2016: Is it the year of the collaborative economy?

Big data CSC Blogs

I am really noticing a lot of “partnering” going on. Conversations, meetings, agreements, deals and with all sorts of companies — globals, start-ups etc. Well, of course I would see that in the job I do … but it is really something quite different now. I really believe it is connected to the new economic business models that are starting to take hold, which is driving a new way of working.

The old business model is fast coming to an end. Is 2016 when we will see the big companies making this transformation? And do organisations really understand what it will take? Well these are some of my thoughts…

So what is the old model?

The industrial age gave rise to systems of organisation and production that were ideally suited to manufacturing and process work: top-down, rigidly hierarchical, self-contained. Competitive advantage was created within the walls of the organisation. Those companies with significant financial resources become more and more dominant; they were able to access technology, IP and human resources at such scale, it was difficult for start-up or smaller companies to directly compete.

Re-interating some of the key changes that are impacting the old model:

  1. Two people sitting in a coffee shop can now affordably access the same computing power that was once only the domain of these large, global, dominant players.
  2. And using this technology, these same people can also readily access ideas, content, engineering, human resource, even funding. It can be crowdsourced or sourced from other people, investors or companies.
  3. At the same time, customers are demanding better experiences. No matter what industry, customers expect the experience to be assembled and curated. For example, take the current experience of buying a car. The buyer needs to go to possibly five different industry app destinations to stitch together their own experience — from the auto manufacturer, the auto dealer, to the lender, the insurer and government registrations.
  4. So these two people in a coffee shop can capitalise on unmet “niche” market needs, and establish a global market presence, thereby disrupting the leaders.

So what is the Collaborative model?

In broad terms, the emerging model has three tenets: excess capacity, new platforms and community marketplaces. Industries are responding to these and creating new business models. Sometimes it’s the established players adapting fast and maintaining their positions; sometimes it’s disruptive start-ups replacing the established players.

How can this play out? Let’s look at an everyday technology to describe this model: the smartphone.

  1. Unlock the value of excess capacity: Smartphones contain powerful microprocessors, far more than they need to function simply as a telephone and messaging device, perhaps with a camera, address book and media player thrown in. Instead, this excess processing power is used to run sophisticated apps, from complex financial and CRM systems to video editing and data analysis tools.
  2. Create new platforms: By opening up the features of the smartphone, new development platforms have arisen. These allow individuals and small and large businesses to access the smartphone’s features and create new value that aggressively scales the use of smartphones globally. This is your “Partner eco-system.” Building up and nurturing this eco-system is now a critical element to the business strategy for scaling product creation and also creates the network-effect necessary to scale globally.
  3. Community marketplaces: These platforms have given rise to new marketplaces, like the Apple App Store and Google Play, which are unified store fronts where buyers and sellers can meet. Importantly, these spaces are contestable: New marketplaces can arise, new products can be launched at low cost, and consumers can decide what succeeds and what fails. “Likenomics” concepts rule in this world, so promoting and maintaining a vibrant, listening and honest community will drive critical ratings, word of mouth, likes and recommendations that create customer trust and brand reputation and thereby grow sales.

Can the “old model” companies make it in this transformation? What will it take to become a Collaborative company?

I see a number of critical decisions (followed by actions) that need to happen:

  • Defining what customer relationships you want to own, and therefore what platforms are important to create and own. What and where will be your core value? What platforms will you participate in and source from as part of your value chain? What does your digital partner landscape look like?
  • Creating a culture of “outside-in’ collaboration. It’s not about command and control; its about influencing, motivating and incentivising people to commit to working together for a common goal.
  • Human-centred design to assemble and curate experiences, not only across internal silos but across different industries.
  • Embracing “Community” as the holy grail – and building and rewarding TRUST across users, suppliers, partners. This drives the “network effect” required for global adoption and scale.
  • As a side point, I think what is interesting to note is that most organisations will find that they need very different people to do the above. Not only different skills, but different behaviours and strengths; people who excel with ambiguity, people who are right-brain thinkers, people with high EQ and empathy. (hey I’m a women…and I think we’ll do great in the digital age 🙂

Think Big. Start Small. Trial, test and incubate these concepts in your business, but ensure that everyone knows this is your future business model. #BigIdeas2016


Systems integration is dead. Long live services integration!

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