6 Future-Proof Your Business Model
In January 2021, General Motors CEO Mary Barra shocked the global auto industry by announcing plans to phase out all fossil-fueled models by 2035 and make the transition to an electric-only fleet. She promised to spend $27 billion toward the goal “and to set an example of responsible leadership in a world that is faced with climate change.”1
At the time of the announcement, the world’s fourth-largest carmaker had only one electric vehicle on the market, the Chevrolet Bolt hatchback. Out of GM’s total global sales of 6.8 million vehicles in 2020, the company sold only 20,754 Chevy Bolts.2 But Barra’s team at GM had been slowly moving toward the electric-vehicle future for more than a decade. The time had finally come to confront the question: What business are we really in? Are we in the internal combustion business? Or is that just part of our legacy and how we have helped people move in the past? If we’re not in the internal combustion business, then we should not be wedded to fossil fuel consumption, and we ought to make the transition to a fully electric auto manufacturer, which is better for the environment and better for our common future.
“Our hope,” Barra wrote afterward, “was to excite and inspire everyone with the promise of an all-electric future—with the thrill of vehicles powered by electric propulsion and supported by advanced electrical architecture—reimagining what it means to move people and goods, including when there is no driver.”3
GM had made similar transitions in the past. Billy Durant, who founded General Motors in 1908, had made his first fortune as owner of America’s leading horse-drawn carriage manufacturer. He had been dubious about the early horseless carriages, but he also knew that they represented the future of transportation. Durant bankrolled GM from the riches he had earned as a maker of his soon-to-be obsolete carriages, just as surely as GM is now investing billions earned from the sale of gas guzzlers to build GM’s emission-free future. The company is in the business of transporting people and goods through software and electricity, and adjacencies that enable that movement seamlessly and sustainably with low emissions. That’s the story of its second century.
As you consider your role as a radically adaptable leader, it’s time to pause and ask yourself, “What business are we really in?” Consider approaching this question from a first principles perspective, and question your major assumptions about your business and your industry. Think of yourself as a toddler, consistently questioning every new experience. “But why?” It’s possibly the most annoying repeated phrase that parents must respond to, but a child’s healthy development depends on the child’s constant questioning of its perceptions of the world. The same can be said about you and your business.
It has been more than sixty years since marketing guru Theodore Levitt pointed out in Harvard Business Review that railroad companies were failing because they had failed their customers. Gorged on profits from their monopoly routes, the railroad barons assumed they were in the railroad business and saw the rise of other forms of transportation only as competition. Had the railroads instead understood their role as transportation service providers, they could have used their enormous profits to invest in cars, trucks, airlines, and related industries that reflected the evolving preferences of their customers. Instead, the railroad barons gradually lost their customers and then, one by one, their companies.4
So, what business are you really in? Do you define your business by the products and services you currently sell or by the benefits your customers value? Theodore Levitt was fond of saying that no one buys quarter-inch drills. Customers buy quarter-inch holes. You can make the best quarter-inch drill bit on the market, but you’ll have no customers if they find better ways to make quarter-inch holes. That’s why GM is no longer positioned as a maker of internal combustion automobiles but as a provider of electric mobility solutions that are valued by customers because they are effective for transportation and good for the planet.
Four Steps to the Future
In our Go Forward to Work (GFTW) interviews and focus groups with over two thousand executives, we heard repeatedly how the pandemic had forced many of these business leaders to rethink their long-held assumptions about their industries and, in some cases, completely reinvent the way they earned revenue. Some were able to reengineer their businesses and, within a year, made changes that might have taken ten years to accomplish otherwise. A 2020 survey by Dell Technologies suggested that 80 percent of businesses had changed their business models that year. Indeed, the coronavirus pandemic poured gasoline on the fire of digital transformation and accelerated many trends already underway, from the adoption of new technologies to the automation of many jobs.
From this research, we’ve identified certain common patterns of business model reinvention practiced by the most successful companies. We’ve developed a four-step methodology your team can use to question your current business model and advance it toward the future.
Engaging in this methodology is an effective way of leveraging much of the foresight work your team has done in the previous chapter. You want to accept your ten-year vision of your industry as your company’s preferred future state and then start experimenting toward that vision. Each year, as your team engages the pertinent technologies most likely to make long-term disruptive impacts on your business and your industry, you will be positioning your company to intercept those technologies’ exponential growth curves and rise with them. And as you win customers’ trust, you should leverage that into building communities and networks around your offerings, so your super fans protect your evolving business model like a moat around a castle.
Zoom Out to Envision Your Industry Ten Years Ahead
Our friend John Hagel, the retired co-chairman of Deloitte’s Center for the Edge, has long advocated a powerful approach to business model reinvention that he calls zooming out and zooming in. John recommends that you zoom out first by asking two key questions: What will our industry look like in ten years’ time? And what kind of company do we need to become to succeed in that future?
Zoom-out exercises of this kind invite leaders to make leaps of imagination in which growth is nonsequential, orthogonal, and exponential—very different from traditional three-year growth planning projections expressed in terms that are sequential, linear, and geometric.
