As part of your company’s leadership team, consider how many of your customers are connected through the IoT (Internet of Things). Customers connect to you, your team, your company, your competitors and to each other.
When was the last time you dusted off yesterday’s business model? Your business model must be relevant and valuable to sustain your company in tomorrow’s connected business ecosystem.
Customer connectivity becomes everyone’s business common denominator. Consider that:
- Your customers already are connected to the IoT (Internet of Things) via devices (handheld, portable, wearable, machinery, software interfaces).
- These devices create, nurture and enhance their experience of working with you and your company.
- Your customers form opinions about the quality of your company’s output.
- Customer perception impacts their collective satisfaction in working with your team pre-sale to post-sale implementation and maintenance.
- Your customers’ purchasing and contracting habits are impacted based on the consistency and continuity of their experiences of being “connected” to you.
The success of your company’s business model in serving the IoT-connected customer impacts the sustainability of your company.
Yesterday’s business model (and perhaps today’s) is static and homogeneous, grounded on four business pillars: market model, organizational model/infrastructure, revenue model and value model. Your customers and markets are characterized by industry type (if B2B business-to-business) or geography / demographics (if B2C business-to-consumer based). You hire employees to perform specific tasks to create specific deliverables according to specific protocols. Your operational model focuses on eliminating defects or mistakes and cutting costs. Your revenue model arrives at EBITDA (earnings before interest, taxes, depreciation and amortization). Your value model is articulated as a visionary phrase which is assumed to be universally understood by, and significant to, all customer types.
Your post-industrial, silo-driven business model has served you well. You committed to it, you stuck with it regardless of signs of structural weakness, your business grew up around it, your people worked around each other and you became mired in it.
Yesterday’s business model is called the status quo. It is based on the assumption of homogeneity: all customers are the same, all business dynamics are constant and predictable.
You know that business scenario is not your business case. Your customers, operations, revenue and markets are dynamic and diverse.
Tomorrow’s connected customer business model is fluid, nimble, flexible and responsive to economies, markets, logistics, human capital, and resource requirements. The structural foundation upon which tomorrow’s business model is built acknowledges that A-List customers are critical to the growth, expansion and sustainability of your business. These customers are IoT-connected and have business models structured around dynamic and responsive operational and business units. These key customers anticipate that your own business model morphs in a manner complementary to theirs.
Tomorrow’s business model focuses on developing organizational agility through implementation of Big Data, analytics and algorithms. These tools are utilized by your internally-connected organization to collect, analyze and interpret (often in a proprietary manner) customer insights. Your business and operational insights, in turn, are leveraged to create, expand and sustain your loyal and retained customer base.
Developing a holistic connected customer business model becomes a necessity for working with tomorrow’s customers.
Your reality: your customers are connected to each other and to your competitors. Their own business models are changing in response to market and technological dynamics and diversity of opportunity.
How does your leadership team plan on evaluating the value and relevance of your current business model to better serve tomorrow’s customers?
Babette N. Ten Haken is a strategist, analyst, author and blogger. Her focus: the interrelationship between teams, leadership and culture in technology and manufacturing. Her Workshops target excellence in the execution of strategy. Babette began her career in clinical research where she was asked to bring clarity to stalemated cross-functional conversations. Her Playbook of collaboration hacks, Do YOU Mean Business? is available on Amazon.com.