use technology differently. Their DNA = Digital …

• The Alliance will utilise Android, world’s most popular operating system, to offer customers a new array of services including Google Maps, the Google Assistant and the Google Play Store

• These services will be combined with Alliance Intelligent Cloud based remote software upgrades and vehicle diagnostics

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2019-02-05 Family

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Page 14: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

What is “Digital DNA” … ?

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2019-02-05 Family

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Page 15: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

©Deloitte - h

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2019-02-05 Family

Business Conference

Page 16: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

What Digital DNA Archetypes did we find based on 13 DNA characteristics?

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Page 17: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

Characteristics of Laggards

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Page 18: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

Characteristics of chasers

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Page 19: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

Characteristics of Fast Moving Experimenters

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Page 20: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

Characteristics of Talent & Strategy Leaders

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Page 21: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

Rewire your DNA

Digital Disruption is all over the place. Can you anticipate … ?

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2019-02-05 Family

Business Conference

Page 22: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

©Deloitte - h

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2019-02-05 Family

Business Conference

Page 23: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

At Deloitte’s Center for the Edge we did some extensive research into Disruption …

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Page 24: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

… and we identified nine patters of disruption that - in most cases - are Digitally Enabled

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Page 25: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

Rewire your DNA

The research takes 3 different perspectives on each of these 9 Patterns of Disruption

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Page 26: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

Rewire your DNA

The research takes 3 different perspectives on each of these 9 Patterns of Disruption

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Business Conference

Page 27: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

Rewire your DNA

Here’s a manifestation of a Digitally enabled Disruption taking place as we speak …

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2019-02-05 Family

Business Conference

Page 28: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

Rewire your DNA

Software and Data Networks and Interactions

Assets and Physical Goods People and Services

Digital Devide

Industrials Hospitals

Hotels

1Consultants Financial Services Insurance

2

Biotechnology Software

Pharmaceuticals

4 Platforms Social Networks Stock Exchange

8

It is not by accident that a lot of our clients are (considering) entering the “Platform Play” …

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2019-02-05 Family

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Page 29: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

Here’s what our Deloitte colleague William Ribaudo had to say about his Research …

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2019-02-05 Family

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Page 30: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

Rewire your DNA

Software and Data Platforms/Networks and Interactions

Assets and Physical Goods People and Services

Digital Devide

Industrials Hospitals

Hotels

Biotechnology Software

Pharmaceuticals

Consultants Financial Services Insurance

Credit Card Comp Social Networks Stock Exchange

1-2 2-4

4-8 8-15

Let that sink in for a moment: “The Value that Wall Street is willing to pay ranges from 8 to 15 times your Revenue … “

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2019-02-05 Family

Business Conference

Page 31: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

Decide on Where you want to Play and How you want to Win with “Digital” …

WH

ERE

TO P

LAY

(MAR

KETS

& C

UST

OM

ERS)

AD

JACE

NT

EXIS

TIN

GN

EW

EXISTING INCREMENTAL NEW HOW TO WIN (PRODUCTS & ASSETS)

TRANSFORMATIONAL Developing breakthroughs and inventing things for markets that don’t yet exist

ADJACENT Expanding from existing business into “new to the company” business

CORE Optimising existing products for existing customer©Deloitte

- hvangrieken@deloitte

.nl - 2019-02-05 Family

Business Conference

Page 32: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

WH

ERE

TO P

LAY

(MAR

KETS

& C

UST

OM

ERS)

AD

JACE

NT

EXIS

TIN

GN

EW

EXISTING INCREMENTAL NEW HOW TO WIN (PRODUCTS & ASSETS)

ADJACENT

TRANSFORMATIONAL

CORE

Average activity in a

balanced portfolio

10%

20%

70%

TRANSFORMATIONAL

ADJACENT

CORE

Decide on Where you want to Play and How you want to Win with “Digital” …

©Deloitte - h

[email protected] -

2019-02-05 Family

Business Conference

Page 33: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

WH

ERE

TO P

LAY

(MAR

KETS

& C

UST

OM

ERS)