The simplest way to see the difference is to picture the short-term and long-term paths of most business careers. Changes happen to most people from year to year in fairly orderly sequences, but the shape of change over the decades is almost always unexpected and nonlinear. Keith had been chief marketing officer at Starwood Hotels and then took a position at Mike Milken’s right hand as one of his holding company CEOs. Then Keith started a firm that offered growth coaching to sales and marketing teams while he was searching for his next role. But when a sudden opportunity emerged to write a book—which became a New York Times bestseller—his team-coaching business took off exponentially. At any point along the way, if a time traveler had been able to tell him what he’d be doing in ten years from that moment, he would have said, “Most definitely not!”
That’s the magic, and the burden, that we’re presented by the opportunities and uncertainties of the future. It’s precisely how the zoom-out process encourages executives to think about their businesses. Using the foresight tools of detection, assessment, and scenario planning, zooming out ten years allows your team to make meaning of the signals on your risk radar. Try using the collaborative problem-solving (CPS) process described in chapter 2 by putting the two critical zoom-out questions on the table: What does the ten-year future of our industry look like? And what is our desired position in that future? If you’ve already developed some scenarios for five years out, use CPS to debate how they might play out for another five years. The answers you come up with might include the need for previously unexpected capabilities, markets, products, resources, and behaviors.
This kind of zoom-out exercise can be done at your team’s annual strategic planning meeting. But it is most decidedly not a solitary exercise or limited to just your team, and you should involve anyone who can help you encapsulate that vision. You may find it useful to consult with specialists in certain technical areas to help your team think through various scenarios involving your industry’s long-term trajectory. Consider the vital role of inclusion and teaming out, so that everyone in your company’s expanded vision of a team is involved and committed to the agreed-on next steps. Ultimately, the goal of this zoom-out exercise is to develop a shared long-term team vision and a road map for making decisions along the way.
Identify Technologies Poised for Exponential Growth
Zooming out forces you to speculate about the next ten years of technological progress and how those technologies might remake your industry several times over in that time span. Next, you want to explore those emerging technologies and envision the opportunities to grow along with them. Technological growth by its nature follows an exponential growth curve, and your company can enjoy a similar pace of growth if you are able to engage with the right technologies early on.
Domino’s Pizza emerged as one of the business world’s unlikely winners during the 2020 pandemic year, largely because of its advanced commitment to technology. As the largest pizza company in the world as measured by sales, Domino’s had spent several years prior to the pandemic building up its digital transformation efforts and developing unique capabilities in touchless transactions and omnichannel e-commerce functionality—all of which proved incredibly useful during the pandemic. In a year when thousands of eat-in restaurants permanently closed, takeout providers managed to survive. Domino’s, however, outstripped all its competitors in the takeout pizza sector, with a 16 percent increase in demand over the previous year and a 30 percent increase in net profit.5 How was it able to do so?
One key reason for Domino’s success was its constant pursuit of innovation in its delivery channel. Unlike its pizza competitors who use third-party delivery companies like DoorDash and Grubhub, Domino’s made a strategic decision to only use its own delivery fleet so that it could capture that most precious resource of every forward-thinking business: customer data. “We’ve got a tremendous customer base and data set,” said Domino’s CEO Ritch Allison of his eighty-five million customers. I just cannot imagine why we would want to give that to a competitor.” About DoorDash, Grubhub, and the others, he added “Let’s be clear, these aggregators are ultimately competitors of the restaurant companies they serve.”6
DoorDash and the other third-party food delivery companies make it easier for competing pizza chains to reach more customers and scale up during surges in demand. But the average 30 percent commission they take off the total sale eats into pizza chains’ profit margins. To maintain its own delivery fleet, Domino’s, on the other hand, must constantly recruit drivers, which is especially difficult in tight job markets. That problem, however, led Domino’s to seek a technology solution: making deliveries through autonomous robotic vehicles. Starting in 2016, the company ran four pilot experiments to test different delivery robot systems and to learn how to overcome operational hurdles and deliver customer satisfaction. Until the pandemic put a temporary halt to the project, Domino’s was prepared to unveil a robotic delivery partnership with Nuro, a robotics company based in Houston.7 Robotic delivery remains a key part of Domino’s zoom-out future, nonetheless. By 2024, the autonomous robotic delivery market is expected to be worth $34 billion—almost three times what it was in 2018.8 Domino’s strategic decision to jump on the rapidly accelerating growth of autonomous robotic delivery will help the company take a slice out of the huge future market for autonomous fast-food delivery.
One lesson of Domino’s experience is that while competitors give away their data to third-party delivery services, Domino’s has used its captured customer data and its proprietary delivery system to intercept the exponential growth curve of advancing technologies. Investors have rewarded the vision, and by the end of 2020, Domino’s stock price had doubled from three years earlier, helping provide the capital the company will need to advance faster and farther toward its zoom-out vision.
