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New Business Model for the Era of Rampant Change, Knowledge Enterprise, Pervasive Globalization, and Increasing Complexity |
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by Vadim Kotelnikov, Founder, The first-ever BUSINESS e-COACH for Innovative Leaders, 1000ventures.com
"Successful organizations must balance bureaucratic processes at one extreme with the fluid chaos of relationships, interests and transactions, which enable it to be innovative and alive, at the other " - Robin Wood
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Changes That Call For a New Business Model
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New Measures of Business Success
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As business and organizational complexity arises, success can be found in a balanced business system which depends on interconnections of its individual elements:
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Rethinking the Concept of the Corporation2
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Business Model Questions1 for Radical Innovation Projects
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How can we make money with this innovation?
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Why New Business Model? The old principles no longer work in the new age. Businesses have reached the old model's limits with respect to complexity and speed. The real problem is "a ruinously dysfunctional mismatch between today's business environment and the classic business model... Quite simply, the wrong model may transform a company into the vehicle of its own death."2 The successful companies in the future will be ones wise enough to harness the full potential of the entire organization in the rapidly changing business environment. "The world is going to be too tough and competitors too ingenious as companies are shaken loose from traditional ways of conducting business. The winners will be the unbridled firms that are responsive to challenges and adroit in both creating and capturing opportunities. To match a business environment that is more networked within and among companies, the ability to manufacture value will have to be distributed across the company to much a greater extent than in the past."2 Great shifts - genuine and radical transformation - have been shaping the economy and business environment in recent decades. Technology, especially information and communication one, has radically altered the requirements for building and managing a successful business. In this new business climate, although the basic command-and control business model has survived, it has lost its effectiveness significantly. Same Building Blocks, New Functions The new business model can be based on the same building blocks of the traditional corporation but have new functions for those building blocks. "It lies in new ways of treating people, forging linkages, and deploying knowledge. Accustomed ideas are replaced by unaccustomed ones."2 New Focus Today's most successful executives, while still greatly concerned with cost structure, maximizing operational effectiveness, and business process reengineering, have shifted their focus to issues of how to build capabilities for faster growth, how to attract and retain the best people, how to develop leaders at all levels in the company, how to manage knowledge effectively, how to become a true learning organization, and how to be more effective global corporations. The new business model has much stronger focus on the basics of what ultimately creates value today - people, knowledge, and coherence.2 It fosters the creation of value and ensures that each piece of the business contributes to system-wide value. It also goes beyond the workplace and the interface between government and business and looks into building a favorable social climate within and around the company. Many leading companies around the world have made attempts to evolve a new business model. While the paradigm is shifting, it has yet to reach the new stable state however. Leadership New business model is leadership driven, because traditional management is not enough anymore. The world changes too rapidly for any company to rely heavily on what to do and how to do it. In modern organizations, "leadership is spread throughout the pieces of the company to match the way the company works."2 Knowledge Management Today, companies have to be more structured in learning, capturing, and disseminating knowledge. Senior management must guarantee that knowledge management processes are in place and working well. Business Model for Radical Innovation Projects Business model is a broad-stroke picture of how an innovative concept will create economic value for the ultimate user, for the firm and its shareholders and partners. It considers the infrastructure required to move the product/service to the market in a manner that is both easy and convenient for customers and profitable for the firm. Harnessing the Power of Diversity Diversity is a specialized term describing a workplace that includes:
You can find a strategic competitive advantage in an organizational and cultural context by seeking to leverage, rather than diminish, opposite forces...More
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Bibliography:
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"Radical Innovation", Harvard Business School, 2000
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"The Centerless Corporation", by Bruce A.Pasternack and Albert. J. Viscio, 1998
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"Managing Complexity", Robin Wood, 2001
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"Building Tomorrow's Company", Philip Sadler, 2002
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"Corporate Kinetics", Michael Fradette and Steve Michaud, 1998
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"Building Tomorrow's Company", Philip Sadler, 2002
