Value Dynamic Enterprises

Sources of value are connected to the dynamic nature of the behavior cycle. Users are usually satisfied by the experiences products present them with, but in time this satisfaction is being eroded by the daily repetition of the experience. As surprise is one of the components of a compelling experience, products and services that do not offer surprising new features or benefits over the course of time, cease to be of value to users. Corporations need a dynamic strategy to deliver on new capabilities, because behavior completes desires in a perpetual cycle (see Figure 1.1, 'The behavior cycle'), and because humans perpetually want more. Value is a dynamic of variables, and it requires a dynamic response from the providers of value. With very few exceptions—notably the utilities sector-most sectors of the economy are affected by the dynamic nature of value, and the constancy of a user's behavior cycles. And very few enterprises respond well to this dynamic.

Traditionally, incumbent organizations are slow in their response to the changing behavior of consumers, leaving it for outsiders, organizations operating at the fringe of the market space to provide the innovation that responds to this dynamic. Incumbent ski manufacturers were not the ones that introduced snowboards, nor did incumbent bicycle makers introduce mountain bikes.

The situation changes slightly as one looks at consumer-packaged-goods companies, which prove to be much more sensitive to changing consumer

Business model canvas

Figure 6.2 Business model canvas

attitudes—health concerns, environmental stance, changing taste palate—and respond with innovations to match.

Looking at the business model canvas (Figure 6.2) developed by Alex Osterwalder, it is easy to see that the rubrics Cost Structure and Revenue Flows, are items that by the nature of supply and demand, will always be in flow. Flow here means that they are ambiguous; uncertain with respect to attaining the revenue desired against the expenditure budgeted for. This is why everyone uses strong disclaimers when presenting these numbers, as they are simply assumptions, best guesses and ideal projections. Somehow, this ambiguity seems to be accepted as the norm while at the same time, the idea that disruption is a constant and business is a dynamic variable makes managers seem highly uncomfortable. If we are OK with the ambiguity of the bottom line, its dynamic nature and its flow, why are we not comfortable seeing the whole business as a variable? How can the value proposition not be in dynamic flow with the behavior disruptions it is designed to satisfy? And if the value proposition is in flow, how can the value generating activities not be in flow? The quicker leaders accept the dynamic flow of continuous transformation, the quicker they can design their way into it.

 
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