If you want something new, you have to stop doing something old.

Peter F. Drucker

We are dealing with new customer and stakeholder behaviours, disruptive technologies, changing regulatory policies, and the effects of globalisation on our supply chains. To be a truly Mutable Business we believe you have to look at your organisation holistically in terms of the three dimensions of Technology, People and Business. Looking at the business dimension, true “Transformation” is a sustainable change big enough to move your enterprise to a different level, but it can’t be seen as just one change project, and it shouldn’t be over-complicated. Ultimately you need a step change in your current business approach and the value created. You need to:

  • increase revenue or market share
  • improve customer satisfaction
  • cut costs.

In this evolving environment of new business models and digital thinking there is a constant flow of change from the new and novel to the industrialised. It doesn’t matter if you are in media, electronics or paint manufacturing, and it impacts everything from project management to purchasing to finance. Our framework guides the way.

Business Models

We are big fans of Alexander Osterwalder’s Business Model Canvas as a guide to review your approach. It asks you to map out your:

  • Key Partners
  • Key Activities
  • Key Resources
  • Value Proposition
  • Customer Relationship
  • Channels
  • Customer Segments
  • Cost Structure
  • Revenue Streams

In reviewing your model, you need to think differently. How do you defend against low cost disrupters? How do you address shifts in the basis for competition? Are there adjacent markets, an underserved or not served constituency? How can you disruptively exploit new markets or technologies? Can you learn from markets in other countries or different industries? Do you have something you could sell to your competitors? Nothing should be off the table in your exploration of permanent reinvention.

Whatever size you are, within your approach you should be planning for an enterprise scale business. You need to deploy your proprietary assets and look to create superior capabilities. You should be out-investing the competition and looking at ways to better serve your customers. And to do that you’ll need to attract the best talent.

Marketplaces

It is our belief that in today’s business landscape there are no “one size fits all” solutions. You may operate offline, online or both and be thinking in terms of multiple channels to the customer. You may deal directly with the customer, get your suppliers to drop ship, or sell through a marketplace. You need to reduce the friction between the buyer and the seller, wherever you sit in the supply chain. You need to consider all of the ways to motivate and reward your sales people and partners. You might be shifting your approach from products to services and considering subscriptions as an option. You might consider the Freemium approach, a free option that can be upgraded to a paid premium service. You’ll be balancing marketing spend versus risk. You might sell through online marketplaces that are open or curated. Can you turn your own product in to a platform and create your own marketplace? The Mutable Business keeps its approach to the market under constant review.

Ecosystems

The Mutable Business embraces a market pull model instead of the traditional market push model. The push model requires a single company to promote and sell what it has, absorbing all of the costs on its own. Joining an ecosystem enables a company to better address the customer’s need, as it can bring a diverse set of capabilities and innovations to provide a more complete solution more quickly. Taking lessons from biology, ecosystems provide resistance to invasion and provide resilience against external change. In joining an ecosystem, you will need to focus on your core value proposition and consider the complementary offerings that will add value and create a more complete solution for your customer. You need to consider your part in supply and how you enable the network. In turn, the network effects will add value and result in a positive feedback loop.

Processes and Flows

Most organisations large, medium or small may have a company-wide IT system which is either an integrated package, or assembled from best of breed components covering the very structured processes and data models required by your particular industry sector for customer relationship management, enterprise resource planning, human capital management, business intelligence, service, support, marketing and the customer experience at “the last mile” or on their mobile device. In deploying software tools to manage these processes and flows you need to recognise the exceptions that occur day to day. Within these flows you need to recognise the:

  • Goods and services you are providing
  • Money and credits that you collect and pay
  • Information you are tracking and collecting on your customers, suppliers, and partners and how you can turn that in to more value
  • More intangible value that your business is creating, and how you can harness that.

You need to shift the balance of the flow to effectiveness (doing the right things) over efficiency (doing things right). Adaptability is the key survival trait in today’s business environment, and that adaptability characteristic, handling the exceptions over the rules, needs to be designed in to the apps and business systems that support the way your business works.

Measurement

What gets measured gets fixed. In assessing your progress in business transformation we use the six capitals framework to measure how the organisation creates value over time. It uses a combination of quantitative and qualitative information monitoring the business’s activities and outputs in terms financial, manufactured, intellectual, human, social and relationship, and natural resources that you use or affect.

Economy

Your new business strategy is happening against the backdrop of a globalised economy transitioning to a knowledge economy that is evolving again with new technology. Individuals and groups are able to make use of any under-utilised assets that they own like cars, rooms and apartments creating the sharing economy. Individuals can offer their services through online marketplaces on a full or part-time basis to companies both small and large forming the gig economy. Companies are transitioning from being product oriented, to offering everything as a service. You can make use any of these options on the buy side or sell side, as part of your platform, or within your ecosystem.

Conclusion

Wherever each of your given categories of products or services sits within its own lifecycle and the broader market, you can apply the business dimension of our Mutable framework to think differently and create new value.

This Business framework can’t operate stand-alone but has to be supported by your leadership and People, as well as harnessing our Technology framework to provide the right tools.  You also need to keep an eye on the future possibilities. The data you collect has the potential to become the biggest differentiator in the next two to three years. Look to ways that you can unlock it and use it strategically to win.

MUTABLE BUSINESS - BUSINESS DIAGRAM

Diagram: The Mutable Business – Business
(click image to zoom)

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