Rewiring the FUTURE

PART 2: HOW TO REWIRE THE ENTERPRISE

12-15 MINUTE READ. PUBLISHED 5 SEPT 2023. UPDATED 8 JUL 2024.

CREATIVE COMMONS CC BY ELECTRO STRATEGY STUDIO. WRITTEN BY ADRIAN JARVIS.

TL;DR Radical thinking will be needed to solve the challenges of sustainable growth — providing the foundation for collaborative value-creation and better connected brands. Though ultimately, sustainable transformation will be accelerated by next-gen technologies, such as artificial intelligence and real-time data sharing.

CONNECTED BRANDS AND ROADMAPS FOR SUSTAINABLE GROWTH.

In Part 1, we discussed the concept of Networked Enterprises; looking at the potential of circular business models, collaboration, and innovation. Defining the ‘why’ and stages of network participation; from initial solutions such as renewable energy to new value-chains and the transformation needed for a Net Zero society.

I am hopeful for the future, because although nature is in crisis, now is the time for action, and together we can save it. David Attenborough, 2023

In Part 2, we look at ‘how’ to rewire the enterprise; exploring the features that will drive change and help brands to win in markets facing an uncertain future.

The four key credos for sustainable growth are:

  1. BUILD A NETWORK OF RADICAL THINKERS AND DOERS: enabling the development of operating models that drive both growth and action on sustainability.

  2. DESIGN BRANDS TO BE ECOSYSTEM CATALYSTS: encouraging engagement through ‘connected’ brands that play a stronger, valued role in the ecosystem.

  3. COLLABORATE TO CREATE NEW VALUE: creating a virtuous cycle of better products, and partners that work together to accelerate innovation.

  4. INFORM REAL ACTION FOR PEOPLE, PLANET, AND PROFIT: investing in technologies that improve connectivity and share the data needed for a collective action.

This is just the start, expect these themes to evolve with advancing technology and global dynamics.

FEATURES OF the NETWORKED ENTERPRISE.

To recap, we can define a Networked Enterprise as a commercial organisation that leverages networks and technology to achieve sustainable transformation — recognising that the solutions to our biggest challenges are distributed and interconnected.

The interconnected enterprise is a product of our age. The natural evolution of the enterprise in the face of globalisation, low friction digital communication and the high frequency change that emerges from the intersection of those two trends. Building Tomorrow's Interconnected Enterprise, Jan 2021

There are specific characteristics that differentiate ‘networked’ enterprises from traditional, closed models:

  • SHARED MISSION AND ACTIVE PURPOSE that defines a role in the ecosystem and motivates sustainable action; providing the strategic north star to design more connected and valued brands.

Once narrowly defined as increasing profits, today purpose has evolved to be thought of in far broader terms. Companies must still meet the goals of shareholders, but they must also satisfy those of customers, of employees, of their ecosystem of business partners, and of society itself as we grapple with long-term environmental and social challenges. Bain & Co. 2021

  • ROADMAPS FOR TRANSFORMATION that create real action while maintaining growth; adapting to market shifts and expectations of stakeholders across the ecosystem.

Engage across the company’s value chain, industry sector, and beyond to drive systemic change. This includes engaging with suppliers, customers, peers, policymakers, investors and civil society to co-create solutions and leverage the power of ecosystems. PwC, 2020

  • OPEN CULTURE AND CONSCIOUSNESS that rewards practices that have a positive impact; promoting transparency, and a culture where sustainable action is explicitly encouraged.

Creating a conscious business begins with the leaders, for the simple reason that leaders model the culture for the rest of the organization. There are two aspects to operating as a conscious leader: Being and Doing. Being is about how you show up. Doing is about the practices, structures, and procedures you put in place. SHIFT314, 2020

  • KNOWLEDGE SHARING AND COLLABORATION to address the challenges of systemic change; building capabilities through collective problem-solving, and data-driven cooperation.

The dynamics of knowledge processing, which involve the acquisition, assimilation, transformation, and exploitation of knowledge, play a pivotal role in the co-creation of value. These dynamics are influenced by the collaborative practices that firms use to manage knowledge sharing with their ecosystem partners. David Sjödin, 2018

  • NEXT-GEN TECHNOLOGIES that enable network participation and informed decision-making; investing in digital connectivity, data access, and smarter analytics.

