The No.1 issue for most business executives is ‘the sustainability of their business model’. In other words, they are asking the question ‘is my business model going to be disrupted anytime soon?’
They point to Uber, AirBnB, Amazon etc as great examples of new business models and talk about transformation to a ‘platform’ or ‘flywheel’ model as an imperative.
The trouble is that the companies mentioned are digital natives. They didn’t transform their business model – they were always online platform models . They transformed their industry but not their own model.
Finding organizations that have completely flipped their model is difficult. A lot have transformed components of their businesses through acquiring or developing digital components that impact the customer experience or make them omni-channel rather than purely physical.
So the question is, ‘do you need to completely transform your model?’ The answer? It depends- depends on your industry/sector/business and who your are competing with.
A number of organizations are doing incredibly well by taking on the challenge of a disruptor.
They understand the need to transform but also understand:
– what part of their organization they need to transform to compete, and
– how to leverage their traditional strengths and competencies.
Walmart is a great example. You could argue that they had more to lose than most from the rise of Amazon. Yet, they set out to bring technology into the heart of their business and become truly Omni-channel while leveraging their huge strengths of store coverage, distribution network and buying power. The acquisition of technology and platform businesses into the Walmart business has been successfully achieved.