The new digital landscape voices a call to action for business leaders to radically change their approach to operating a business
As they are catapulted into the digital era, many businesses are crash-landing in a world they no longer recognize. CEOs who have navigated choppy waters for decades and taken their company to market leadership, now face a challenge one order of magnitude bigger.
A tsunami of digital disruption has hit every industry. They are seeing the threats, but are too slow to adapt. In FightBack the book, which launches tomorrow on Amazon: author, Felix Staeritz, teamed up with CEOs of top global corporations, the world’s top digital thought leaders, and scholars of digital transformation to perform in-depth research into what works best around the world.
So how can you fight back for your employees, your shareholders, your customers and society at large?
Based on our in-depth research we have identified 5 steps for CEOs to renew their business.
Reset how you think about sources of growth and value
1. The way you think determines how you act, which determines what you get in terms of performance. This is the starting point.
2. Re-educate yourself and your team on the types of business models that perform best in a digital economy and how they create and capture value. Without this, you won’t make the big breakthroughs that will unleash your growth potential.
3. At the same time, optimize every aspect of the current business, including decision-making, with software and data intelligence.
Envision new ecosystems and your role within them
1. Remember McKinsey’s forecast that 30% of global economic activity will be mediated by platforms within new ecosystems in ten years time. What ecosystems will you be operating in and which could you orchestrate?
2. You’ll need a very different approach to market analysis to understand the new opportunities and threats.
3. What type of platform strategy do you need to be successful in this different world? There are at least ten different types of platform strategy. Work through them to find which would suit you best.
Nontraditional approaches to capital
1. Capital allocation is the most effective way of translating strategy into action. We know there’s pressure today to cut capital expenditure and return funds to shareholders. These things won’t achieve your growth ambitions. It’s time to be bold.
2. Invest in the business models that can make the difference; don’t just digitize existing out-of-date business models.
3. Create a portfolio of digital investments and platform-based ventures. Be sure they are strategically relevant, not arm’s-length investments. Allocate 10% of your budget to them.
Execute with entrepreneurs within an ambidextrous
1. It’s time to start co-creating with proven tech entrepreneurs — the best people to work with to execute new business models.
2. Build an ambidextrous organization to do this. Create a separate Fast-track the Future business unit, reporting to the CEO, with new people, skills, metrics and incentives. Attract entrepreneurs to lead your digital ventures and incentivize them with equity.
3. Create a governance model based on an Entrepreneurial Growth Board to bridge the gap between the core business and the Fast-track the Future business unit. Ensure the latter drives demand for your future core business and use it to transfer learning.
Widen your appeal and wow your customers
1. The most customer-centric businesses on earth are those that leverage others to serve their customers. You can’t and don’t have to own all the assets. Think of all those third-party developers and merchants supplying Apple’s App Store and Ping An’s platforms.
2. Re-conceive yourself as orchestrating an ecosystem of innovation, not just as a supplier of products and services.
3. Incentivize others to work with and through you. The most important third parties to leverage are entrepreneurs and developers — your key resource to create new growth and value.
Today the World Economic Forum in Davos takes centre stage in global media, and the central theme is that we need to take action. Immediately.
“Your inaction is fueling the flames by the hours,”
As Greta Thunberg said in Davos. Each business leader has a role to play in moving to business models that are stakeholder-based rather than shareholder-based. But to do that, you will need to lead your organisation in a fightback against the ways of thinking and acting that worked well in the past be that now need to be Renewed.