The value of adopting exponential technology as a business transformation tool applies to all industries. Consider the case of American energy company NOV, which manufactures heavy equipment for the oil, gas, and renewable energy industries. Its equipment is required to work in complex, rugged, and extreme environments like deep under water, the North Pole region, and distant deserts. But most of these places make access to equipment data difficult, if not impossible. Providing cloud connectivity is an option in some places but is still limited.
To complicate matters further, energy operations often involve numerous service providers, with equipment from multiple manufacturers that create unique data streams that don’t readily interface with other systems. For example, a single oil well site can have roughly three hundred different data sources contributing to the drilling production, and all have different communication protocols and control systems.
So over the last few years, NOV started building smart functionality into all its equipment so that it can analyze and compute data remotely on-site, where all the activity happens in the field. Long-term, NOV imagines a zoom-out future where automation and self-driving are the norm in the energy sector. But to get there, the industry needs to harness the potential of exponential technologies like industrial Internet of Things (IoT) so machines can communicate seamlessly with each other remotely.
At Fortune 500 powerhouse NOV, these efforts have resulted in a technical solution called Max Edge, which connects local control systems and machinery and enables NOV to collect high-speed data, analyze and interact with it in real time, and provide on-the-ground advisory to control systems, even if there’s limited internet access. This capability greatly simplifies machine communications and automation across the ecosystem. During the early days of the pandemic, it also came in handy when onsite staff availability was limited. NOV could rely on Max Edge technology to monitor field operations remotely, since the company’s equipment was essential to keep the world economy flowing.
As the pandemic continued, David Reid, NOV’s chief marketing officer and chief technology officer, sensed an opportunity to leverage Max Edge and create a potential new revenue stream outside NOV’s traditional manufacturing business model: one that involved data, software delivery, and connectivity through a “platform as a service.”
“In this new world,” David said, “we’re not just offering a physical product, which is our core, but we’re also able to offer a new digital service based on Max Edge capability.” The pandemic propelled NOV to leverage its existing IoT technology, create new software services for its hardware clients, and accelerate the industry’s move toward automation. “With this new data delivery platform, we’re increasingly becoming both a software and hardware company.”
Beyond large Fortune 1000 enterprises like Domino’s Pizza and NOV, consider how smaller organizations in different industries have also incorporated new technologies to evolve their businesses. Founded in 1985 by Ivan Misner, BNI is a business referral network for executives, entrepreneurs, and small-business owners. The network has more than ten thousand chapters and more than 280,000 members worldwide. Every week, BNI chapters meet to conduct a standardized networking program focused on targeted referrals. Members stand up and have thirty to sixty seconds to introduce themselves and their work. After self-introductions, members stand up again and individually offer specific referrals in their personal networks that might be potential clients for other chapter members.
These aren’t just casual referrals. BNI members develop deep social capital with each other and believe that both parties benefit when they refer their personal social networks to other BNI members. They call this core value givers gain. And indeed, in 2020 BNI passed 11.5 million referrals to their members, generating more than $16 billion worth of business for members. That’s more than twice the GDP of the country of Lichtenstein!
In 2018, Ivan suggested to the company’s board of directors that the future of face-to-face networking is online and that unless BNI experimented with and adopted new technologies like mixed reality, holographic presence, and video communication channels, BNI would be negatively disrupted in its next decade. He was prescient and foresaw the rise of remote work, even before the pandemic. By March 2020, all ten thousand BNI chapters had pivoted to online networking—a dramatic business shift for an organization with a three-decade history dedicated to in-person business networking. Fast-forward to mid-2021, and BNI added five hundred new chapters during the pandemic year, all of which have only ever met online! Such growth thus confirms Ivan’s belief that every organization needs to adopt new technologies, or be disrupted.
How should you think about which technologies to include in your zoom-out vision? Keith and Kian’s friend Peter Diamandis—founder and chairman of the XPRIZE Foundation—has studied countless industries where he has recognized a clear-cut pattern in the growth of digital technologies and their interaction with business, which Peter calls the six Ds. As domains adopt digital technology and informational properties, they digitize into bits and bytes and jump on the curve of exponential change as described by Moore’s law, which observes how computational price and performance ratios double exponentially every eighteen to twenty-four months. The problem is that the early doublings are deceptive and easy to miss because they are so small (e.g., 1, 2, 4, 8, 16, 32 …), but it takes only a few exponential steps for the technology to pop and disrupt markets for everyone who wasn’t cognizant of the technology early on. Most businesses make the mistake of failing to see the early benefits of new technology and then get overwhelmed by its sudden exponential growth.
One of the primary effects of exponential technology on business is that it digitizes the functions of material objects so the objects are no longer needed. The functions become dematerialized. The smartphone, for example, has digitized the functions of a number of material objects—typewriters, cameras, music players, video recorders, and books, newspapers, and magazines. This dematerialization leads to a drop in prices as every new unit’s marginal cost approaches zero and the product in turn becomes demonetized.
