January 2021SHARE
January 2021


‘Business Model’ thinking that puts scale, growth and shareholder returns above all else, is now increasingly at conflict with ‘Model Business’ expectations of keeping all stakeholder interests at heart when doing business. This is a critical issue today, spanning wide and deep in our socio-economic contexts. This article explores the role that digital technology can play in bridging the gap between Business Model thinking and Model Business behaviour. It also provides some practical perspectives on how businesses can look at adoption of digital technology to accelerate their journey towards a Model Business.

2020: The year of acceleration

I recall reading a reporti in May this year, suggesting that technology adoption in many walks of life and industry has vaulted ahead, covering nearly 5 years’ worth of ground in just a few weeks. I wondered then if this pandemic would have some positive fallouts as well.

If the number of people striking Yoga poses on social media is anything to go by, we ought to be a calmer and better-balanced species by the end of this — although that does seem like a long shot.

I can safely say however, that 2020 did accelerate some fundamental shifts, from better hygiene and growing internet penetration, to new ways of teaching and learning and advances in healthcare research, or just a greater appreciation for the things we have.

It makes me wonder if ‘Business’, as an institution, missed a trick on accelerating some much-needed change during this time. Don’t get me wrong; there are a ton of companies out there that have done well during the pandemic and scores more that may have done excellently as well. However, I feel that something fundamental that could’ve been changed hasn’t really been impacted adequately.

Ways of doing business: a (not so) silent prayer for change

Even before the pandemic hit the world, trust levels in business and capitalism were declining.

According to the Edelman Trust Barometer surveyii, people worldwide felt that none of the four key institutions (Business, Government, Media, and NGOs) were fully trustworthy – either because they were perceived to be incompetent or unethical, or both.

This was in January 2020; one can only imagine what these numbers will look like in 2021, given the layoffs, bailouts, the odd cases of profiteering, the poor handling of the pandemic in many countries, and the generally pessimistic mood that prevails.

As far as business is concerned, the current perception seems to be that businesses have put self-interest above collective interests even in these trying times. The growing conversation around employee burnout is simply adding more fuel to that fire.

On the other hand, if one were to ask business owners, they would probably argue that business survival was/ is at stake and that they’re doing what is necessary to protect the business and as many jobs as they can.

Business models v/s model businesses

On this issue, we can acknowledge two simple facts and move forward from there:

Firstly, since the Industrial Revolution, business and industry have been conditioned to keep scaling and growing; most of their success measures today are linked to this ideology. For simplicity, I’m calling this, Business Model thinking. While this constant pressure to grow is unhealthy and often damaging to society, it is also deeply ingrained in ways of doing business and cannot be changed overnight.

Secondly, the world is at an inflection point today. Discontent about the socio-economic, environmental, and ethical fallouts of current business practices is on the rise, and the world is asking for a change. Ideas like Stakeholder Capitalism that have been around for decades are gaining traction once againiii in mainstream conversations. The world wants businesses to be inclusive in their benefits to all constituents, not just the shareholders. For ease, I’m calling this Model Business behaviour.

On the face of it, the friction between Business Model thinking and Model Business behaviour feels like a tug-of-war, with no win-win solution in sight.

The underleveraged asset

Humanity has a history of resolving some of its greatest stresses in innovative ways. And it isn’t an exaggeration to say that the tension between Business Models and Model Businesses and the resulting inequalities is one of the greatest concerns of our timesiv. Interestingly, despite having access to a potential solution for years, we still haven’t embraced it fully; or rather, we only embrace it enough to make do for the moment.

I’m referring of course, to digital technology spanning across AI, Machine learning, Intelligent Automation, chatbots, facial recognition, ERP, AR/ VR, real-time geolocation, remote working platforms, collaboration systems, predictive analytics and IoT — which all have the potential to transform businesses, not by replacing people, but by augmenting them.

Millions of reams have been written previously about how digital tech can make a business stronger, faster, leaner, and more productive. And yet, if one were to compare the actual rate of digital technology adoption and the depth of proliferation viz-a-viz the potential, you’ll see that we’ve just done enough to get by.

It’s unfathomable that businesses that are hesitating to embrace digital tech are getting disrupted and often consumed by those who do. Think of what Uber, Ola, and Grab have done to cab companies; Facebook and Google to news media; WhatsApp and WeChat to an entire revenue stream for cell cos. and what Amazon is doing to everyone and everything!

It’s the business model mindset that often comes in the way. Myopically driven by quarterly result pressures and traditional budgeting methods, most businesses will deploy a chatbot here or an analytics suite there, to ease bottlenecks or gain short-term advantages. However, they don’t let transformation and growth fueled by technology, become a part of their organization’s DNA. I imagine that if an artist were to paint the digital tech landscape in an average business today, it’ll probably look like a patchwork quilt rather than a rich tapestry with a larger coherent story.

Why does this matter to the Business Model v/s model Business conversation? Because deep digital technology adoption is the most promising long-term solution to solve this tug-of-war, with the least compromises at both ends.

