A Greek philosopher is credited with the having coined the phrase “change is the only constant in life.” However, today change is not a constant; change is an accelerating factor in virtually all aspects of business. This of course is creating many new kinds of opportunities. But it is also threatening many business models. This means all CEOs and other business leaders must continuously look ahead and ask: “Is our current business model one that can survive long term?”
Threats of Business Model Disruption are Real
Disruption may be viewed as a buzzword by some, but the best business leaders realize threats of disruption are real.
Therefore, today’s business leaders must do more to:
> Anticipate and evaluate how things are or will be changing
> Rethink existing business models that may be at risk
> Develop resilient business models that can survive into the future
Accelerating Change and Unseen Threats
Here are just a few of the kinds of market drivers that are accelerating change and necessitating a rethink of current business models, even those that are highly successful today.
> Information technologies served up in the cloud, consumed as needed, and priced accordingly
> New kinds of participation models that are emerging across value chains and ecosystems, and among businesses of all kinds
> The explosion of data and the use of analytics and AI both within and among companies of all kinds – from high-tech to high-touch businesses, from small to large, from local to global
> The spread of the Internet of Things (IoT) and the growing unseen challenges that come from using and operating on many kinds of technologies and platforms
> Robotics, analytics and machine learning which are changing how businesses, their customers, and their partners work
> Changing customer expectations and perceptions of value received from products or services
> Changing economic and financial realities as new business models evolve and reshape where and how work gets done and how value gets exchanged.
What Should You Do To Rethink Your Business Model
The key word you need to think about is resilience. “There’s a deepening appreciation that we’re living in a time of increased, intrinsic volatility,” says Andrew Zolli, co-author of Resilience: Why Things Bounce Back. Today, says Zolli, it has become essential for companies “to become more agile – not just in the face of the risks we know, but in the face of the ones we won’t see coming.”
A resilient business model is one that can both survive and thrive. To survive, a business model must be lean and flexible enough to deal effectively with change, threats, and risks – both external and internal. To thrive, a business model must be able to meet the changing needs and preferences of customers as well as those of partners and other stakeholders.
Therefore, we recommend the following:
1. Identify your business model options. A business model describes how a company creates, delivers, and realizes value. While the definition is simple, the process of defining, selecting and wisely implementing a business model that will be resilient in the face of rapid change is anything but simple. Whether yours is a startup, a company on a growth trajectory, or a mature firm that needs to evolve, a business model rethink could mean the difference between sustainable success and a nasty surprise.
2. Look for high-value, non-obvious options for growth and business model resilience.For over 25 years, TGG has been providing growth strategy services to firms across a wide range of industries. Through experience we know that the most successful strategies and business models are those that are non-obvious. Finding the non-obvious takes research, collaboration, and creative thinking.
3. Plan for change, not just for implementation.Whether a company needs to change its existing business model or implement a new one, rapid but careful planning is a must. A good plan is only possible if there is a smart strategy to guide planning and execution.
4. Build essential relationships. You must understand how to develop, negotiate, implement and manage relationships – with channel partners, key customers and other kinds of third parties. This is critically important now as business environments change, and as the demand for more and deeper networked relationships grows.
The Need for Perspective and Insights
Perspective requires seeing things from many angles and through many lenses. Insights require analytic thinking based on skill and experience.
As a CEO or other business leader responsible for business model definition, implementation, and execution, your greatest assets could well be your trusted advisors. Use them, use us. But use someone. These are the team members who will help you see the whole field of play, understand the capabilities of all the players on the field, determine possible plays (yours and for others), and the assess probable outcomes.
Bottom line: Don’t go it alone. Don’t believe what you do today will work tomorrow. Change is too pervasive, and today’s business environment is simply too risky. Anticipate. Rethink.