To remain relevant and resilient, companies and leaders must strive to build business models using three key components for growth.
In the face of a global health and economic crisis, many traditional companies have suffered tremendous losses, and some have shuttered their doors. Those that heavily rely on physical capital (for example, stores, goods) and human capital (for example, services) were already vulnerable in economic downturns. The pandemic has exacerbated the lack of resilience in these business models, which have struggled to compete against digitally centric companies that can leverage data and machine learning to create valuable insights, intelligence, and capabilities across the organization.
For instance, compare companies whose products are like air (customers rely on them all day long for business, personal, or financial use) with those that are like haircuts (customers use them sporadically; they are nice to have but are not critical to their needs). Those in the former category that are being used constantly with little effort have proved to be resilient even in times of crisis. We typically know these as software-as-a-service (SaaS) products, such as Salesforce for business or Amazon Prime for consumers. In addition, those companies that combine SaaS with multisided platforms (like marketplaces) to fulfill their customers’ needs through a network of partners (such as Apple’s developer network) have an added advantage. These new, three-pronged models go far beyond SaaS and include the following: