At the Center for Business Modeling, we sometimes travel around the world to find business thinkers that underscore our philosophy for business models. This time, a Professor at New Zealand’s Massey School of Business, Leslie Warren, was the visionary that caught our eye. Listen:
- “Businesses must reward experimentation…and create a safe space for failure.”
- “We have to get over the idea that entrepreneurs are born that way.”
- “Businesses must foster a culture where enterprising behaviors are rewarded.”
Very perceptive, professor!
You’ve seen us weigh in on business models that are iterative and adaptive in the sense that they respond to customer needs and marketplace pressures. The companies that can build innovation into their business models are those who allow their strategists to “learn to learn from failure,” as Professor Massey urges in her video.
In a recent article in the Economic Times, writer Priyanka Sangani asserts: “The digital economy has resulted in a fundamental shift in how organisations operate, with the focus moving from products and services to experiences and outcomes. Organisations no longer control the conversation and if they don’t keep up with this peer-to-peer economy they risk being left behind.”
“C” Your Way Clear
Melding Professor Warren’s vision with the pressures of the new, digital economy that Sangani warns us of can seem a tall order. But if you focus on three main “Cs” of the new digital economy when building a business model to compete, you will be well on your way to achieving the flexibility you’ll need to win.
Competitors. Watch out because your competitors can turn into partners if you’re wise enough to build a business model that encourages “open innovation.” Professor Warren talks about such collaborations as the next wave of business partnerships—when the new imperatives of this “experience and outcome” economy require us to make friends of former enemies. If a partnerships not in the cards, then be sure to create a plan for regularly reviewing your competitors’ offerings and keeping track of their external presence in the digital space. We’re not saying you have to be a “me too” reactive marketer—just be sure you keep an eye on the other guy and learn from their mistakes—and successes. Use CBM’s SWOT analysis template to begin.
Customers. There’s no excuse—and I mean none—for not knowing your customer these days. What’s got them grinding their teeth in their sleep? What product tweaks can you make to anticipate not today’s pain points—but the pain points of tomorrow? (Everyone else can call these innovations, I’m fine with it.) If you don’t have a good CRM system or processes in place to get your sales teams’ feedback into the marketing strategists’ offices at least once a quarter—you’re missing the signals that can send your profits soaring.
In Sangani’s article, he interviews R. “Ray” Wang, author of the new book, Disrupting Digital Business and the founder chairman of the Silicon Valley based Constellation Research. Wang says that “the toughest shift is focusing on the new business model when the company is comfortable with life as it is. Most companies start with a new team and then try to integrate them back to the core after the first set of successes.” I would suggest a cross-functional team dedicated to the “Customer Experience” so that your business model can benefit from the brainpower of the entire organization. Fast tracking these projects will put you in a good place to compete now and win more customers later. Team members then can start intra-functional, customer-facing projects on this start-up “incubator” model.
Community. I know we are all a little tired of hearing about the differences between “engagement” and “awareness” in our online communities. Sorry, though, my friends: the numbers don’t lie: according to Demand Metric, content marketing generates three times as many leads as traditional outbound marketing, but will cost a company 62% less money.
Content marketing has proven to be a sure fire way to build communities—of suspects, prospects and dare we say, even “brand champions.” A solid program of content can move the needle on community engagement and awareness—if you know where your most impactful communities “hang out.” Do the research, plan on measuring the ROI and get started. As always, you need to be purposeful yet flexible enough to change course if your strategy fizzles. Use CBM’s Business Planning Framework to plan your community engagement projects—just pick a “tile” and get started.
Sangani’s Economic Times article is entitled, “Digital Darwinism is unkind to those who wait—you will be out of business if you wait too long.” I think that’s a little bit too dire of a prediction, because I think most businesses are awake to the possibilities—and perils—of our new world. I think we’re smart enough to “evolve and adapt” before bankruptcy looms. But one thing I do know—things are changing so fast in this digital, uber-connected world—if your business model isn’t able to change with them, it may be in very serious trouble.