I had a great dialogue with a colleague this week about the very deep and broad impact that big data is having on disruptive business model discovery. This applies to those businesses that are just forming, as well as innovation programs in larger enterprises.
There is a massive change underway that is in the blind spot of most established organizations.
In the “old” days, strategic planning and business model development worked hand in hand with hardware and software roadmaps to build “platforms” for businesses that met the needs of a specific group of customers. The process was very internally oriented, with an emphasis on the synchronization of investments and outcomes to create the maximum output. If you are in a services firm, you built programs and projects that laid the foundation for scaling a method, expertise or insight across a large group of clients.
These platforms (think of a multipurpose device like a raspberry pi drone, or a new insurance product like long-term care insurance) would be carefully chosen groupings of predicted capabilities that were architected to meet the anticipated needs of a sufficiently large group of customers. Many sophisticated techniques such as focus groups and house of quality were developed to survey potential customers. The answers were then carefully mapped to better target their final offerings to the responses received from these survey instruments.
The issue with these techniques, is that no matter how carefully and specifically this work is done, the data you receive is what your potential customer says they will do, not what they will actually do when faced with a choice in the crucible of competing priorities. Realtors have known this for years – what people say they want and what they actually buy is very different.
It is in the use of information about what customers are really doing, that modern data techniques are tremendously effective.
Leading consortiums of firms have been working in the background for years to assemble rich data stores of what customers really do when faced with complex choices. These techniques have their roots in the desktop environment, and now in mature products like Google search and Amazon.
What has poured accelerant on this trend is the unprecedented scale of smartphone deployment. Smartphone data has the enormous advantage of location information, which has provided innumerable opportunities to mine consumers’ behavior and location while they are commuting, playing, resting and vacationing. There is a reason that you constantly have to update your app permissions on your smartphone – vendors are making big money selling your data behind the scenes.
The enterprise adoption of these platforms will allow these techniques and data to “jump the fence” from consumer space into the business-to-business environment. Obvious disruptive impacts will be seen in distributors of all types, health care, drug companies, and the age-old model of dealing with a “buyer” as an enterprise moves to dealing with a crowd of highly equipped decision makers at the point of purchase.
To bring all this to runway level: Competitive advantages will be gained by getting in front of this data rich environment with shrewd planning.
Let me offer a few high leverage application questions:
- If you are a senior leader, how much of your agenda time is spent on reviewing your proprietary data mining collection processes and architecture?
- Have you had an honest dialogue with your customer and client base about the data you are collecting and how it best enables you to serve them?
- Is each of your new product or service platforms paired with a robust plan for data architecture collection and ongoing support?
- Have you elevated your enterprise product data strategy to the management board level, or is it languishing in a functional silo like marketing or IT?
- Does your product or service collaboration strategy include collaboration on data sets and analytics?
- How does your firm value its customer data assets? Is it managed as well as the patent portfolio? (or is someone in the middle management team uploading it to an unsecured web-based analytics tool as we speak)
It is at times of great change that leading firms become laggards through passively watching trends. When these powerful data models and collaborations emerge from behind the curtain, markets will be won and lost before the first shot is fired at the trade show.
I would love to hear from you on your experiences with making the leap from focus group business model development to data driven business model development. Please send me an email or tweet me at @scottpropp.
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