How to Revitalize Your Digital Business Model
Three short, chunky things that (we promise) will rescue your digital business.
The sprawling self-help industry for executives tends to chop up advice into business baby food, with small, easy-to-digest chunks, flavorful summaries and beautiful illustrations. Truisms are packaged into “models” with the promise that following them will make every business better. Beleaguered executives swallow it up and then try to remember what it tasted like when some botched goal wreaks havoc on their day.
It was refreshing, then, to hear a bit of deliberate self-betrayal emerge at a recent seminar run by MIT Sloan Executive Education, “Revitalizing Your Digital Business Model.”
“Why on earth do we need another thing with ‘model’ at the end of it?” asked Martin Mocker, a research scientist at MIT Sloan School of Management’s Center for Information Systems Research (CISR).
A business model, of course, defines how a business makes money. Digital business models define how businesses make money digitally. A lot of traditional companies might say, “we don’t.” Some might even whisper, half to themselves, “ … and we probably won’t.”
Those are cries for help in a world where 2 billion people are online and there are 5.5 billion mobile phone subscriptions, where online users have instant access to price information via search engines — and the ability to express displeasure with companies in ways that damage brands and revenues — and where mobile phones, with or without Internet access, are upending how things get done. In Africa, cell phone carriers are outstripping banks as sources for money.
Mocker’s colleague Peter Weill, the chairman of CISR, then offered three straightforward ways that he and Stephanie Woerner have developed to help executives think about how companies interact with their customers in the digital world.
- Focus on content, experience or platform. Weill said that when a company moves from (physical) place to (online) space, “you have to be the best, or as good as the best.” A company with a clunky platform will be compared to the very best platforms out there, whether or not they offer competing products or services. Similarly, the customer experience must measure up to the very best the Web has to offer. And content — products and information, not just media — must also be the best available. Weill recommends companies focus on one, to start, and make it world class.