Think of it this way: If inequality were a pandemic, then digital technology is a promising treatment that can give the body enough support to heal itself. And yet, digital technology is more often met with doubt and resistance than with open arms. Why is that? There are several well-documented barriers that come in the way of deep digital tech integration in businesses. To my mind, however, four of these stand out the most.

Loved what you read?

Get 15 practical thought leadership articles on AI and Automation delivered to your inbox


Loved what you read?

Get 15 practical thought leadership articles on AI and Automation delivered to your inbox


Too often, the adoption of digital technology is a reactionary/ problem-solution exercise within an organization. For instance, during the pandemic, companies that entirely depended on physical ways of doing things adapted to digital tech overnight, barring some teething troubles, have more or less found a degree of stability.

I spoke with a senior financial services leader in Brazil a few weeks ago who confirmed that tech adoption proposals that had been gathering dust for months, were now being fast-tracked to approval in a matter of days. Another executive in India who believed that ‘work-from-home’ is essentially no work at all, spent 10 minutes at the start of our meeting, extolling the virtues of remote collaboration software and how it was boosting productivity. And then there’s a dear friend helming the SEA business of a global FMCG brand, who was excited that his sales team were doing just as well on their ‘virtual beat’ and saving several hours a week as well. What’s more, he also had easy and structured access to data that gave him more insight into ground realities than ever before!

The question is, shouldn’t all of this have happened without the pandemic? None of the technologies are new or path-breaking; in fact, they’ve been around for a while now. So why the inertia in adopting them? Part of it is change aversion and the good old mentality of ‘don’t try to fix what’s already working,’ but there’s more as well.

Most traditional businesses have only reshaped their ways of working incrementally over the years. The complete overhauls are few and far apart. They’re inherently stuck in the ‘business model’ rather than asking themselves what a ‘model business’ of today needs. As a result, what’s happening is the classic frog in hot water — things are gradually deteriorating to a tipping point until finally someone from the outside (or inside!) can see just how messed up things are in the business and start something of their own to disrupt it.

Suggestion: Don’t piecemeal it; Reimagine it.

What is your long-term approach to empowering your people with the right technology so that they can add more value to your business? If you have a thought-through answer, you’re one of the very few. Unfortunately, most companies today don’t have a long-term people-technology-business strategy.

A good way to arrive at it is to build it from the ground up. Get your senior executives and a few ground soldiers in a room together (a virtual one for now) and a couple of digital technology experts as well. Take your ground staff’s help and map out your entire business process, from marking the bottlenecks and high-cost zones to the high-risk spots and error-prone areas. You can then assign a monetary value to these —how much your business is losing in terms of cost of time, cost of wastage, and cost of error. Let the digital tech experts work with you on ideating solutions that could solve these issues. Do a ballpark cost estimate of deploying the solutions — the cost of deploying tech will more often than not be lower than what you’re losing already.

Don’t let the quantum of change daunt you. Once you have it all in one place, you can prioritize the changes and drive an agenda. That kind of reimagination of workflows makes businesses disruption-proof, drives greater satisfaction across stakeholders, and allows for creativity to flourish. It starts you off on the journey to becoming a Model Business.

A critical barrier to reimagining workflows is the lack of digital tech awareness and skills in the workforce. The average line manager might tell you the challenges they face in their everyday workflow but may not know the possible technologies that could resolve it, nor would they have the skills to deploy such tech at scale.

And it’s not just the organization’s problem in this case; the tech industry has contributed as well. If you’ve read digital tech product literature in recent times and come out thinking it looked like English but wasn’t actually, I wouldn’t blame you. For very long, the technology sector has been addicted to jargon that obfuscates what they do more than explains it. As a result, even the most willing business leader will feel daunted when they start to immerse themselves in tech.

What adds to the challenges is that even if you identify your business’s issues and somehow zero in on the solutions to address them, you are likely to face resistance to change within the organization and could end up with inadequate or non-uniform adoption of the technology across functions, markets or levels. This can create an incomplete picture and a misalignment within the organization.

Lastly, organizations often evaluate the technology solutions on extremely rational parameters, not accounting for differences in user experience quality between the tech solutions. As a result, you might end up buying a solution that can ‘do the job’ but is clunky, poorly designed, or buggy. That kind of user experience will only reinforce the resistance to change that your workforce is feeling.

Suggestion: Invest in the user and the user experience.

