How do you incorporate value into your organisation, so that this becomes apparent in company valuations similar to those of Spinnin’ Records and ID&T? From Hardwell to KLM: business hacking is a tried and tested method for this, as it results in an increase of your company value. Read on to discover the necessary tools for this.
Successful managers or business owners always search for the most optimal business plan and innovative business models. The most successful boards are able to disrupt an entire industry with those. They know how to hack a business.
Before you start hacking, please note. It is good to first be aware of a major social change: the advent of new technological possibilities, such as social media and the internet. This leads to the economy being definitively transformed into a relationship economy.
Thanks to technology, companies can make (even) better contact with (potential) customers. These customers embark on relationships with companies (by following them on Facebook, for instance) or communicating with them via one of their channels (for example, by e-mail or bots). Organisations must meet the needs of customers by sharing content with them and deepening their relationship with them. The relationship with the customer has therefore become the most crucial economic capital of companies.
The term business hacking needs an explanation. The term hacking originates from the American institute MIT. The first hackers were students from a railroad club. Each new connection or improvement in the train circuits was called a hack. Hacking means finding new solutions and applications through performing experiments in quick succession, until an improvement becomes visible. Complexity is irrelevant here. On the contrary: easy and fast alternative solutions are preferred. To illustrate. In principle, the use of a peg to prevent a trouser leg getting stuck in a bike chain, is also a hack.
As an owner or director, you need to know more than simply how your company or industry works. You wish to know how your organisation can get the highest return from your industry. How you can get an advantage over the competition in a structured way. To achieve this, there are new possibilities, thanks to the advent of the relationship economy.
To be successful in this economy, one must analyse data and create context for it. You must once again take a good look at the business model. You will instantly see which new revenue models can be developed and which revenue models can be optimised on the basis of fan and customer data. With the new business model, you can completely disrupt an industry. Put differently: you can hack a business with it.
A new framework is required to really be able to respond to the new economy. This framework creates an umbrella over the organisation and its Umfeld, and that offers certain benefits. It ensures that uniform definitions are used. It makes the digital strategy and transformation measurable.
Directors gain increased insight into the progress of processes. The framework allows them to gain more control over the organisation and to let everyone work on the predetermined, common goals. These goals are required to allow the operating capital, the relationship with the (potential) fan or customer, to grow. This customer data will work for you by using the framework. The Business Acceleration Plan is required to serve this framework.
Intelligence of the organisation
The new framework is in fact the intelligence of an organisation. This makes it clear which information you have to include in the framework. This allows you to set the new standard for companies in your industry. Because you have developed a disruptive business model, you not only hack your own company. Ultimately, you hack an entire industry with the framework. At the same time, this framework makes the complexity of an organisation more understandable for the director.
Examples of parties that already have a good understanding of business hacking are JetBlue and Ryanair (Doeland and Hofstee, 2013), among others. But Hardwell was also able to hack his career by making smart use of data. Inspiring companies and artists, that are keenly followed (and perhaps slightly enviously) by the competition. Parties that you as the owner of a company or director maybe wish to copy something from.
Success starts in the boardroom
Directors benefit from managing using predetermined goals. In fact, the entire boardroom ensures the optimal functioning framework and the implementation of the Business Acceleration Plan. All contribute to the same five objectives of the framework.
Success starts in the boardroom. The abovementioned framework and plan offer a real challenge for directors. Organisations are often not used to working with such a framework. Despite this, directors must take responsibility to get an organisation to function around such a framework. They must also have regular extra training.
Once a business has been ‘hacked’, the directors do not seem to do much. Nothing could be further from the truth. They constantly monitor the complexity of the organisation. They intervene when the settings, the predetermined goals and objectives start to stray from reality. In this way guaranteeing that the code that goes into the framework also provides actual results. After all, you can only manage well if you have the correct insights. Without the five objectives from the framework you cannot protect your company (and with it the value in use of your company) against other business hackers.
Surviving in new economy
The framework is the only solution for directors who wish to survive in the relationship economy. An economy which is increasingly becoming an automatic process. And where things need to change faster and automatically when negative deviations from the predetermined goals and objectives are in sight.
Organisations that wish to make the difference must be smarter than their competitors. They have to manage and immediately respond when a deviation is detected. But they also have to be able to develop new business models to get ahead of the competition. Maybe even ones that can disrupt their industry. In any case it is the shortcut to direct contact with the fan or customer, which is essential if you want your organisation to survive in the relationship economy.
- This post is a pre-read of Part 2 — Chapter 7 of my new book ‘Digital Assets’ the translation of the Dutch publication ‘Digitaal Vermogen’.
- Also read the publication ‘EDM and the Digital Domain’