Over the last few years I’ve developed an unhealthy obsession with bringing business model disruption into everyday working scenarios. Particularly the concept of platforms for mass consumption. The basic idea, at a market level, is pretty simple: can you reinvent a business value chain by creating a direct connection of provider and customers while effectively turning your providers into customers too? Ok. I’ve just re-read that too and it’s not an easy sentence to follow so here is an example that I like to use.
It’s the year 2000, Nokia makes phones and it’s customers are the people that make the phones. It procures software and hardware from a multitude of partners around the world. This year – it commissioned a new phone (the unforgettable and indestructible, 3310). To help with sales they commissioned a new game for the phone which was built by one of their partners. They called it Snake! The hope is that if people liked snake, it would help them sell more phones. This was the status-quo value chain at the time. Software provider -> manufacturer -> Customer. The customer never interacted with the software provider and, more importantly, the software provider had nothing to either gain or lose should sale numbers of the Nokia rise or drop. Nokia took a risk and would be awarded all the benefits if snake fans across the globe rushed to buy the new phone. Simple but really limited. The phone had 1 game (some had 2 or 3 other ones if you got lucky) and no company could afford to scale up the number of games or applications that they included in every phone. Also software developers were trying to please the manufacturers, not the end customers.
Roll on 2007. In comes the iPhone with a staggering (at the time at least) 552 apps to choose from (and only 135 were free)! Apple disrupted the market not because the phone had only 1 button, but because it transformed the economic value chain of the industry. All apps were developed by different companies who could suddenly engage directly with end users. Attracted by the lure of potentially unlimited sales of their app – developers instantly became customers, paying apple for the privilege of selling their software through the iPhone.
Today there is no limit to the amount of apps that could be made available to smart phone users; a concept which would have been unthinkable had the value chain not been altered.
Learning to disruptor:
What apple did for the phone industry has since been replicated by many others who have simply asked themselves “who are we connecting?” and then removed themselves from the equation. Uber has connected people with a car with people that need a lift (making money out of both). Airbnb is connecting people with a spare room with people that need a room to sleep in. TransferWise are connecting people who want to swap pounds for euros with people who want to swap euros for pounds. In all cases – these disruptors are making money from the connection rather than direct sales and all of them are infinitely scalable - If tomorrow the number of apps available on the i-phone suddenly doubled, apple wouldn’t need to spend a penny.
In our own jobs we can do exactly the same by asking ourselves “who are we connecting”, creating or becoming a platform to manage that connection and finally making the attraction valuable to both parties. As head of Insight at The Forum I feel that my job is to connect people who know how to analyse data with those that can use the insight to make a positive difference for their organisation (generally our front line agents). Just like the people that wrote Snake for Nokia, our data analysts currently receive a salary to provide insight – be the insight good or bad, effective or not, that salary is broadly guaranteed. At the other end agents have no choice as to which insight they use to help them improve – they simply accept what is given. This model is neither flexible nor scalable – to present our insight in a multitude of different ways would be too expensive and there is no real incentive in the agents population to cycle through 50 iterations of a report to pick the one they like.
Over the last decade we have seen huge development in technology that helps us share insight within our organisations. From business objects, to power BI, we are creating spaces where people can self-serve and “pull” information on demand without waiting for someone to email them a report. This is important progress but we are often still limited in what that data shows us and the motivation to improve choice and impact is still relatively week on both sides of that connection. To shift this further we have to create models where the raw data, rather than the pre-analysed results are made available to all. This will mean that anyone in the organisation who knows how to use a pivot table, can start to muck about with data, to see what they can find. As this happens we need means to give everyone access to the insight generated by anyone else, along with the means to provide feedback and rate the quality or usefulness of the insight provided.
You will inevitably find people in your organisation who just like playing with data and who will spend hours looking through numbers just to see if they can find something new. Just look at Wikipedia for an example of how far good will can take you! I believe that the big changes though happen when people can profit from the operation. It wouldn’t even take much though – Imagine if you told your people that for any cost reduction driven by their improved productivity, 50% of that saving for the year will be shared with them. In the UK the average fully loaded cost of a front line agent is just shy of £30k. How motivated do you think people would be to improve their productivity by 10% in a year, if they thought there was £1500 waiting for them as a reward? Would they be motivated enough to scroll through different productivity reports and read through multiple sources of insight, just to do that? I think so. Certainly more than they would do now.
Creating a reward framework like that isn’t something that most organisations would be able to do easily but in some form or other, those are the mechanics that we should try to replicate if are serious about disrupting our own operating dynamics. I want to move away from asking “what report should I prioritise” and ask “how can I create all the reports we might need and more with no fixed cost for our team?”
In the Forum we are pushing this philosophy as much as possible. We connect people with knowledge and experience with those that need it through L&D. We connect people with time on their hands with people with short deadlines through our professional services. We connect the creative minds with people with a can do attitude through our standards, conferences, awards and online groups to help raise professionalism in our communities and we’ve been doing so for the whole millennium.
Who are you connecting?
Author: Bob Stella
Date Published: 28/09/2018