The road just got rockier and the atmosphere foggier. Stock market turmoil, coupled with continued uncertainty about federal fiscal policy and the Euro, creates additional challenges for every business owner and leadership team. The risk of a double dip recession just increased. At the same time, significant liquidity resting in investor and company balance sheets stands ready to fuel attractive economic and asset value growth when the right signals appear. While I usually hate “Top 10” lists, we’re all in need of some jump-start ideas to turn feeling blocked into forward movement. Here’s some ideas to find pockets of light as you plot your course through a suddenly thicker forest. You’re not the only company, leadership team and family feeling upset right now. What would you learn (as a B2B company) if you interviewed a range of people in your top customers or…
In business model innovation as in hockey, play where the puck is going.
Hockey great Wayne Gretsky offered insightful business advice in explaining his scoring success. He said, “A good hockey player plays where the puck is. A great hockey player plays where the puck is going to be.” San Antonio, Texas’ Rackspace Hosting understands Gretsky’s model for success. Now twelve-years old, Rackspace designed its business model and value promise around a basis of competition – exemplary service – that will undoubtedly become more important going forward. Its Fanatical Support®, provided by 3,200 Rackers, is a high-touch offense in a rapidly changing industry in which participants often compete on technology capabilities. Rackspace delivers enterprise-level website, e-mail and application hosting services to 130,000 customers around the globe, most of whom buy Rackspace’s cloud computing solutions. Its value proposition is working. Since 2007, Rackspace’s revenue growth has averaged 30% per year. With $70M net income expected in 2011,…
IBM’s Smart Business Model Strategy
IBM’s Smarter Planet initiative is more than smart branding. The initiative reflects smart evolution in IBM’s business model. Over the past decade, the Fortune 500 company exited commodity IT hardware (e.g., personal computers) to make investments in high-end IT, such as data analytics. As IBM’s income from hardware fell from $2.7b to $1.4b, income from software rose from $2.8b to $8.1b between 2000 and 2009. The broader scope and higher-end capabilities positions IBM as a catalyst to advance individual enterprise performance and significantly advance system-wide improvements in health care, transportation, energy, public safety, water and educational systems, or what IBM calls a creating a Smarter Planet. IBM is now positioned to improve how cities – where all these systems come together in a “system of systems” – operate. Thus the Smarter Cities initiative. The aim of the Smarter Cities initiative is to make…
Trends That Should Shape Business Model Strategy
In the 1980s I had the privilege of working closely with consultants from McKinsey & Company, strategy partners to many Fortune 1000 firms and global non-profits. McKinsey’s value promise in a nutshell is, “We’ll help you reshape your industry to your advantage.” McKinsey recently released a report on mega-trends that will shape markets. It’s essential reading for leaders of businesses of any size as they evaluate their organization’s business model strategy. In today’s economy, “status quo” is any company’s weakest strategic direction as the world is changing more rapidly and unpredictably. While forecasting the future is impossible, understanding dynamic trends and their implications for your organization’s risks and opportunities is paramount for making solid business model strategy decisions. In McKinsey’s words: “Managers must also gain an understanding of deep external forces and the narrower trends they can unleash. In our experience, if senior…