Business Design:

Business Model

New Business Models

for the Era of Rampant Change, Knowledge Enterprise, Pervasive Globalization, and Increasing Complexity

Why New Business Model?

The old principles no longer work in the new economy. Businesses have reached the old model's limits with respect to complexity and speed. The real problem is "a ruinously dysfunctional mismatch between today's business environment and the classic business model... Quite simply, the wrong model may transform a company into the vehicle of its own death."²

Great shifts – genuine and radical transformation – have been shaping the economy and business environment in recent decades. Technology, especially information and communication one, has radically altered the requirements for building and managing a successful business. In this new business climate, although the basic command-and-control business model has survived, it has lost its effectiveness significantly.

The successful companies in the future will be ones wise enough to harness the full potential of the entire organization in the rapidly changing business environment. "The world is going to be too tough and competitors too ingenious as companies are shaken loose from traditional ways of conducting business. T winners will be the unbridled firms that are responsive to challenges and adroit in both creating and capturing opportunities. To match a business environment that is more networked within and among companies, the ability to manufacture value will have to be distributed across the company to much a greater extent than in the past."²

New Focus

Today's most successful executives, while still greatly concerned with cost structure, maximizing operational effectiveness, and business process reengineering, have shifted their focus to issues of how to build capabilities for faster growth, how to attract and retain the best people, how to develop leaders at all levels in the company, how to manage knowledge effectively, how to become a true learning organization, and how to be more effective global corporations.

The new business model has much stronger focus on the basics of what ultimately creates value today – people, knowledge, and coherence.² It fosters the creation of value and ensures that each piece of the business contributes to system-wide value. It also goes beyond the workplace and the interface between government and business and looks into building a favorable social climate within and around the company.

Many leading companies around the world have made attempts to evolve a new business model. While the paradigm is shifting, it has yet to reach the new stable state however.

Harnessing the Power of Diversity

Diversity is a specialized term describing a workplace that includes:

• people from various backgrounds and cultures, and/or

• diverse businesses.

You can find a strategic competitive advantage in an organizational and cultural context by seeking to leverage, rather than diminish, opposite forces.