The digital revolution is forcing every company to move from business models focused on products and services to those that leverage networks and platforms. This shift requires dispelling myopia, embracing new organisational models, and unlearning old habits. It’s a fundamental change in how you think and what you measure.
But only after you align your mental, business, and measurement models, you will be well on your way to a successful digital transformation.
It’s the combination of mental, business, and measurement models that allows real transformation to occur in a business.
It’s easy to blame a failed business on doing the wrong things, but rarely do leaders realise that the failure lies in their own thinking.
We are in the midst of a massive migration in business models, from managing assets and delivering services to creating technologies and orchestrating networks.
According to research, technology- and network-based business models are more profitable, enable faster growth, and are more rewarded in the marketplace.
Many companies have 'platform envy' and are trying to emulate the network-based business models of companies like Uber, Amazon, Airbnb, and Paypal.
Copying a business model without copying a mental model will lead to disappointing results. You have to change how you think before you can change what you do, and then change what you measure to close the loop.
There are opportunities to bring new thinking to every industry and function.
For example, most retailers are merchants using technology. Amazon is a technologist empowering merchants. Traditional retailers obsess over incremental metrics like same-store sales that are tied to business goals.
By contrast, 80 per cent of Amazon’s metrics provide feedback on how well it is helping customers achieve their goals.
Courtesy: www.hbr.org
