Whether you like it or not — hell, whether you even know it or not — your business has changed.
That’s because the very rules of business have changed. It’s no longer about production or sales or EPITDA. It’s about service. It’s about people. It’s about solving problems.
Just ask Geoff Colvin. A senior editor at Fortune, Colvin keynoted Oracle’s Modern Finance Experience in Chicago with tale after tale of business that has shifted from profit to people, from sales to solutions.
- Business today is often a collaborative venture. Take weather apps. We all have them on our smartphones, but have you ever asked yourself how those apps became so accurate? The answer is simple, says Colvin: Each smartphone contains a barometer. Every time we use it, we’re sending data about what the weather is like in our area. Factor in millions of users in thousands of locations, and it’s no wonder that our weather apps are as accurate as they are.
- We’ve entered what Colvin calls the “friction-free economy,” where the goal is to interact with our customers and clients as infrequently as possible. Your clients don’t want to spend time with you — they want to do their business and get on with their lives. Amazon, which pioneered the concept of one-click payments, decided that even one click was one too many. It created the Tide Button, which has but one purpose: to let customers order Tide without having to go online. Amazon has now created a version of the Tide Button for hundreds of products. How are you reducing friction for your clients?
- The most profitable businesses today have very few assets. Think about Uber: It doesn’t own any cars. Or AirBNB: It doesn’t own any property. That creates a huge challenge for today’s finance function: What, exactly, are assets? In an era when intellectual property, customers relationships, and human capital are among our most valuable assets, perhaps the most valuable of all, Colvin says, are our own employees.
- Check that, says Colvin: The 21st century’s most valuable assets might be ingenuity, imagination, and openness to new ideas. Those are human qualities, and you won’t find them on any bottom line.
- All of this requires businesses to rethink their business models. In fact, business model innovation is a huge competitive advantage these days … though most of your competitors won’t think it is. Thomson Reuters got out of the newspaper business in 2000, when newspaper revenues were at their highest. Competitors thought they were crazy, but Thomson Reuters saw the future of print journalism and knew it was time to get out. Today, they look like geniuses. “When you decide to change your business model, you won’t be doing what your peers are doing,” Colvin said, “and you’ll look crazy as a result. Do it anyway.”
Or as Oracle CEO Safra Catz said, “People love change … as long as it doesn’t happen to them.”
Embrace change. It’s the new normal, after all. Your competitive advantage going forward will be your ability to outmaneuver the competition. To think differently. To understand that what got you here won’t get you there.
No one will believe you. Do it anyway.
Your future depends on it.