In our previous episode of UpSw!ng, we talked about data, and specifically about how the value of data is not derived by the volume, but how you use data decisioning to sell more, save time, save costs, or for safety and the environment.  In this episode we will explore this further and look at a few ways these data driven outcomes can create value and transform business models.

It is essential for organisations to define and build powerful digital business models to exploit market opportunities and protect against the threats that the digital economy presents.

Threats exist in many forms, yet the threat that most organisations are not ready for is new entrant disruption.  Disruptive new companies are arriving in markets with little to no barrier to entry providing customers with new business models never seen before.

Don’t think you’re immune to be disrupted either.  Even the most capital-intensive organisations who have conversations like “how can we be disrupted? A newcomer won’t have the capital and infrastructure to affect us”, can and will be disrupted and it will all be digitally enabled.   These disruptors will not look like you, and therein lies the threat, you will not see them coming.

So, get in front of them by innovating your business models, today.

You need to start with a realistic situational awareness

The first place to start is to have a clear understanding of your current business model, a simple business model canvas will suffice, something quick.

Augment this with comprehensive insights and learnings from industry trends, market research, customer and employee interviews and competitive analysis to form a truthful (and maybe confronting) understanding of the current operational, strategic, and external states of the current business.

Comparing this current situation to your vision, you should be able to identify the air gap.   

Then, close the gap

Learning from the data captured in the situational awareness, create a diverse portfolio of initiatives capable of transforming the business model across three areas:  Operational, Price & Value, and New Business Models.  Be aware when creating your portfolio to not let selection and assumption bias creep in by self-managing your mindset. 

Operational Transformation Portfolio
  • Cost saving value: Initiatives resulting in financial cost savings, improving the EBIT. However, the word transformation is critical here.  If you remember, we don’t want to make change (improve the past), we need to transform (create the future).
  • To achieve this, you must transform how the business is measured: Pivot from siloed departments with unconnected people, processes, technology, and measures, to an operating model that ‘flows’ across the business in line with the customer experience.  Moving from siloed execution metrics that simply record the operational activity in isolation, to measuring the effectiveness of executing the operational business flow will drive this transformation.
Price and Value Transformation Portfolio
  • Offering Value, augmenting traditional products and services with additional ‘customer value for money’, to either generate additional revenue, or to protect against competition without being in a price war (to the bottom).
  • Experience Value, improve the customer experience by understanding them holistically through data and analytics – behavioral, sentimental, and predictive analysis to help you make better informed decisions and offer the most effective product or service at the right time.
  • Platform value, where peer to peer dynamics of a traditional business is replaced with new sources of supply and demand, creating a network effect, like Uber a transaction platform, or Salesforce an innovation platform, or Alibaba which combines the two.
New Business Model Portfolio
  • Create new revenue, using digital business models for new revenue for new and existing customers, see some examples below:
  • Subscription Model, adopted by the likes of Netflix and Amazon Prime. This model captures regular business and revenue by providing a subscription-based offering for something that has traditionally only been bought when needed.
  • Freemium Model, which Dropbox and Skype use. This provides people with a basic offering, with an option to upgrade to a paid offering.
  • Experience Model is one which is used by Apple and Tesla, and provides an outstanding experience, which people are happy to pay for.
  • Platform model, upon which the likes of Airbnb and Uber have grown. The platform model facilitates high volumes of customer and supplier relationships.
  • Shared Gains model, partner with customers to share the value created rather than the customer paying for services to build. This is the most disruptive model to the professional services industry and requires maturity and dedicated funding.

How to activate your growth portfolio

It’s important to acknowledge that initiatives across each transformation horizon will have different probabilities for success and time to value.  For example, operational transformation will return value within 12-18 months and each initiative will have a high percentage of success, whereas a new business model could be a 3-year time to value, and each initiative with a lower success probability.  As such, you will need to have larger funnels of business model transformation initiatives being tested and experimented at the same pace as the implementation of the operational transformation initiatives. 

