Has COVID Propelled Your Business into the Future?
Driven by the COVID-19 pandemic, business transformations that would normally take years have evolved in months. We have been forced to swap from the physical to the digital world. And, these shifts that began as temporary will most likely become permanent. Many of us have crossed the digital divide this year, and there will be no going back.
The Future is Now
A recent WSJ Article: Covid-19 Propelled Businesses Into the Future. Ready or Not., points out these stunning developments:
“Covid has acted like a time machine: It brought 2030 to 2020,” said Loren Padelford, vice president at Shopify Inc. “All those trends, where organizations thought they had more time, got rapidly accelerated.”
The Covid-19 pandemic forced millions of Americans to swap the physical for the digital world in a matter of months. As retailers learn to operate without stores, business travelers without airplanes and workers without offices, much of what started out as a temporary expedient is likely to become permanent.
The reverberations are already apparent in everything from the stock market to corporate spending patterns to the decline of physical cash.
Investors in 2020 rewarded companies with digital-intensive, asset-light business models such as online used car seller Carvana Co., Airbnb Inc. and Amazon.com Inc., or firms that supply the infrastructure that makes those models possible — like Shopify, Zoom Video Communications Inc. and Microsoft Corp.
Businesses are now spending less on office space and travel, and more on cloud computing, collaboration software and logistics.
Before the pandemic, roughly 5% of work days were spent at home in the US which climbed to 50% by November this year. The appeal of remote work will be sticky because of investments made by workers and employers on the necessary gear, residual fears of physical proximity due to the pandemic, innovations in collaboration software, and the fact that more people work from home now which makes it more acceptable to continue doing so.Wall Street Journal, Covid-19 Propelled Businesses Into the Future. Ready or Not., 26 Dec 2020.
What does all this mean to you, your staff and your company? My first and foremost answer is that your business model is most likely changing as we move into a future post pandemic environment.
The Business Model
Business Model Generation, by Alexander Osterwalder, offers a concept that allows you to describe and think through the business model of your company, your competitors, or any other enterprise. This concept has been applied and tested around the world and is already used in organizations such as IBM, Ericsson, Deloitte, the Public Works and Government Services of Canada, and many more.
It is a shared language that allows you to easily describe and manipulate business models to create new strategic alternatives. Click here to download the Business Model Canvas tool.
The Nine Building Blocks
Your business model can be described through nine basic building blocks that show the logic of how you intend to make money. The nine blocks cover the four main areas of your business: customers, offer, infrastructure, and financial viability. The business model is like a blueprint for a strategy to be implemented through your company structures, processes, and systems. Here are the nine blocks:
- Customer Segments – An organization serves one or several such as users and payers, or moms and teens.
- Value Propositions – Product or services solving customer problems and satisfying customer needs.
- Channels – Communication, distribution, and sales channels to reach customers and offer them the value proposition.
- Customer Relationships – Relationships are established and maintained with each customer segment to create demand.
- Revenue Streams – Generated from value propositions successfully offered to customers.
- Key Activities – Activities necessary to implement the business model.
- Key Resources – Assets required to make the key activities possible.
- Key Partnerships – Third parties needed to make the key activities possible.
- Cost Structure – Resulting from the business model.
Rethink – Tweak, Change, Innovate or Transform?
This shared language allows you to systematically challenge assumptions about your business model and to rethink and innovate successfully.
The Rethinking Process is pragmatic and simple (but not easy!). Define each of the nine building blocks, as they exist in your company today. Next, gather your leadership team and vigorously debate how to manipulate any one or a combination of the blocks to create a new logic of how you intend to make money in the future post pandemic environment.
Schedule a call with me here.
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