Business model

Business model innovation meets hybrid work

Many industries are changing. At the same time, new forms of work and hybrid work must be organized. As part of my series on business transformation and operational excellence trend map, I take a closer look at the synergies of business model innovation and new work initiatives.

You can download your copy of the ebook with the detailed Trend Map for Business Transformation and Operational Excellence here.

Trend map for new work and business model innovation (Source – Software AG)

Many industries are facing major challenges and upheavals that have a huge impact on their business models, requiring business model innovation, but also on their production methods and work processes. Here are some examples :

  • Throughout the global Covid-19 pandemic, supplier and distribution networks have proven to be both a bottleneck and a vulnerability. In contrast, “hyperlocal operating models” seek to concentrate their business activities, such as the acquisition and delivery of products and services, in a small geographic area.
  • Climate change poses major challenges for companies, forcing them to adapt their production methods and often their entire economic model. “Neo-ecology” describes the major trend towards a sustainable and resource efficient economy.
  • The traditional retail industry is experiencing a continuous migration to online retailing. On the other hand, new business models are emerging to fight against e-commerce, such as experiential gastro formats in food distributors.
  • In banks and other financial service providers, the closing of branches and the success of online brokers and fintechs are dramatically changing the requirement profiles of employees.

The pandemic has also dramatically changed working conditions in many sectors. Along with the massive demands placed on families to meet the challenges of the pandemic, we are also seeing increased flexibility for employees as to where and when they are ready to work, which has given rise to hybrid work models.

On the other hand, new alternative forms of work are appearing under the title of “new work”, a collective term which dates back to the social philosopher Frithjof Bergmann. In particular, the concept encompasses new forms of work which are shaped by today’s knowledge and information society.

What synergies can these two megatrends develop and what benefits can result for employees and organizations?

It is evident that digitization plays a major role in managing these changes. During the pandemic, many analog face-to-face contacts and interactions were no longer possible and were replaced by digital process steps. Workers were challenged to learn new digital skills and to work remotely and in virtual collaboration. It is the common task of companies and employees to continuously improve digital skills, applying the use of virtual conference systems, for example, and the employee experience in a human-centered approach.

In addition to increasing skills in digital technologies, business processes themselves are also evolving as the need for agility and speed continues to increase. How can practitioners ensure that the “new way of working” really reaches every employee and manage the deployment of role-specific knowledge?

Here too, digitalization offers new opportunities to take employee empowerment and involvement to a new level. Manual organization manuals have had their day. Digital portals allow access to role-specific knowledge and allow very rapid distribution of updates. Conversely, the digital dissemination of policies and work instructions also allows headquarters to analyze at any time whether new operational procedures have been received, read and understood. Typical areas of application can be found in all large distributed organizations, such as retail companies, which have sometimes had to react weekly to amended Covid-19 guidelines and ensure that regulations are implemented in each branch.

Rapid dissemination and updating of knowledge is vital for almost any industry and process automation is the next step. In scenarios where routine work is predominant, workforce optimization tools can dynamically distribute tasks among employees. Digital Process Automation (DPA) platforms control end-to-end workflow processing. Documents become intelligent, which means that they themselves recognize the necessary procedures and find their way to the processor. Software robots are used in the automation of robotic processes, where knowledge can be turned into rules so that recurring work steps can be automated. Everything is measured and tracked with process and task exploration technologies to continuously improve these automatable processes.

On the other hand, in scenarios where creativity and flexibility are required, we see several developments which are closely related to the concepts of “new work”. Those who think about innovation do not think first of hierarchies, but of inspiring working conditions, lively teams, autonomy and personal responsibility. These include:

  • Cross-functional teams replace small-scale work and are in charge of end-to-end processes.
  • Interdisciplinary teams that combine domain knowledge with technological knowledge act in an agile and self-determined manner. These are the building blocks of business processes that set themselves apart from the competition.
  • IT supports the work of teams in various increasingly intelligent forms and components of AI are seamlessly integrated into business operations to support experts with specialized questions.
  • The transformation of AI from tools to teammates is a big trend supported by natural language processing (NLP) and virtual assistant technologies.
  • “Goals and Key Results” (OKR) is widely used as a collaborative goal setting methodology by teams and individuals to set ambitious goals with measurable results.

For many companies, it is about defining the differentiating factors of their future business models and reinforcing them with all their might, along with investing in intelligent and motivated employees. On the other hand, the emphasis is on automating non-differentiating processes as fully as possible to achieve cost advantages.