Are there times when the ground rules of our businesses seem to be changing around us yet we do not seem able to anticipate the nature of the change? Anything that can help us to understand the situation is useful and here is one model for you to consider.
Most of us are born with a set of capabilities and we spend much of our lives using those capabilities to interact with our fellows, sometimes collaboratively and sometimes competitively. Almost always we are seeking to use our capabilities to the best effect and mankind has a long tradition of discovering and developing tools to give us some sort of edge. Useful tools are widely and rapidly copied so we develop the capacity to produce the tools in greater numbers.Typically we will set up some sort of system for production, supply and distribution; historically these have often been fairly informal but as the pressure of demand has increased they have become more and more formal. Experience has shown that once capacity has been established and the consumer community becomes used to products or services they begin to demand the ability to customise them – the ability to meet this demand has led to the development of customisation . But there are instances where the consumer wants to exercise greater control of his or her own destiny and this has been shown to be possible where the necessary networks can be put in place to provide direct support to the consumer. There seems to be a progression; we use tools to add capability, then we apply a system to achieve capacity, then we develop logistical skills to meet the demand for choice and finally we use networks to gain control of the resource we have developed.
Basic landscape concept
Take for a simple example our ability to walk; how do we overcome the limitations of speed and range that our physical bodies impose? In the first instance, we began to exploit an animal which was physically capable of carrying us further and faster than we could walk or even run. Even so there are limitations as riding requires skill and is physically demanding. In due course a number of us opted for travel by carriage – but here economics steps in because by this time such an option was only open to the wealthy. The introduction of cabs in cities extended access and a gradual increase in demand led to the establishment of stage coaches that operated between urban centres.
Jump now to another, more recent development track. In the late 19th century the motor car came onto the scene. This promised great mobility to anyone who could afford one, subject to the availability of fuel and the reliability of the machine. It rapidly followed the evolutionary progress of the horse enabled movement, with motorised cabs and omnibuses quickly replacing their horse-drawn predecessors. What the motor car (or more properly the internal combustion engine) offered over the horse was the potential for series production and this over the course of the 20th century has reduced the cost of ownership so that car are available to almost any person in a developed economy who wants to own one.
Mobility/transport landscape
If there is a development track for the aids to movement there is also a development track for the production of such aids and for the complementary capabilities that make the widespread use of such aids possible – in the case of cars these include production lines, dealers, service stations, repair and service shops, roads, tyre depots, loans and insurance companies, etc.
What is interesting here is that in a developed industrial and urbanised economy, the universal ownership of a horse as a means to mobility never materialised – possibly because a network for supplying, feeding, maintaining (blacksmiths, vets, etc), housing and managing waste was not economically sustainable. However there is virtually universal access to car ownership in such economies and established a new basic skill level – we learn to drive almost as automatically as we learn to walk. I will add a couple of observations, for what they are worth. From a cultural perspective walking, owner ridden horses and owner driven cars all offer mobility whereas the omnibuses and cabs (and trains, planes, etc) offer transport – so they result in a very different user experience. Secondly, another interesting element of the landscapes is that established capabilities in one area may become a key enabler of the emergence of another – so mass production has become a key enabler of, for instance mass ownership of cars that gave individuals back control over their movements at a greater level; likewise the mass production of electronics has brought computing power and communications capability to individuals – and the model does not apply only to manufacture but also to service industries.
So why is this of any interest or of anything more than passing interest?
Where is your product? Where are your products? Are they mass produced? If so, are your customers about to demand choice, customisation? Are you able to respond to such a demand? Can you anticipate it and drive it to gain a competitive edge? What might it cost to do so? Is the time right? Are you providing a service that supports a product or products? If you changed the way that the service is offered, what might happen? Where are you on the capability, capacity, choice, control continuum? Is the infrastructure in place to support a move from one corner of the square to another? If you don’t know, how can you be sure what impact any changes you make to your business model will have?
Please let me know if you find the model useful or if you think it is worth improving, extending or both and would like to discuss ideas of how to do this.