At first, demonetization is disruptive to industries when it leads to lower total revenues. But if you can identify which two or three exponential technologies are potentially the most disruptive for your industry, you can benefit because demonetarization ultimately leads to a much larger mass market when the domain explodes. At that point, the technology is democratized and you can scale globally.
Which technologies should you pay attention to? Surely, you have heard of some of these transformative technologies. Our goal here isn’t to provide a comprehensive analysis of all the technologies to look out for but rather to highlight a few domains that are growing exponentially and that will be massively disruptive to all businesses over the next decade. Your fiduciary responsibility, and your opportunity, as a leader is to identify which two or three exponential technologies are potentially the most disruptive for your industry and intercept these exponential change curves to ultimately benefit from this technological disruption and to future-proof your business model for the decade ahead.
AI as a service
Peter Diamandis likes to say that there will be two types of companies in ten years’ time: “AI-led companies, and dead companies.” We want to make sure you fall into the former camp, not the latter. Every company must, at the very minimum, develop a strong AI competency in addition to any other exponential technologies relevant for its industry. Peter, for example, is disrupting his own business of providing exponential technology education by building an AI that can help him search the web for evidence of abundance and longevity. He has built a machine learning algorithm called Futureloop, which scours thousands of online news sources daily, identifies the most relevant highlights of abundance, and then packages it as a daily email for his clients. Now, you don’t need to build your own AI capability like Peter has done; you can “borrow” or “rent” this capability using software-as-a-service AI platforms.
Well before 2030, we will see the emergence of powerful cloud tools known as AI as a service (AIaaS)—which will allow every business leader to incorporate AI into different functional domains. AIaaS will collaborate with employees in everyday business operations, including helping with rote tasks, more creative idea generation, accounting and finance, customer service, business intelligence, and HR. These AIaaS tools will allow companies of all sizes to rent the world’s most powerful computing tools and apply them to existing data. For example, the new Amazon Personalize machine learning platform enables clients to engage the power of Amazon’s machine learning capabilities to create individualized recommendations for their consumers, using that company’s proprietary data.
AIaaS will be propelled by the increasing ubiquity of cloud computing and—software as a service (SaaS). Cisco estimates that 70 percent of all enterprise workflow in 2021 is happening in the cloud, using SaaS enterprise platforms. AI has already begun to integrate into many of these SaaS platforms, from recommendation engines on GitHub to real-time grammar recommendations using Grammarly. In fact, what we call AIaaS now seems destined to become just a part of standard operating procedure. Mark Weiser, the onetime chief technology officer of Xerox PARC, has often been quoted as saying, “The most profound technologies are those that disappear. They weave themselves into the fabric of everyday things until they become indistinguishable.” That’s the future of AIaaS.
Quantum computing
The next era of computing will be propelled by quantum computing, which will radically change the nature of a wide range of industries, including finance, materials science, logistics, supply chain, biotechnology, and computer network security itself. Right now, some problems we face are too complex to solve or predict because they have seemingly infinite variables. But quantum computers can simultaneously process a vastly larger range of values than even the most powerful of today’s supercomputers. That means quantum computers will be capable of quickly solving many problems that are currently too complex because of their vast numbers of variables. Quantum computing can optimize systems like supply chains and logistics and create breakthroughs in materials design, chemistry, and pharmaceuticals. Quantum computing would likely have arrived at the formula for a coronavirus vaccine even faster than it was developed.
How do quantum computers work? In classical computing, everything is digitized into either a 0 or a 1 in software bits. You’re either one, or the other. But in quantum computing, quantum bits (known as qubits) can exist simultaneously as both 0s and 1s, in a phenomenon known as quantum superposition. The practical implication is that qubits can consider multiple simultaneous outcomes in a single calculation. So 1 qubit can consider 2 outcomes, or 2 calculations, 2 qubits can do 4 calculations, 3 qubits can do 8, and 4 qubits can do 16. You can, hopefully, see the exponential pattern here. By the time you have 30 qubits on a computer chip, your quantum computer can do 1 billion calculations! By 300 qubits, quantum computers will be able to do more calculations than there are atoms in the universe.
Today’s quantum computers have limited practical applications because they are huge and require precise lab environments to function. In the next five years, however, quantum computing will be available as a cloud service provided by all the competing tech giants—Google, Amazon, Microsoft, IBM, and others.
Avatar systems
Since 2016, we’ve seen the emergence of new user interfaces like augmented reality and virtual reality open new pathways for humans to experience education, entertainment, and empathy, via remote connectivity. These user interfaces change the linear narrative of how we do things: we no longer have to go somewhere—as we humans have evolved to do—to experience things. And the pandemic poured fuel on the need to experience things remotely.
