Next Wave Of Economic Growth Will Come From Leaders Who Will Challenge Their Mental, Business, Revenue models
2021 has started on a positive note. The news of the vaccine being ready and dispatched soon for mass inoculation has definitely set the market sentiments soaring. But when I reflect on 2020 with mixed emotions, as a business leader, and foremost as a consumer, I realise I have evolved both in my thinking and actions. And much of this was not by design but necessitated, and I am moving ahead with full conviction that there is no going back to life pre-Covid. Our lives have been disrupted for good.
A key learning from the on-going health crisis thus far has been to constantly re-invent oneself- be it an Organisation or an individual. But this can happen only if we are willing to change our mental, business and revenue models. Every crisis acts as an accelerator of certain changes that many of us, have resisted. And one must definitely resist the thinking that things will go back to how they used to be.
The realization of this truth, and the faster one rewires their approach, the will be better positioned to harness a disruption for growth than get sidelined or lost.
Competition can come from anywhere
In these complex and uncertain times, a big challenge companies need to prepare for is that competition can come from anywhere. For example, by shifting people’s behaviour to the digital sphere, in some ways the crisis has been a huge catalyst for globalization. Traditional industry boundaries are fast becoming irrelevant. This was well reflected in Apple CEO Tim Cook’s comment in Jan 2019 that he believed that Apple’s biggest contribution to Mankind would be in healthcare. And given Apple’s success in other areas, such as dominating the music industry with iTunes, this should raise a red flag for current players in healthcare. A similar trend that is visible in the BFSI space has been noted by Capgemini ad Linkedin in their fintech report created in collaboration with EFMA. Telecom firms, fintech firms and GAFA companies (Google, Apple, Facebook and Amazon) re shaking up the industry that is being reshaped by expanding customer expectations for convenience and personalization. There is no consumer today without a GAFA relationship these days and GAFA has already entered the payments space and Amazon is probably the most formidable one. Some legacy banks do understand the threat and are making moves to counter it.
Collaborate for Success
When Henry Chesbrough created the concept of open innovation he was looking at bridging a certain gap – of that between the approach of business and academia to innovation. And this concept, no matter how old will always be in vogue. And also, a good solution to help business get back on track.
While business hold their IP very close to them and look at it as market differentiation, the benefits of looking externally than internally for innovation have been tested and proven time and again. Diversity in thinking and approach to a concept can help create solutions that are more resilient and designed to progress with time. Just look at the front running Covid Vaccine Candidate for example. It is not being created by any pharma bellwether in the inoculation business- but an academic Institute-Oxford. But it is backed and funded entirely by a Tier I pharma company Astrazeneca who has been entrusted with what it knows and does best- invest in best in class science that create life-saving drugs to be pushed out through its strong market access capabilities. This Vaccine candidate is probably the most awaited invention of the year.
Challenge Established Industry models
At the core of most human disruptions, new mental models have played a central role. And disruptors come up with a model that challenges an industry’s established way of thinking and doing. In their 2005 book The Power of Impossible Thinking, authors Jerry Wind and Colin Cook with Robert Gunther point out that leaders often fail to see the true threats and opportunities because of the limiting ways in which we make sense of the world. And leaders must realise that it is their mental model that is going to shape their company’s business and revenue model. For example, when Kalanick and Camp thought differently about their problem of not getting a cab when they wanted it, they changes their mental model. They saw an opportunity to create value through providing connectivity. And this gave birth to Uber, a true disruptor. It is not just human disruptors we need to worry about, but also nature. As is the case with Covid, the next global disaster is predicted to be around climate change. We must be prepared for this. Whichever industry you are in, look at the innovators and disruptors and assess how they are doing things differently before you embark upon a SWOT analysis of your own business model to stay competitive. Can you adopt an Uber or Airbnb model in your business or even build a business model around frugal innovation like Narayan Health did, the possibilities are endless.
There is something else we need to guard against: not falling into the typical mental model during times of crisis- the let’s wait for it to end and we will return to the good old days. This is a fatally flawed model. A crisis, and one of this magnitude, changes everything, and post-crisis we have to embrace a new reality.
One might argue that it’s the inherent nature of digital natives that allows them to easily change their business models like most did last year as a natural response to make the most of what the crisis wreaked. But the lack of legacy is just one aspect of this agility they display. But even legacy enterprises who were jolted by the pandemic need to look at this crisis as an opportunity to reimagine and reinvent their approach to customers and stakeholders for long term success.