This suggestion is equally applicable to both; the client business and the technology vendor. I tend to look at this investment in three ways:

  • First, invest in listening and learning from them.
    Talk to the workforce at different levels. Understand their challenges and concerns. Take time to assess their current technology awareness and familiarity. And lastly, learn the language that they speak because your solution will find a lot more acceptability if it’s speaking the users’ language.
  • Second, invest in usability.
    There’s a lot of digital technology out there; many solutions to the same problem. Don’t evaluate it all only on quantitative or measurable parameters; keep some qualitative measures in play as well. Get a few end-users to sit through the demos or get them to test-run the solution. Have an open-ended conversation about what worked and what didn’t. Ask them about the issues they felt and which ones were ‘deal-breakers’ v/s which ones they could ‘live with.’ The more your end-users are comfortable with the solution and find it easy to use, the greater the likely acceptance.
  • Third, invest in design and emotion.
    We judge a book by its cover all the time. It’s the same with digital tech. Think about the kind of digital technology your workforce is using on a daily basis in their personal lives. Most of the apps, software, and interfaces they use are designed to look attractive, intuitive, and minimize user effort. Compare your chosen solution and decide if it comes close to the digital tech your workforce is already familiar with. If not, then find ways to make it more user friendly, from the appearance, architecture, amount of choice, and the fluidity of use to the tonality of interaction. Lastly, don’t underestimate the power of telling the right narrative while introducing the solution within your organization. The way it is positioned in people’s minds will go a long way in driving acceptance and trials.
Businesses often invest in ‘tried and tested’ technologies and can deliver on all their needs today. But what about the future? What about when the shape of the business changes and the need for the solution too? More often than not, businesses evolve in unpredictable ways and at a rapid pace; And the tried and tested technologies that they relied on start to become less useful and eventually become obsolete.

These legacy systems may have been the ‘sensible’ answer at the time of purchase, but over time, they can become a force that holds a business back instead of propelling it forward. One of the reasons is because the buyer is qualified to evaluate the system on current needs and not on future possibilities. What’s more, the temptation to choose ‘what is popular and proven to work today’ often means that you’re buying a solution that is already on the downward journey of obsolescence (and considering Moore’s law as a parallel, one can expect the journey to be a quick one).

Suggestion: Don’t just buy the solution; look for value in the roadmap as well.

When you’re considering a digital technology solution, don’t just look at its present avatar; look at its history and future roadmap as well. Has the vendor been regular in feature updates and technology upgrades? Have there been too many patches and bug fixes along the way? Have there been any rollbacks? What is their innovation and evolution roadmap? How are they planning to empower their users going forward?

The product roadmap might hold the promise of exceeding your expectations. On the other hand, you might have an excellent product to meet your needs today but minimal visibility of what to expect from it tomorrow. It needs some judicious thinking on the buyer’s part to decide which of these is a better bet. And the stakes are not just monetary. Once bought into, the business will probably invest more time and money into deployment and training than it did in the original license cost of the digital tech itself. In such scenarios, the wrong choice or the one that doesn’t have a long-term horizon can prove quite expensive and painful to the business.

This last barrier is one of my pet peeves. And like barrier #2, this one also is shared blame between clients and technology vendors. In most businesses, digital technology is considered a domain. Some folks call it the IT department. Others call it fancier names, but the crux is the same —that technology competence resides in a vertical in the organization. Therefore all new technology adoption tends to get routed through that vertical.

This is a major issue because the IT department may not be intimately familiar with the business and the everyday workflows. Yet, they are tasked with keeping the business at par with and ahead of competition from a technological perspective. What usually happens is the lack of business understanding at the IT end and the lack of technological understanding in the rest of the business. This means that IT is spending most of its time just keeping the system in running condition and solving issues that individual users ought to figure out themselves. You have seen enough cartoon strips, memes, and real-life situations to know that this is true.

As a result of this structural flaw within organizations, business leadership is not adequately qualified to evaluate technology; technology leadership is not adequately armed to decide what product/solution is best for the business.

Suggestion: Technology as a culture, not a function.

The world is waking up to how integral digital technology is to our lives and how much more it will be going forward. That’s why you see children learning to code alongside arithmetic and grammar, and even badly made coding lesson videos are getting millions of views on streaming platforms.

However, the average organization is yet to make digital technology awareness and appreciation a part of its mainstream culture. Technology is so integral to life and business that it can no longer remain inside a single function — it needs to become a cultural attribute within the company.

There are several ways to incorporate tech sensitivity in the organization. The leading ways amongst them are:

  • Incentivize new technology discovery and adoption amongst the business folk
  • Make tech consciousness an evaluation criterion for employee appraisals
  • Encourage gamification and healthy competition within the organization to drive faster adoption rates
  • Make skilling, upskilling, and reskilling part of your business plan

In conclusion

A painless transition from Business Model to Model Business thinking that balances do well and do good objectives can only be achieved if businesses embrace digital technology to overcome their inherent inefficiencies and empower stakeholders to do more with less.

Technologies like AI, Machine learning, Automation, remote working platforms, predictive analytics, and bots are already reshaping the business landscape and making this balance possible as we speak. However, to realize their true potential, businesses need to stop reactionary and haphazard approaches to technology adoption. Instead, they need to make digital technology adoption a cultural tenet and inspire the workforce to think of technology as an integral element to business workflows. This requires a multi-faceted, long-term strategy that is user-centric and accounts for technology as an integral part of the business model.

Companies that can achieve this are likely to enjoy better employee satisfaction, customer loyalty, operational efficiency, innovative thinking, and sustainable growth. Sounds like the kind of business I’d like to be in.