AD

JACE

NT

EXIS

TIN

GN

EW

EXISTING INCREMENTAL NEW HOW TO WIN (PRODUCTS & ASSETS)

ADJACENT

TRANSFORMATIONAL

CORE

Average return on a balanced

portfolio

10%

20%

70%

Average activity in a

balanced portfolio

10%

20%

70%

TRANSFORMATIONAL

ADJACENT

CORE

Decide on Where you want to Play and How you want to Win with “Digital” …

©Deloitte - h

[email protected] -

2019-02-05 Family

Business Conference

Page 34: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

There are Ten Types of Innovation, relating to Configuration, the Offering and the Experience

Network Connections with others to create value

Process Signature or superior methods for doing your work

Product System Complementary products and services

Channel How your offerings are delivered to customers and users

CustomerEngagement Distinctive interactions you foster

Profit Model The way in which you make money

Structure Alignment of your talent and assets

Product Performance Distinguishing features and functionality

Service Support and enhancements that surround your offerings

Brand Representation of your offeringsand business

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Page 35: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

Not surprisingly, the innovations that the average innovator tends to pursue are typically focused around products

Source: Deloitte Monitor/Doblin

100

0

Relative incidence

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Page 36: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

Profit Model innovations convert offerings and other sources of value into cash. Here’s an inventory of proven area’s for innovation in the Profit Model …

Ad-Supported Provide content or services for free to one party

Auction Allow a market to set the price for goods and services

Bundled Pricing Sell in a single action two or more items & sold as standalone offering

Cost Leadership Keep value costs low and sell high volumes at low prices

Disaggregated Pricing Allow customers to buy exactly what they want

Financing Capture revenue from structured payment plans & after-sale interest

Flexible Pricing Vary prices for an offering based on demand

User-Defined Invite customers to set the price they wish to pay

Float Receive payment prior to building offering

Forced Scarcity Limit the supply of offerings available, by quantity time frame, or access

Freemium Offer basic services for free while charging e.g. a premium special features

Installed Base Offer a “core” product for slim margins to drive demand and loyalty

Licensing Grant permission to a group or individual

Membership Charge a time-based payment

Metered Use Allow customers to pay for what they use

Switchboard Connect multiple sellers with multiple buyers

Microtransactions Sell many items for as little as a dollar to drive impulse purchase

Premium Price at a higher margin than competitors usually e.g. for a superior product

Risk Sharing Waive standard fees or costs if certain metrics aren’t achieved

Scaled Transactions Maximize margins by pursuing high-volume, large-scale transactions

Subscription Create predictable cash flows by charging customers upfront

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Page 37: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

The average innovator tends to pursue no more than 1 or 2 types of innovation

Source: Deloitte Monitor/Doblin

Number of companies

Average number of types integrated:

1.8 types

175

0

140

105

70

35

12% 72% 15% 1%

0 Types 1-2 Types 3-4 Types 5+ Types

84%

0–2 Innovation Types

16 % 3–10 Innovation Types

Average number of types integrated:

1.8 types

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2019-02-05 Family

Business Conference

Page 38: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

Successful innovators find ways to integrate twice as many types of innovation

Source: Deloitte Monitor/Doblin

Number of companies175

0

140

105

70

35

0% 29% 45% 26%

0 Types 1-2 Types 3-4 Types 5+ Types

29 % 0–2 Innovation

Types

71% 3–10 Innovation Types

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2019-02-05 Family

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Page 39: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

Uber innovates by integrating many known things, but with elegance and insight

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2019-02-05 Family

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Page 40: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

Rewire your DNA

As you increase in your level of ambition, you need to be more disruptive to existing business models and need to think about combining innovation types

FOR TRANSFORMATIONAL INNOVATION You will need coordinated innovation across multiple (4+), interdependent types. Classic example of a breakthrough is the iPhone

FOR ADJACENT INNOVATION You’ll need innovation within multiple types (3-4) around a new market offer. Classic example is Starbucks’ Frappucino

FOR CORE INNOVATION For innovation in the core, you will be innovating within independent innovation types around existing offers aimed at current customers. Classic example is new colors of Post-it Notes

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Page 41: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

Rewire your DNA

Yet, in some cases the Family “Immune Systems” can be THE “killer-bug”, NOT the Market …

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Page 42: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

Rewire your DNA

I II III

IV V VI

For years, a company runs a successful business, however returns are declining, and new players are entering the market, with business models based on new technology.

