Thriving in a we-economy
The products that drove the industrial economy are becoming commodities: They have matured to the point where it’s hard and expensive to squeeze additional value from them. Instead, new value and growth now comes from connecting and combining technologies to create broader solutions, starting from the customer’s perspective.
Industrial products were mass-produced, one-size-fits-all. Now, value is increasingly created for specific customers in a specific context, here and now.
Rather than thinking in terms of standalone products, customers will buy devices and services that fit together with all the other stuff they are using – and the value they derive emerges from the interaction between large numbers of companies, often from very different sectors. Just consider how many providers are involved and coordinated to enable the services that are available on a smartphone.
In the global market place, pressure to deliver more for less is as high as ever, and as we go forward, the demand for efficiency will only increase because of growing concerns about the environment and the tightening supplies of natural resources and energy.
Computers and connectivity are making it cheaper to coordinate and orchestrate transactions widely, with great precision and efficiency.
In all industries, products are digitized, networked, and equipped with sensors. They are exchanging data and coordinating, to compose solutions that are adapted to individual and local demands – but drawing on global networks and a wide variety of resources – including input from users themselves.
A new approach to meet new conditions
To thrive under these new conditions, companies need a new approach to business and value creation.
The main characteristic is a shift from a ME perspective towards a WE perspective.
This means seeing yourself as part of a much wider set of stakeholders, and understanding that your success depends on the success of all others involved in creating a common solution.
Taking a we-perspective means realizing that you cannot create complex solutions alone, and that opening to co-creation with other stakeholders, including users, will give you access to greater insight at a lower cost.
Thus, the we-approach is one of interaction, collaboration and interdependence.
This in turns implies that businesses need to rethink the way they organize value creation.
- Focus shifts towards processes and applications, rather than providing finished products. Design is largely about creating and contributing to tools, services, platforms and systems that make it easy for a wide range of participants to join and contribute to creating the results they each want.
- It’s a participatory economy, based on a much deeper interaction action between producers and consumers. The traditional, industrial-era division of roles and responsibilities between suppliers, manufacturers, users, and customers are blurred.
- Openness and sharing is a prerequisite for developing and operating a We- economy business concept. However, when knowledge and resources are shared, the ownership, rights and profits from activities are not so straightforward.
- The motivation to contribute knowledge, effort and other resources is not purely economic. Participants may equally be driven by the desire for recognition, by professional interest, social interaction or a wish to help others. Concerns about sustainability, minimizing the waste of resources and the environment in general are also important as motivation.
- Leadership and decision-making happens across organizational boundaries in networks, that can include not only the individual company's own employees, but also workers from other enterprises, volunteers, public servants, users, suppliers and customers.
- With less central authority or ownership, control of the process is replaced by influence.
- The connection between efforts and pay-off is less direct, and investments must be seen in a wider and longer-term perspective when you are contributing to make the ecosystem, which you are ultimately dependent on, thrive.
- A different set of skills is required. The traditional, rather passive and reproducing role of workers and consumers in the industrial age, need to change towards more personal initiative, assuming responsibility, sharing, communicating and creating.
Elements of a new normal.
Interestingly, these characteristics are very visible in a number of new and often overlapping approaches to business, which have had considerable success and attention recently.
The sharing economy matches idle resources with needs. Access to use is more important the individual ownership Instead.
The maker movement is democratizing innovation and making it possible for virtually anyone to develop, manufacture and sell products.
Co-creation and broader participation in the development and production of solutions is possible in digital networks
The circular economy sees business as an ecosystem where everything and everyone are ultimately interrelated and interdependent.
Social enterprises work to make services and goods accessible to as many people as possible – rather than maximizing profits.
A lot of experimentation is going on, and not all companies and business models will have staying power. However, looking at the big picture, it’s hard to imagine that elements of these approaches will not become part of the new normal way of doing business.