Get real about rethinking your business model

woman leads business meeting

Why do all tech talks all sound the same?

I’ve had to listen to them since the late 1990s and they haven’t changed in terms of themes or structure. It’s often about how some major tech trend will “completely disrupt/transform/creatively destroy business as we know it”. They said that about Y2K, Windows 95 and even Palm Pilots. I grew cynical. And I wasn’t alone – many companies didn’t take it seriously. Email and spreadsheets were nice but it didn’t feel like the tech tsunami we were promised.

And it wasn’t as if companies have been idle.

They were investing significantly into operations improvements, developing products and entering new markets. I spent several years working with major telecom companies improving their call centers and field operations in several countries. Senior management understood the importance of adapting to change, and many undertook what they believed were radical transformations. But if we were all honest with ourselves, much of it never involved a fundamental rethink of the entire business model. Retail stores were more pleasant, customer service improved, and cell phone plans did get better.

Even companies that have long been resistant to change in such sectors as banking and mining are now undergoing major digital transformations.

However, it’s different now. Very different. Even companies that have long been resistant to change in such sectors as banking and mining are now undergoing major digital transformations. Experts and consultants are occupied and the rush for tech talent is at a frenzy.

Those of us in traditional industries, as opposed to the tech giants of today, have seen the future. If we want to survive, every one of us will have to rethink our approach to serving our customers completely. Our anxiety is understandable. Yale’s Richard Foster predicts that by 2027, more than 75 percent of the S&P 500 will comprise of companies that are yet to exist.

What has changed?

In the past ten years, I’ve worked with global conglomerates, venture capital funds and start-ups. I’m currently helping to lead the digital transformation of my own institution. Being on the frontline and in the rooms where decisions are made, I believe that there are three major reasons why companies have embraced digital transformation.

It begins with our customers – their expectations have transformed completely. They won’t transact business with companies that refuse to adapt to their expectations. Customers demand very high-quality customer service, unlimited inventory and near-instant delivery. If I can order dinner, get a ride and find a place to stay for the evening all from my phone, then I expect the same from nearly every service provider in my life.

a beautiful constraint book cover
Adam Meyer and Mark Borden, A Beautiful Constraint, 2015

In “A Beautiful Constraint”, Adam Meyer and Mark Borden called this phenomenon “Uber’s Children”. Consumers are demanding the same level of convenience and cost from everyone. And they’re not shy to express their dissatisfaction.

Then it shifted to who our competitors were. Very few of us would think that the likes of Alphabet, Amazon and Microsoft would enter into nearly every major sector of the economy such as telecom, financial services, and even supply chain logistics. With my own team, I tell them that our biggest concern is our clients securing business loans while shopping for supplies on Amazon. The fact that tech companies have grown from 16 percent to more than a quarter of the S&P 500 market cap is clear evidence that they are winning at our expense.

The last key driver is the massive amount of venture capital invested in the last 10 years. According to Pitchbook, almost $400 billion was invested in start-ups since 2015 alone and that’s just in the U.S. These start-ups have the technical and financial resources to attract the most innovative business models and the most talented tech and design workers in the world away from those of us in traditional industries.

Start-ups have the technical and financial resources to attract the most innovative business models and the most talented tech and design workers in the world away from those of us in traditional industries.

New business models are tested and refined across multiple countries to create the next tech giants. The entire industry is a giant algorithm trying to find the best way to drive legacy companies out of business.

When the company I buy my books from can also sell financial products to my clients, it’s not hard to come to the conclusion that I need to not just listen to tech talks but to bring in those experts to help my team redesign our approach to the market. Those of us in non-tech companies can no longer take a product-first approach anymore. We have to be serious about understanding consumers and developing operations that can easily adapt to rapidly shifting tastes.

Success is far from guaranteed but failure is if we don’t do something about it.

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