In 2018, the XPRIZE Foundation launched a $10 million competition to develop a physical, nonautonomous avatar system with which an operator can see, hear, and interact within a remote environment in a manner that feels as if they are truly there. By 2030, these avatars could provide the experience of your presence regardless of your location, allowing you to “jack-in” to an avatar located anywhere on earth. Health-care professionals could provide medical care in disaster zones and other remote locations, skilled technicians could respond more quickly to the need for expertise, and research and exploration work could take place where humans can’t go. Visiting via avatar could replace some forms of travel and tourism. Instead of videoconferencing via Zoom as we did to get through the pandemic, we’ll instead “rem-in” (remote-in) virtually. By 2030, our limitations of time and space will radically shift, and countless business opportunities will open up as these and other user interfaces make possible a whole new realm of remote interactions.
Blockchain
Digital assets like Bitcoin and other cryptocurrencies are growing in appeal because they are based on blockchain technology, a distributed database of encrypted information that is stored in duplicate on hundreds of thousands of computers worldwide. Blockchain databases can store all kinds of information, like digital identities and provenance, and even provide the ability to own and trade digital assets (like digital art) through peer-to-peer channels via non-fungible tokens. Because the users of the network collectively control it, blockchain technology offers a new pathway to verify trust. If your business relies on trust and verification in any way, blockchain technologies can help you build a radically different business model in the future. Analysis by PwC in 2020 suggested that blockchain technology could boost the global gross domestic product by $1.76 trillion in the following decade, with the greatest impact being on tracking supply-chain products and services, followed by payments and financial services, and identity management to help curb fraud and identity theft. In fact, blockchain technology will introduce a new era on the internet, what some call Web 3.0, where all transactions are made directly on a peer-to-peer basis, posing a direct disruptive threat to all the businesses we currently rely on as intermediary brokers of trust.
The spatial web
The pandemic supercharged the desire to connect in virtual environments beyond videoconferencing, and now entrepreneurs are building the next era of the spatial web, where individuals will interact with each other not through screens but within three-dimensional spaces combining both real and virtual locations. What the World Wide Web did for connecting websites, the spatial web will do for connecting people, physical spaces, and digital assets. To get to that next level of seamless integration within our lives, we will need to see widespread 5G connectivity and mass adoption of smart glasses and other augmented-reality devices, both of which we expect to occur by the mid-2020s. But the practical manifestation of the spatial web is already here through the convergence of blockchain-based digital objects, phone-based augmented reality, web-enabled virtual reality, head-mounted displays, spatial sound and audio, and unique gamification techniques.
The spatial web will bring new opportunities for collaboration and new service models for many businesses. Eric Pulier, founder and CEO of the similarly named company Spatial Web, said, “Spatial web ventures are already making inroads into how we meet, shop, engage with marketing experiences, and interact with one another. And it’s just the beginning.” For example, if your customers can’t attend a physical venue or retail location, you could mail them a virtual-reality or an augmented-reality headset so the person could “visit” the showroom without leaving home. Through these headsets, your client can hear spatial audio and see physical products remotely. Instead of attending conferences in person, companies can hold events in the spatial web, where attendees can interact virtually through digital avatars and with many more attendees possible than a typical physical event.
In short, when AIaaS converges with 5G, billions of connected devices, blockchain technologies, and new user interfaces like augmented reality and robotic avatars, we will see an exponential growth in dematerialized companies over the next decade. These firms will be unencumbered by physical space or hardware infrastructure and will be able to scale worldwide with remotely hosted operations and teams. As you consider which exponential technologies to integrate with your zoom-out vision, remember that some of these technologies will have different timelines for commercialization and maturation. For all of these technologies, there will be no specific moment in the future when it will be suddenly “ready” and will take over the way we live and work. The pieces that collectively make up the spatial web, for instance, are each on their own exponential growth curves, in which each is becoming increasingly more useful and powerful. The key here is that you need to experiment with these exponential technologies now; otherwise, you’ll miss intercepting these growth curves and will be behind your competition when these technologies suddenly pop and become mainstream in the future.
Zoom In through Rapid Agile Experimentation
To zoom in on the future and leverage one or two technologies that give you the greatest chance of catching a wave of exponential growth, John Hagel suggests identifying two high-impact experimental projects that can be completed within the next six to twelve months and would move your company in the direction of your zoom-out vision. This short-term goal requires an agile approach in proof of concept, experimentation, iteration, and deployment, and it’s just short enough to not get bogged down in two- or three-year plans.
At Ferrazzi Greenlight, where our zoom-out vision foresees team coaching fully powered by AI, we launched a short-term zoom-in project that incorporates currently available algorithmic assessments into one of our existing team diagnostic tools. Implementing this modest, imperfect project is teaching us a lot about what it will take to achieve our zoom-out vision. At drone startup Birdstop, where the zoom-out vision is to generate on-demand aerial imaging through a cloud-based network of autonomous drones, the interim zoom-in project looks like this: colocate drone stations in high-demand zones to test whether corporate clients would be open to sharing the drone network rather than having a network solely for their own infrastructure observation. If the zoom-in experiment is successful, then over time, these local colocated networks could be connected to a larger mesh to provide continuous on-demand cloud observations.
