Rethinking Your Business Model

What should you do to rethink your business model?

The changes required in different business models have only been adopted by organizations capable of being disruptive when redefining what has traditionally been done in their respective sectors.

Over the last decade, economic sectors and markets for goods and services have been characterized by changes in the factors that determine a company’s viability. Traditional factors—from organizational competencies to the ability to incorporate new technologies and management trends into production, commercialization, and service—have evolved so rapidly that they will continue to reshape the post-COVID-19 market, eliminating players resistant to change. Three out of four S&P 500 companies will be acquired or disappear by 2027.

The changes required in business models have been adopted only by organizations capable of being disruptive when rethinking traditional practices in their sectors.

A disruptive organization is one that interrupts or radically changes the usual way of carrying out a process or activity to present a different proposal. Unfortunately, many local entrepreneurs remain in their comfort zones, and without reacting, they watch their market shares vanish or their customers switch to competitors.

When the need to change the business model becomes a priority, the entrepreneur or CEO must consider a second perspective: that of a third party, whether or not they are a member of the board of directors. Ideally, the support of an advisory firm facilitates this process.

What to do?First, the company’s top management must rethink the business model, subjecting it to diverse perspectives and incorporating challenging objectives. Exploring new markets or products is key, especially when previous investments have not generated the expected return and parallel projects are needed to diversify risk.

The search for new market niches must be an immediate priority. Without finding new markets or clients, business vulnerability increases, as companies disappear when confined to maintaining the same portfolio. In other words, the risk of being displaced from the market persists as long as new products or services are not developed.

When management and partners are willing to redesign, internal processes must be rethought based on new analyses of market demands and customer expectations. In the short term, innovation and pilot testing should be prioritized.

Customer Experience Design (CX) is essential when launching new products, services, or portfolios. It is necessary to build on customer experience, tracking their interaction with the company, product, or channels to ensure satisfaction and expectations are met.

Assessing organizational capacity is vital during these strategic exercises. When management genuinely intends to evaluate its own leadership and decision-making environment, change becomes deeply rooted. Board members and executives should reexamine their skills in light of the new market environment before implementing strategies.

Finally, rejecting change based on past successes is no longer justifiable. Only organizations capable of adapting to new market demands—even at the cost of lower profit margins—will remain. Those that cling to past practices risk being left behind.

Gilberto Caicedo Business and Financial Consultant

#BusinessPerformance #CEO #BusinessManagement #StrategicManagement #BoardOfDirectors