06 Aug 2018
Business models of the future are ones that will navigate the complexity of tomorrow’s world to help build economic and social systems where ingenuity, creativity and inclusion come together to help people unlock their potential and live well.
At all scales, from micro-enterprise to multinational, operating in multiple settings and contexts, rethinking business models has become one of the surest ways of offering customers something truly better than what already exists. It has evolved from a conventional modelling exercise to a way of rethinking the entirety of an organisation's value proposition.
What does value look like?
The task today for building business models that will thrive in the future is to navigate modern economic development and societal issues and in so doing articulate what meaningful, inclusive and enduring value looks like. In the past, a linear approach to business model design may have sufficed - inputs enter a logical process that creates outputs of value. Today, to truly deliver a value proposition that is able to flourish, an understanding of the way that complex adaptive systems come together to create both outputs and outcomes is required.
Updating the framework
In 2017, Business models of the future: emerging value creation
set out a framework for assessing potential business models. However, it now requires updating to reflect three cross-cutting themes:
- the advances in the changing nature of work and the role of automation
- the social and ethical implications of artificial intelligence (AI)
- the rising urgency of environmental risks that are reaching untested tipping points and materially impacting peoples' daily lives
As the scale of the impact of these issues comes into sharper focus, they are provoking more concrete responses from business, civil society and regulators.
12 characteristics have been identified that business models of the future are putting together in different combinations. These characteristics behind the models – and their 'plug and play' nature – can be understood as the driving force behind business model design.
Mindsets of the future
For professional accountants, being ready to make the most of these opportunities will demand new skills. Financial acumen, technical knowledge and ethical judgement are attributes that the accountancy profession can uniquely bring to support business model innovation across the three spheres of value proposition, value creation and value capture. But to navigate the contours of a changing economy, new mindsets are required. These include the ability to:
- think like a system
- understand how to capture and assess new sources of value
- build creative capabilities to think differently and problem solve
- adopt a long-term mindset