Therefore, to have this type of diverse portfolio you will need to have different approaches to funding, processes, and talent capabilities to deliver across the transformation horizons.  See the example in the table below, albeit missing is the major dependency being Enablers and Foundations. The advice here is to ‘just do it’ , allocate a budget, empower your teams, and move at pace.

Operational Transformation

Select and Start

Leverage project management excellence, change management and people leadership to select the initiatives and start. Align outcomes to future business operations.

Price & Value Transformation

Invest and Test

Move to agile funding and product management approach, collaborate early and often with customers. Leverage design thinking, MVP’s and new ways of working.

New Business Model Transformation

Explore and Learn

Leverage innovation frameworks to experiment and learn, like DDP.  Create an innovation fund to draw down small amounts to maintain momentum.

Diverse portfolios require leadership from the CEO and Board

To achieve a successful transformation, there needs to be support from the Board and CEO to operate across these transformational horizons in a balanced portfolio, simultaneously.  

One of the most frustrating things I hear when promoting balanced portfolios is from leaders that say things like ‘we need to focus on strong foundations (or back to basics) to earn the right …..’.  Sorry I disagree, if you do this in isolation of the transformation strategy you are solving the wrong problems and you will fail for the following reasons:

  1. You’ve taken too long and before you know it your competitors have your customers, your talent has all walked or you’ve been disrupted,
  2. You are trying to focus on foundations whilst operating in an existing mature / traditional organisation which is not designed to achieve substantial change preventing you from achieving these ‘back to basic’ goals, driving a suboptimal culture and financial position.
  3. Death by re-work, you’ll be stuck in this mode over and over, as every time you attempt anything strategic don’t be surprised when the basics are not fit for purpose.

It is the role of the board and CEO to set the business up for success, with the right leadership and a strategy to activate the business shift across the enablers (foundations and capabilities), and portfolio initiatives in one cohesive strategy.

Finally, find your place in the new digital economy

Above all, its is essential that you consider the digital economy one of the most significant issues facing any organisation.  The formal definition of the digital economy is ‘the economic activity created from billions of everyday online connections among people, businesses, devices, data, and processes’.    

More important than the number itself is the magnitude and implications, what happens when everything and everyone is connected, how do we differentiate?

As industry boundaries are shifting, every company needs to start with one question…. what business am I in, and what does my future business model look like?

About UpSw!ng

The content in this series is my perspective, open to discussion and healthy challenge, and welcomes ideas and collaboration should you wish to get involved.

It is my objective to represent diverse thinking and inspirational leadership towards a fundamental shift in the way technology and innovation can grow profitable NZ organisations, whilst making positive impacts on society.

What may feel dramatic now, will be considered visionary in the future!

Ready to take action?

I would be delighted to help you with your digital growth, get in touch at to start taking action, not just promoting a vision!

#globalmindkiwiheart

About UpSw!ng

Your content goes here. Edit or remove this text inline or in the module Content settings. You can also style every aspect of this content in the module Design settings and even apply custom CSS to this text in the module Advanced settings.

The content in this series is my perspective, open to discussion and healthy challenge, and welcomes ideas and collaboration should you wish to get involved.

It is my objective to represent diverse thinking and inspirational leadership towards a fundamental shift in the way technology and innovation can grow profitable NZ organisations, whilst making positive impacts on society.

What may feel dramatic now, will be considered visionary in the future!

Ready to take action?

I would be delighted to help you with your digital growth, get in touch at to start taking action, not just promoting a vision!

#globalmindkiwiheart

About UpSw!ng

Your content goes here. Edit or remove this text inline or in the module Content settings. You can also style every aspect of this content in the module Design settings and even apply custom CSS to this text in the module Advanced settings.

The content in this series is my perspective, open to discussion and healthy challenge, and welcomes ideas and collaboration should you wish to get involved.

It is my objective to represent diverse thinking and inspirational leadership towards a fundamental shift in the way technology and innovation can grow profitable NZ organisations, whilst making positive impacts on society.

What may feel dramatic now, will be considered visionary in the future!

Ready to take action?

I would be delighted to help you with your digital growth, get in touch at to start taking action, not just promoting a vision!

#globalmindkiwiheart