I keep running into people that have 1 core problem but it’s getting mixed up with 2 problems. One problem you have control over and the other one you don’t. Many people I’ve been speaking to combine these two problems into the same sentence at times. So what’s up?
When the economy is unstable, there is a lot that can come unglued in the business model in terms of functionality and reliability as well as cost vs price components. Case in point: Uber used to be in the business of delivering people and now it’s attempting to adjust – it has not been easy.
Let’s talk about the real issue: The customer unmet needs are drastically changing Which drastically changes the customer value proposition. Once that part comes unglued everything else about the business model we’ll have to change. There is no way to create efficiency in a business model when the customer value proposition doesn’t make sense anymore.
The business model is based on 4 key elements: the customer value proposition, resources, processes, and the profit formula. All of these things must balance. when customer demand changes, which you have no control about than the things you do have control over must respond. The challenge is if you don’t have detailed information about customer demands, it’s hard to create a customer value proposition that will adapt.
In times of stability and when customer unmet needs are predictable, we tend to rely on ‘data of the past’ and there’s very little need to change. It’s more about maintaining a deliberate strategy and executing efficiently. This is what lets businesses grow wildly. When things shift dramatically as they have, the challenge becomes the profit formula of the business model?
The world we know is always safe, the world we don’t know is the problem.
Many of the people I have spoken to recently are looking for efficiencies from the world they know. Can you make Google more efficient? Or whatever process or product or Media or sales functionality. Like there’s some hidden 50% efficiency hiding somewhere. I recently saw one document listing dozens of incremental efficiency requests (expectations). Sadly, the messaging of that company was so inward, I doubt anybody is figuring out the brand value and purpose.
What is needed is understanding customer unmet needs rapidly and using predictive theories to get there in a hurry. If you’re using data of the past to create these predictive theories you’ve got a problem.
Ironically, by creating theories about customer unmet needs using customer psychology, you create an environment that moves the organization from uncertainty to prediction to certainty. why is that the case? Because you were rapidly evolving customer unmet needs into a new customer value proposition. In turn, that creates a total addressable audience and a look-alike model can be quickly established once the emergent strategy takes off.
No doubt, it’s time for a change. It doesn’t need to be so random.