Just one example of how new business model innovation can disrupt an entire industry
Melinda and Bill Gates were interviewed this past week regarding their foundation’s support of the search for, discovery, and distribution of a global vaccine.
His comment: “we’ll have one by the end of next year!” That’s the end of 2021 in my calendar.
The Global Vaccine Alliance, similarly, estimates 12-18 months before a viable solution can be distributed.
Many credible sources believe that although we may phase back in some of our previous social norms, the consumer confidence to come back to business models that are predicated by physical proximity may take months, if not years!
That means theaters, restaurants, dealerships, sporting events, places of worship, travel/tourism, and yes, even closer to home, conferences, leadership retreats, and executive education classrooms. And millions of workers in these sectors and leaders in charge of their post-CO19 New Norm roles?
Many enterprises need to rethink, reimagine, if not reinvent their value proposition and business models now.
The Challenges
Our lives will not fully return to normal as we knew it until there is widely available testing. An effective vaccine is developed, manufactured, and distributed globally. We may cautiously stagger reopening parts of our economy, which may lead to a second wave of outbreaks in the fall/winter. The exhaustion of limited healthcare workers as we continue to kick elective procedures down the road until they all become emergencies could be the impetus for a third wave. These scenarios will renew physical distancing and further exasperate any stimulus in reigniting our global economy.
The Opportunity
Sandbox a portfolio approach to different business models based on the needs you hear from critical relationships you value, respect, and trust.
How? You need to rethink your business model dramatically. NOW. Not next week or next month, or we’ll get around to it. NOW.
Let me give you just one example from our family’s experience this past weekend. If you’ve heard me speak, deliver an interactive online roundtable, or passionately engage an executive education audience, you know that I ride motorcycles.
Over the past decade, I’ve bought and sold some 20 bikes, have attended a dozen training schools, have fallen four times, including two visits to the emergency rooms. My kids, now 18 and 16, have been riding with me since they were 6 and 8 years old. They, too, have attended a half-dozen safety training courses, many by the Motorcycle Safety Foundation. We wear all the gear all the time, including airbag vests that deploy if you’re physically separated from the bike in an accident – see an image of the three of us below. They’re now both eager to get their bikes and ride with me. Which would represent two new motorcycle purchases.
Today, there are predominately three ways for you to get your leg over a motorcycle saddle.
- Outright buy one – don’t get me started on the antiquated “what will it take to get you on a bike today” cheesy sales tactics of the entire industry’s dealership model. Most visits to a motorcycle dealership are cringeworthy! And I’ve personally visited 92 of them as part of several client engagements.
- Alternatively, you can borrow a bike from a friend – not likely. There is an expression amongst motorcycle riders that you never ask to borrow one’s spouse or motorcycle!
- Tour companies will rent you a motorcycle for expeditions, and more recently, a rental company has emerged with limited locations and fleet, offering a rental-car-like model with the same set of aggravations.
I’ve been begging and pleading with the motorcycle industry community to consider business model innovation opportunities – as a global advisor and a passionate rider ever since I keynoted their industry gathering back in 2012.
Yet, many in crucial leadership roles continue to lead as they have for the past several decades. With an accelerated journey toward obsolescence, as year-over-year figures show a steady decline in ridership.
With that context, let’s revisit our family’s experience this past weekend. A friend recently rented a beautiful bike from a Twisted Road member – a new website that allows those who care to, to list and rent their bikes.
There are countless motorcycles of all shapes, sizes, years, and riding styles listed across the globe. So, when our family was considering a physical-distancing safe entertainment option, compliant with our state’s current shelter-in-place guidance, we found out that motorcycling is regarded as a sport and allowed with immediate family members. And Twisted Road had a beginner bike listed less than 5 miles away from our home.
With a few clicks, verification of my contact info, a $1,000 deposit, and roughly $100 for the day, including insurance, I was able to secure a motorcycle in about 10 minutes. We picked up a 2019 model Honda motorcycle on Sat. AM and rode the entire day. It was ear-to-ear smiles by the time we wrapped up that afternoon. And the bike owner couldn’t have been more delightful to transact with. We promptly returned the bike and agreed to do it again.
Here’s the punchline: It would take 30-50 single day rentals for me to justify buying the same bike, not to mention insuring, storing, and maintaining it.
So, the dealership will continue to be a showroom. The rental business may as well as close their business. And long-live the sharing economy. And yet, every one of the OEM manufacturers could have launched the same service, using their dealer networks, an insurance co-creator, and an ounce of courage to think and lead differently. Guess they’ll continue with their scantily clad dressed calendar women ads in industry publications trying to engage a dying breed of boomer riders. Ask Harley how that strategy is working for them.
The time to innovate your business model and create a portfolio approach to designing, developing, and deploying business model tests is now. Don’t become another relic of the pre-CO19 businesses if not industries who couldn’t move with the required speed and agility.