How Your Business Model Dictates the Survival of Your Company
I’d like to think that one of the great things people have realized after the economic collapse is that an old business model simply isn’t viable in our dramatically-changing world. Companies like Netflix and Costco that always go against the common ‘corporate survival’ strategy have flourished and even come out on top of post-2009 America.
How did Netflix do this? It’s not that they had a different business model; they changed their business model when they knew the old one wasn’t going to work anymore.
Why should I even go through the trouble? Mine still works.
Yes, your company model is working, meaning you’re making enough sales with your current method to keep your business afloat. Our fast-paced world is too hungry for new technology, products and services to be loyal to an enterprise who doesn’t innovate.
What’s more, innovative companies aren’t stuck on their one recent breakthrough. They build themselves on going from one innovation to the next.
Surely we don’t have to change our business model right now and that fast.
The funny thing about business models is that it’s not going to last forever. But higher-ups don’t realize that. They get comfortable with the status quo and shy away from big decisions. They always see change as some way for them to lose the things they worked for so many years. If there’s going to be any change, it should come from their successor.
The problem with this kind of thinking is that the industry you’re in could change before a CEO rotates out. Waiting for change to come to you isn’t going to help you survive.
So how do we go about changing my business model?
Thirteen principles to follow for a business model innovation process may be a bit daunting at first, but it’s actually quite fun, if a bit complicated:
- Go for greatness. When you innovate or change, don’t do so to survive (even if that is part of the reason). Do it to be great.
- Unconventional people are your friends. When looking for change, seek persons who don’t think in the same way you do. The clash of ideas can give birth to something great.
- Collaborate. I cannot stress enough how important it is to share and work with your team. Innovation does not happen in a vacuum.
- Tear down old structures and build new ones. Examine what structures in your company hampers the creative process. If you need one of the functions it performs, just put it in a new structure that lets people think and act more freely.
- Design thinking and process should go together. Hire people who can help with designing your products and the way they’re delivered.
- Tap into people’s emotions. Reports and figures don’t leave impressions except on your CEO’s bank book. Use stories to motivate your team. They’ll remember the experience and the emotion more than any memo.
- System-level thinking should be considered cool. Make sure your team knows that forward-thinking about the whole company is encouraged and welcomed.
- Experiment. Although scary, experimenting on your company is one way to know which fits and which doesn’t.
- Be passionate. Infect your team with the commitment, drive and determination you have. Otherwise, you’re just tinkering around with what’s there.
- Avoid negative attitudes. Changing your business model isn’t easy. It’s a very complex endeavour that has no room for naysayers and pessimism. You need people inspired and motivated.
- Put benchmarking on the bench. Small changes usually don’t impact the bigger picture. You should explore other disciplines, technology and techniques outside your comfort zone.
- Design for a world that works for the user. What your consumer wants is what should drive your company structure. Know your clients’ experiences so you can design for their needs.
- Time is of the essence. Innovation happens over a long period of time. Don’t waste a minute of it.
Changing your business model isn’t about earning more money or surviving. It’s about delivering more value to your customers and striving for greatness.
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