One benefit of zooming in is that it allows your team to make small, strategic, high-impact annual bets about the future without committing to long-term, multiyear projects. If the exercise proves fruitful at the end of a quarterly or six-month sprint, resources could be added to accelerate the project’s impact. If the experiment doesn’t result in hopeful ways or no longer aligns with your annual zoom-out vision, you can pivot to new zoom-in projects. Along the way, you will constantly learn what works after every zoom-in project, and this will help cultivate a learning mindset within your leadership culture.
Over time, these zoom-in experiments, no matter how small, can snowball and develop into more ambitious projects that can transform the company on a trajectory toward your ten-year zoom-out vision. When designing your zoom-in experiment, pay special attention to who you task to join the project. You will want a mix of both domain experts and passionate team members from your existing team; these two groups can collaborate to solve problems creatively and push through obstacles. Your zoom-in team should report directly to you as the leader, and not in a matrix, so that it has the maximum permission possible to try new things and break existing dependencies on established internal processes like IT, marketing, and HR. You want this zoom-in team to have as much flexibility as possible to achieve its goal.
Consider how Ognomy, a mobile app for sleep apnea diagnosis, was developed as a zoom-in project by Dr. Dan Rifkin, a neurologist in Buffalo, New York. Sleep apnea is a potentially lethal sleep-related breathing disorder that impacts a billion people worldwide and goes mostly undiagnosed. By some estimates, 80 percent of people with apnea in the United States never get a diagnosis because of the expense and inconvenience of having to spend nights being monitored at specialized sleep clinics.9
Ognomy’s trajectory exploded during the pandemic, when medical sleep clinics were forced to shut down. Patients were desperate for treatment, and a virtual diagnostics platform became more critical than ever before. The app allows patients to meet with doctors virtually and get tested, diagnosed, and treated from the comfort of their homes. Ognomy now serves doctors in sleep specialties as a transformative “practice in a box.”
Dan Rifkin came to believe in the late 2010s that telemedicine and other digital tools could make diagnosis and treatment for sleep apnea more accessible and affordable. When he zoomed out ten years, he foresaw a platform that democratized access to sleep apnea diagnoses, so that millions who suffer from the condition could get tested and treated even if they didn’t live near a physical sleep lab.
Over the years, Dan experimented with several videoconferencing platforms and different electronic medical record solutions to build his zoom-out vision. He found them all lacking and became convinced that to transform the treatment of sleep apnea, he had to create a stand-alone software solution that digitized every step of diagnosis, and treatment in the workflow of his practice. In June 2019, he led a two-day design workshop at Buffalo Niagara Medical Campus, where a team of twelve drew up a digital version of an at-home sleep apnea testing and treatment experience, with the goal of building an app within six months. Over the two days, Dan’s team took apart each step of his medical workflow: initial examination, ordering sleep studies, diagnosing results, and managing patient records. The team also captured the user experience for patients, clinicians, and health-care administrators in a storyboard that could inform the app design. Finally, they developed a virtual assistant chatbot to guide patients through the new app.
When the pandemic hit in March 2020, Dan had just hired the software development firm TopCoder to build the Ognomy app, with a target date of June 2020 for a minimum viable product (MVP). Suddenly, Dan was forced to close all seven of his sleep apnea labs, and so he pushed the TopCoder software team to deliver the Ognomy MVP within thirty days. To meet this ambitious deadline, thousands of developers from all over the world crowdsourced the software development and together created a user-friendly app that was ready to be tested and deployed by late April 2020.
“I realized very quickly,” Dan said, “that we didn’t need physical space anymore to practice sleep apnea diagnosis. Starting a digital practice definitely cannibalized my own practice in the short term, but Ognomy convinced me that I can do the work entirely digitally. Once I saw the power of the app, I began to pivot and digitize my entire practice.” In early 2020, he thought it would take three to four years for both patients and doctors to get comfortable with telemedicine treatment of apnea. “Covid,” he said, “supercharged that adoption overnight.”
Fast-forward to 2021, and more than two thousand patients are registered on Ognomy, with new doctors joining the platform through a monthly subscription fee and pay-per-patient usage model. Dan believes that apps like Ognomy will change the face of access for sleep patients and the way sleep apnea is diagnosed and treated, just as he had predicted with his zoom-out vision a few years ago. Going forward, sleep labs will only be used for more complicated sleep studies, like narcolepsy or other sleep disorders.
“Five years from now, I will definitely still see some patients in the clinic, in order to maintain direct patient contact,” he said. “But I believe a large part of my practice will transition to being the CEO of Ognomy.”
Dan did a number of things right, which is how his one-year zoom-in experiment ended up transforming his business and may well transform his entire medical field. First and foremost, he designed his MVP so that it could scale rapidly. His efforts at digitizing his business show that in order to reach a billion people with your product or service, you have to radically rethink your delivery model. In the past, patients had to live near an urban area or a sleep center to get great care. That’s no longer the case, because of Ognomy. “We’ve democratized access to sleep apnea diagnosis and treatment worldwide,” Dan said, “and our market is the world, not just Buffalo, New York.”
