Digital transformation is driven primarily by three forces of change: changed customer behavior, increasing regulatory demands and new technologies. Digital transformation is also being powered by a social paradigm shift towards individualization and flexibility.
These changes require a fundamental rethink on the part of companies:
brand → user experience
product→ eco system
Creative and fast-acting market players who from the outset put the usage, service and customer experience at the heart of their products, are making inroads at the expense of established companies. They are increasingly taking market share from such companies with their disruptive business ideas.
“For example, in the last few years, banks have lost a significant amount of ground in the area of payment transactions”, explains Anton Taubenberger, financial expert at Q_PERIOR. “Besides already established market participants such as PayPal, there are now numerous new suppliers of – frequently mobile – payment systems which are threatening the banks’ classical value chain.
A similar picture is emerging in other sectors such as tourism, transport and logistics. For example, tour operators and transport companies are currently suffering from the competition from app-based exchanges such as Airbnb, Uber or Flixbus which are trying to drive the traditional suppliers from the market with comparatively low expenditure.
Defying the competition with innovations of your own
The changes to underlying conditions and increasing competition from new companies, in some cases industry outsiders, are forcing companies to review their previous business models and themselves to open up new revenue options in the digital world. This proposition places the subject of innovation management firmly in the spotlight of decision-makers’ attention.
The first challenge in the search for digital innovation and business models lies in generating the ideas. There are differing approaches here: many corporations look for inspiration outside their own organization, for example, by exchanging ideas with start-ups. Companies are standing shoulder-to-shoulder with their supposed competitors as part of so-called accelerator or incubator programs. Deutsche Telekom, for example, has launched its hub:raum incubator program, and the insurer Allianz has set up its Digital Accelerator. Other companies such as EnBW, Airbus or Deutsche Bahn, on the other hand, are supporting the Bootcamp Berlin start-up.
Alliances with universities and colleges offer further opportunities for identifying ideas. Companies can carry out scientifically validated trend analyses on subjects such as “mobility 2025” as part of university projects. The benefits are obvious: companies not only put themselves in a position to develop specific future scenarios and thereby to predict the needs of their customers, but also benefit from the innovative ideas of students, the so-called digital natives.
As well as potential alliances with start-ups and universities, there is of course also the option of exploiting the creativity of your own staff. A large number of major corporations are therefore already offering creative minds in their own organizations a playground for innovations. There are various methods such as “Design Thinking” or the simple card game “Game of Things” with which you can break down employees’ existing thought patterns in a more or less playful manner, and generate new ideas. This can certainly be fruitful as long as companies grant sufficient space for innovation.
Finally earning money through innovation
If companies do indeed create new, innovative ideas using different methods, they then face the second major challenge: how to turn an innovation into a profitable business model.
Q_PERIOR have developed a model for this from the generation of ideas, through the preparation of a business model all the way to its implementation and integration into the line organization.
There are a wide variety of options for generating ideas. The challenge throughout the entire process consists in deriving specific business models from the mass of ideas which may be able to generate new revenues, and then in implementing them. However, these innovation processes can only lead to success if they are created in an atmosphere of total openness, free of any fear. According to the current TrendINDEX 2016.1 published by the 2b AHEAD think tank, fear is the largest barrier to innovation: Fear of making mistakes, fear of venturing into new territory, fear of unknown results. The biggest challenge for successful change lies in overcoming this very fear. Because only companies that permit mistakes and failure as a possible outcome, can create the space for ideas which lie beyond the empirical values experienced over the course of many years. This kind of attitude constitutes the best basis for facing up to new issues and developing innovative business models which have the potential to achieve strategic relevance in the near future.