- Business growth is more than just digitisation: it’s about continuously creating new value.
- Too much time is spent on fixing an existing business, but more should be allocated to exploring new growth opportunities.
- To unlock these opportunities, business must reconsider their direction, connectivity, business models and use of emerging tech.
How do some organisations grow to be the largest in the world in little more than a decade, while others struggle to keep pace with the speed of change?
This was the question posed in one of PwC’s recent Make tomorrow. Today breakfast series events with Maggie Zhou, Alibaba’s managing director for Australia and New Zealand.
The conundrum of balancing business as usual with growth is a compelling conversation topic among companies given the scale of disruption made possible through digital.
Everyone feels they’ve talked about it: how to compete, how to grow, how to get to where they need to be.
Those of us who work in business know that the single biggest obstacle preventing growth in Australian organisations is the choice of where they divide their time: between ‘business as usual’ or driving new pivots and growth. Innovation experiments get some airtime, and though large organisations absolutely have the talent for it, they rarely have the patience or prioritisation of resources to pursue it into growth hacking, market trial or scale. But this lack of priority can be an even more damaging message to future efforts and culture.
Most organisations are presented with an extraordinary opportunity for growth. But unless they make a deliberate decision and adopt the characteristics that their high growth counterparts possess, it is hard to imagine they will capture this opportunity. I rarely see this among established businesses.
Working with some of the world’s fastest growing companies and most loved brands, through many countries, industries and ventures, I’ve found common traits that are clearly required.
Think about your core business. Does your company have these traits?
1. Absolute clarity of direction:
Deeper than a ‘vision’
Do you know where your organisation is going? Not just tomorrow or next week, but do you envision your future spanning 100 years? This is something that must be crystal clear in the minds of executives. What do you want to achieve so much, that while you expect to face obstacles, you will continue pushing forward to make happen?
Direction is about clarity of purpose, of what the company is about, and what it is growing to be. It’s important not only because it guides your people, but because it gives you flexibility to innovate in whatever it is that enables you to achieve it. Your leadership and teams are able to make decisions, and make them quickly, sure in the knowledge that the pieces are aligned to the same goal.
As an anecdote, it used to be questionable for one company to have multiple brands because it confused the messaging. Now if the vision is absolutely clear, we quickly understand the purpose: for example, Amazon moving into physical stores with Whole Foods Market. Take Alibaba, Tesla and Atlassian; because their direction and intent is so clear, they make bold moves with speed, confidence, and intent.
2. Connectivity and collaboration to ecosystems:
Unlocking and creating new value
It’s unlikely that businesses have the speed, resources and power to deliver value for customers on their own when going to market and have the responsiveness to remain relevant for long. In this day and age, with exponential technological advancements, and demanding customers, keeping up is no longer possible in isolation and a more fluid model is required.
In order to create large scale growth, your business must be connected to others in order to unlock the next level of value.
Connecting to other ecosystems will broaden the scope of where that value can be created. For example, by connecting to marketplaces, in the way that TaoBao, eBay or Amazon utilise, goods can be exposed to new markets. These may be overseas, they may be wholesale, or may branch into entirely new industries. Consider the value of these platforms not only digitising, but connecting people, products, managing identity, taking payment, providing logistics, cloud and data, and education. Whole new things become enabled and empowered.
The use of your APIs (application programming interfaces) are critical to unlocking new value. Today APIs in traditional organisations exist and are mostly being used for internal connections between systems, or with partners. High growth organisations make APIs available at scale, with developer support, streamlined access through software developer kits (SDKs), and are made available publicly across communities to encourage connectivity. This is necessary to extend reach into platforms, payments, voice, location, virtual assistants, and contextual commerce.
3. Level achieved:
New business models
With direction known, synergies created by connections and platforms, companies then have a new range of possibilities available to play with.
The businesses creating new value have very different business models than traditional companies. These models include subscription (Netflix), freemium (Spotify), marketplace (Amazon), experience (Tesla), data (Google Search), shared economy (Airbnb, Uber) and ecosystem (Apple).
Marketplaces such as eBay or TaoBao developed a system which creates value for themselves through creating value for others. And of course there are shared economies such as Airbnb or Uber, utility models like those employed by Facebook or Google, or LinkedIn and Spotify’s freemium model. All create new value for customers and business alike. They play in a bigger pool because of the way they have positioned their companies to swim.
In turn – and this is key – they then have access to more ways to create value, for example, by the immense amounts of data they have which can be parlayed into new products. Take Spotify or Amazon’s artificial intelligence (AI)-driven recommendation engines that work off the user data from their first raison d’etre: providing access to music and products
4. Emerging tech:
Make it core, not cute
‘Emerging technology’ is not always as emerging as we think it is. Companies that grow and scale globally put technology at their core, including the fast and wide adoption at scale of AI, analytics, identity, digital and drones.
Rather than thinking about what emerging technologies do and considering a trial or two, companies might want to be faster to assess, trial, adopt and scale across the business.
Bottom line: new technology is not cute, it’s core.
Businesses have an amazing opportunity to unlock new value and redesign their models for growth. There are four standout observations from those companies that grow and generate value with pace and momentum that are absent from those that struggle to find growth.
These are absolute clarity of direction; connectedness and collaboration; new business models; and new technology adopted at the core.
I’ll leave you with the words of American composer John Cage:
I can’t understand why people are frightened of new ideas. I’m frightened of the old ones.”
To start a conversation or find out how we balance business understanding with technology innovation and human insight, visit the Intelligent Digital website.