Second, he worked with a diverse team to get the best results. In his initial design workshop, his team of twelve had a wide variety of skill sets that complemented each other well and would reflect the great diversity of patients and caregivers who would eventually be using the app. This last point is important for people doing zoom-in projects in large organizations. It’s critical that the team be staffed for passion first, and then skills. Zoom-in projects can often hit roadblocks, so you want a team that is passionate about solving problems creatively and that won’t give up just because it encounters problems.
In this agile journey, you may feel like some of your zoom-in efforts are disappointing or that the technology is not as mature as you had hoped. But don’t be fooled. You need to remember how exponential technologies grow slowly before they explode. The key here is to continue experimenting with agile zoom-in projects to get closer to your zoom-out vision. Some experiments will prove more fruitful than others, but your organization will benefit nevertheless through a culture of learning and experimentation.
Create Communities of Raving Customers
Given how exponential technology has the power to transform industries overnight, we believe it’s also critical to go beyond mere product, service, and technology innovation—all of which can be replicated or disrupted—and foster communities to complement the technology, to help you withstand copycatting, and to make your business more resilient in times of uncertainty.
The innovation strategist Larry Keeley, in his seminal work Ten Types of Innovation, outlined how the most successful companies—as measured by stock price on the S&P 500—integrated multiple innovation types into their business, from product innovation, channel innovation, service innovation, to process innovation.10 As we enter a new era where new technologies like AI and blockchain will democratize and decentralize access to many products and services, we believe it’s critical to innovate your network channel, foster your community, and build it into a defensible moat. A moat can help strengthen your resiliency to pivot and navigate in rough seas. And it can differentiate you when networks and platforms decentralize.
When college campuses closed down because of the pandemic in the spring of 2020, the crisis delivered a harsh body blow to an upstart national nonprofit called Swipe Out Hunger. Led by founder and CEO Rachel Sumekh, Swipe Out Hunger is dedicated to eradicating food insecurity on college campuses, where one in three students faces hunger. With programs located on more than 140 college campuses, one of the nonprofit’s programs is called the Swipe Drive, which enables students to donate their extra cafeteria meal-plan dollars to their peers facing food insecurity on campus.
Swipe Out Hunger had been growing fast when the pandemic shut down a major distribution channel and program model. Student food insecurity still existed, so Rachel and her team made a pivot to meet the moment. They leaned into Swipe Out Hunger’s community of activists to innovate a new business model tailored to the pandemic. With board approval, they launched a new program called the Student Navigator Network, which hired college students from Swipe Out Hunger’s network across the country and trained them to support their peers in finding food resources in their communities. Over two months, these ambassadors helped more than seven thousand college students gain access to $900,000 worth of food and other financial benefits so that these students could continue their studies throughout the pandemic.
“We went from a campus-based program to leaning into our community and asking them to help us develop a nationwide program where geography didn’t matter,” said Rachel. To get there, she hosted weekly virtual webinars, convening students, grassroots staff, and food policy experts so they could jointly ideate, test, iterate, and roll out the new model. Rachel said, “Administrators—which serve as our program’s gatekeepers on campus—always think they know best, but in this case, we needed to bypass them as intermediaries and communicate directly with students on the ground to connect them to each other and leverage best practices from one campus to another.” The pivot was so successful that Swipe Out Hunger expanded to twenty new college campuses during the pandemic. And it received a large grant to build a citywide hunger eradication program for college students in New York City. In addition, Swipe Out Hunger helped to pass legislation in numerous states to address food insecurity for college students.
“As the pandemic recedes and college campuses open up again, we’ll have some space to consider what strategic choices we make,” said Rachel. “We’re now no longer just a one rocket ship; we’re like a gardener with multiple flower beds, which can grow to feed a much larger community. We wouldn’t have been able to pivot without leveraging our existing network of passionate student advocates, who helped us ideate and iterate our future.”
The clear lesson from Swipe Out Hunger is to lean into your community in uncertain times. Crises are often community-building opportunities that can leave your organization stronger if you pay them proper attention.
Colin Sprake, an entrepreneur who owns a consulting firm called Make Your Mark, had a similar experience with his community. He helps couple-owned small businesses live more consciously and has more than 110,000 business owners in his community in Canada. In the early days of the lockdown, he started hosting a daily free one-hour call-in podcast for ten weeks. There, he would invite some of the most compelling thought leaders in business to join the calls and teach his community, for free, all in service to help his community manage through the daily challenges of the pandemic. The calls were so popular that at one point, more than three thousand community members would join Colin’s daily calls. When the pandemic forced Colin to shut down his own live events-training business, Colin went to his community and asked for help on how to pivot, and literally thousands of his community members responded with advice, because they wanted to give back to Colin and help him through his business challenges. By the end of 2020, Colin’s business had the best year ever, and his community membership grew by 100 percent from before the pandemic. “In the twenty-first century,” he said, “if you’re not building a community as part of your business, you’re doing it wrong.”