In order to create value from new business models and technology, a new entity (an “Edge”) is created on the edge of the core.

The Edge start experimenting, partnering in ecosystems. Experiments are small and get (too) far from the core business

After learning from experiments, the Edge “nails” the new business. To scale fast, a.o. corporate venturing is applied. Credible commitments are made by acquiring businesses closer to the core.

The Edge and the new acquired entities become one. The Edge pulls resources from the core and outside.

The Edge is no longer an Edge but a new “division”. The decreased old core has transformed towards the Edge, both together are a new (improved) core, scalable learning is applied.

Introducing Edge Plays …

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Page 43: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

Rewire your DNA

We call them Edge Plays or Nightmare Scenario Competitors …

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Page 44: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

Anybody can start a Start-up … . But can you Scale It too …?

400.000 Startups from 24 countries

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Page 45: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

1M+ 0,5M-1M 250K-0,5M <250K FAILED

Percent of all startups in USD revenue bandwidth Percent of all startups in revenue year

Revenue Year

Evolution of Revenue Distribution of All Startups

Source: Deloitte extensive startup dataset: team analyses

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Page 46: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

Percent of Surviving Startups

Revenue Contribution of Fast Growers Compared to Slow Growers 5th year of Revenue in Euro’s

Percent Total Revenue generated by Startups

Source: Deloitte extensive startup dataset: team analyses

<.25Mln .25-10Mln >10Mln0,25%

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Page 47: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

Main conclusions based on researching 400.000 Startups from 24 countries

Only 1 out of 200 becomes a Scale-up >10 million USD within 5 years

Most all Scale-Ups are Led by Experienced Entrepreneurs in their late thirties or early

forties

The founders of the majority of unicorns have twice as much work experience as

startup founders

More than half were founded by Teams

Only 25% of Startups were designed to Scale

Timing is everything: Market Entry is twice as long for Scale-ups as for Start-ups

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Page 48: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

About Timing: % of Unicorns successfully “riding” a particular “wave” …

Think of Xiaomi riding the smartphone wave; Uber riding the sharing economy wave; Palantir riding the big data wave; SpaceX leveraging the discontinuation of the space-shuttle program.

No Wave Secondary Wave Primary Wave

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Page 49: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

Rewire your DNA

Senior Generation to Children: “First prove you can run this Family Business, then we’ll talk about “Digital” …

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Page 50: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

Rewire your DNA

Children to Senior Generation: “we need to EMBRACE the next Wave Digital Opportunity when it presents itself … and find out as we go …”

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2019-02-05 Family

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Page 51: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

@ Deloitte we annually produce a number of Global “flagship Eminence Publications” geared at our clients to help them better understand the implications of Digital Transformation …

Global Technology Trends Digital DNA/MIT Sloan Global CIO Survey

Digital Technology Operating Models

Outsourcing Survey

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2019-02-05 Family

Business Conference

Page 52: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

Rewire your DNA

Feel Free to Reach out to me

twitter: hvangrie mail: [email protected]

Hans van Grieken Fellow Center for the Edge

EMEA Technology Research Leader Executive Lecturer Nyenrode Business School

Supervisory Boardmember Priva Holding

©Deloitte - h

[email protected] -

2019-02-05 Family

Business Conference

Page 53: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

Rewire your DNA

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2019-02-05 Family

Business Conference

Page 54: amily Business Conference · Rewire your DNA They think differently, they operate differently, they use technology differently. Their DNA = Digital … • The Alliance will utilise

©Deloitte - h

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2019-02-05 Family

Business Conference