Firms advised to review business model as life isn’t returning to normal

Enterprises should revisit the viability of their business model as the pandemic has precipitated lasting changes with little possibility that things would return to normal, advises an innovation expert.

Azim Pawanchik, an innovation strategist at Alpha Catalyst Consulting in Malaysia, said business owners need to scrutinize their business model to see if it still meets the demands of their customers, who have themselves undergone a dramatic shift in lifestyle due to the pandemic.

As an example, he said gyms have reopened after restrictions were eased, but the customers are no longer returning, out of fear or because they have already bought workout equipment for their home.

Azim said businesses, including small and medium scale enterprises, can take their cue from how successful companies in the platform economy, such as Grab, Gojek, Airbnb and other startups operate.

Azim, speaking at an Asian Productivity Organization dialogue, urged enterprises to adopt the new approach towards work that combines analog and digital, noting that “not everything can be fully digital.”

This, he added, holds true particularly in sectors like retail, tourism and healthcare, where high physical interaction and physical work is required.

He stressed that the hybrid model of work is “here to stay because over the past months a lot of organizations have transformed where a lot of their work can be done virtually.”

He noted that the fusion of analog and digital has been widely adopted by exponential organizations. These are companies in the platform economy that grow at an above-average rate-up to ten times faster than comparable companies in the industry-but can make do with considerably fewer resources, thanks to new forms of organization and the use of new, especially digital, technologies.

Azim said exponential organizations stand out from the competition because of certain identified internal and external attributes or characteristics.

These organizations usually have staff on demand only, such as independent drivers or chefs. Rather than hire their own employees, they leverage external workers in order to increase speed, functionality, and flexibility while decreasing fixed costs. They utilize “leveraged assets,” in which they access, rent, share or outsource assets to stay nimble and reduce capital expenditures.

These firms also use algorithms and automated functions including machine learning to get new insights about customers, products and processes.

They also engage their customers’ interest through games, incentives and prizes to generate positive feedback.

Azim added that to operate like an exponential organization, a company must have key internal attributes including having dashboards and interfaces “for you to be able to connect to the external world.”

The company must also be willing to experiment with new ideas and processes to see what works and what doesn’t in the post-pandemic era.

It should also subscribe to the concept of autonomy, which prescribes a flat structure to allow individual employees or self-organizing multidisciplinary teams to operate effectively.

It should also tap into social technologies to allow real-time, transparent conversations and connections across the organization.

While this new approach may be nontraditional, Azim said there are advantages for the company that adopts it. “Your costs will be low but your reach is high and you can scale [up] quickly.”

Stressing that “the future is already here,” he urged companies to “explore a new way of doing things which is much more efficient, better for the environment, for the community, instead of hoping things will recover back to normal.”

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