The ability of small organizations like these to thrive under such adverse conditions points to the increasing phenomenon of digital democratization and the transfer of power and decision-making from a central gatekeeper authority—governments, traditional media, financial markets, and so forth—to peer-to-peer networks of tech-enabled individuals.
In an increasingly decentralized world where technology democratizes access to anything and everything, power lies within communities of individuals who can radically disrupt the status quo. In this decade, what will differentiate you from your competitors will be how you foster, nurture, and harness your community and build a defensible moat against the competition.
In late January 2021, a crowd of retail investors on the microblogging service Reddit helped drive the price of a few stocks to astronomical heights and had financial markets reeling. It started when individual investors on Wall Street Bets, a Reddit subgroup, began buying the stock of a few companies that some financial analysts and hedge funds had bet against, including video game retailer GameStop. In a seven-day span, GameStop’s price increased 600 percent, while institutional investors caught in a short squeeze against GameStop ultimately lost $70 billion in value. This episode led to several brokerage firms, including most famously Robinhood, to cease the trading of a few viral stocks, including GameStop. This pause outraged many small retail investors, who accused brokerage firms like Robinhood of protecting entrenched financial institutions over retail investors. “Robinhood or Robbing the ‘Hood’?” tweeted one longtime fan of the company. What started as an internet chat room meme quickly escalated into a David versus Goliath story, all made possible by the cumulative power of individual actors (in this case, Reddit readers of the subreddit r/wallstreetbets) who rallied as a community to take down the Goliaths of the financial industry.
The GameStop short squeeze is unlikely to be a one-time blip in financial history. We’re now witnessing a grand experiment in the decentralization of finance (known colloquially as DeFi), where groups of empowered individuals will just bypass established gatekeeper financial institutions and transact directly using blockchain technologies and peer-to-peer networks. Now imagine how circumstances may have turned out differently if Robinhood had instead cultivated the community of small retail investors and asked for their help rather than try to stop their trading. The brokerage would have had an army of fans, not a riotous financial mob.
The forces of democratization were also behind the rise of Clubhouse, which distinguished itself in February 2021 as the fastest startup in history to reach the “unicorn” valuation of $1 billion.11 The founders of Clubhouse created a decentralized audio broadcasting social network allowing anyone from around the world to join conversation chat rooms and communicate to millions of people in real time using audio, without any barriers.
Clubhouse’s new social network disrupted existing social networks by shifting conversations away from one-to-many asynchronous broadcasts found elsewhere on social media to decentralized many-to-many synchronous conversations. By recognizing the desire of people to find community online in a much more authentic way than any other social media network to date, Clubhouse started taking audience away from other streaming services like Spotify and YouTube.
The same disruptive democratizing effects can be seen in traditional media, where superstar journalists are leaving traditional news outlets and launching self-published, paid membership newsletters. By doing so, they remove the intermediary institution—in this case, the editor and publisher—and create a community of consumers interested in their work. For example, the political commentator Andrew Sullivan left New York magazine to self-publish a weekly subscription newsletter on the platform Substack and has almost instantly increased his income manyfold by creating a community of fans willing to pay to be part of his ecosystem.
These examples show how empowered communities win in decentralized systems by radically altering how value is captured: where, when, and by whom. If you think your business is safe from the forces of decentralization, think again. It’s critical to foster a community of fans who can help your organization withstand the tides of uncertainty and propel you to new chapters, even as technology evolves and disrupts your competition.
James DeJulio, cofounder and CEO of crowd-driven advertising firm Tongal said, “Community is everything for your business. If you do it right, your community can market for you, they can innovate for you, and they can give you feedback. Why wouldn’t you want that extra layer of power and support?”
The lesson is clear from our research: a community of devoted fans, if their purpose and passion is leveraged for good, can come to your rescue when you’re most in need. So it’s time to ask yourself, Who are my company’s superfans? And who would come to our aid when seas are rough? Build a moat around your business model, and the power of the communities you attract can help your organization stay resilient in times of distress. In the final two chapters, we’ll show how reinventing your business model can help you redesign your workforce and lead with your foremost values in mind to separate your organization from all the rest, and win in this new world of work.
GUIDING QUESTIONS How to Compete in the New World of Work
Does our company actively envision what our industry will look like in a decade?
Radically adaptable companies actively engage the collective brain trust of their senior leaders, board members, advisers, and staff members to zoom out using foresight tools and imagine the industry landscape a decade out.
How does our company incorporate frontier technologies?
Do we take consistent, strategic, and potentially high-impact short-term zoom-in bets using new technologies to move the company toward our long-term zoom-out vision? These bets are structured as short-horizon, experimental projects that are free from traditional bureaucracy and often challenge the status quo thinking in the company.
How do we build community around every aspect of our company?
Decentralized systems are changing the dynamics of power within industries, so the most radically adaptable companies leverage communities of consumers and fans to build moats around existing business models to withstand future uncertainty and commodification.