Emerging technologies provide opportunities for sustainable differentiation and greater workforce productivity. AI offers immense potential to enhance digital customer experiences, make better business decisions and distinguish yourself among your competition. Gartner, 2023

‘HOW’ TO BECOME A NETWORKED ENTERPRISE.

1. BUILD A NETWORK OF RADICAL THINKERS AND DOERS.

Aligning corporate goals with the UN Sustainable Development Goals (SDGs) will provide the framework for working with a diverse network of partners. Refocusing the Enterprise on specific challenges, and opportunities for value creation.

If we don’t admit we need radical change and radically new ideas, we are being dishonest about the scale of change. Indy Johar, Dark Matter Labs

Engaging with a new generation of thought-leaders that can rethink how we address the challenges of our future; taking the lead, to innovate ideas that change the status quo — enabling enterprises to build more radical collaborations.

Radical change requires radical thinking, and donut economics provides the blueprint. It's not just about tweaking the edges; it's about overhauling the system. We need to challenge the status quo, question our deeply held beliefs, and be willing to venture into the unknown. Kate Raworth, Stockholm Impact Week 2023

In Part 1, there is a list of resources for communities of radical thinkers (opens in a new window).

2. DESIGN BRANDS TO BE ECOSYSTEM CATALYSTS.

The goal of brand design in the Networked Enterprise is to create 'connected' brands that encourage engagement and enable collaboration. There are a number of steps to designing brands that play a more active role in their ecosystem(s).

  • MAP THE ECOSYSTEM AND CORE NETWORKS to understand the needs and perspectives of each stakeholder — from C-Level and internal divisions to customers, suppliers, alliances, investors, regulatory, and issue-focused NGOs…

CASE STUDY: BAE Systems PLC, a global defense and aerospace enterprise, uses ecosystem mapping to clarify their stakeholder relationships, guide business and brand design, and ensure alignment with critical regional nuances. Key stakeholders include government defense departments, industial partners such as Rolls-Royce and Airbus, competitors like Lockheed Martin, and wide range of interests in sustainable aviation.

  • DEFINE AN ACTIVE PURPOSE at the heart of the brand, that is motivating and founded on shared value(s); addressing the needs of teams, partners and communities.

CASE STUDY: Schneider Electric is committed to promoting energy efficiency and sustainability through its brand purpose “Life Is On”. Creating digital platforms that connect customers and partners. Helping build a leadership position in data centres, smart cities, and Industry 4.0.

  • CREATE A BRAND ARCHITECTURE THAT ENABLES COLLABORATION and new value creation. Providing the strategy for how products and services connect within the ecosystem; from divisions and departments to sub-brands, products and services.

Winning brands must adopt architecture models that are more fluid, flexible, and adaptable. Emcompassing the ecosystem of value creation, with a foundation of data, technology and user-centric logic. Vivalidi Group, 2018

  • ENSURE MEMBERSHIP DESIGN DEFINES A VALUE-EXCHANGE and brand relationship; showing how each value proposition creates economic and social value.

CASE STUDY: Sephora, a highly-dynamic beauty retailer, has become known for its retail stores, ecommerce and beauty brands. Through partnerships and ‘membership programs’, Sephora has built a Networked Enterprise to take on Amazon. Efficient supply chains enable demand pricing and product availability, while startup accelerators demonstrate their commitment to networked innovation.

  • DESIGN A COHESIVE IDENTITY that balances consistency and flexibility; ensuring that the design language is adaptive to brand experiences across the ecosystem.

CASE STUDY: Bosch uses its brand identity as a unifying force across partners, customers, and communities. Allowing them to flexibly communicate different brand attributes. By balancing recognition and adaptability, Bosch successfully resonates across diverse sectors and stakeholders; from home & garden to mobility, industrial, energy, and the built environment. While always staying true to the brand DNA, born from Robert Bosch’s “Workshop for Precision Mechanics and Electrical Engineering”

3. COLLABORATE TO CREATE NEW VALUE.

The imperative is to create a virtuous cycle founded on network collaboration. Sustainable manufacturing and sourcing sends a ripple-effect throughout the value chain. It also opens up the potential of a ‘value ecosystems’, where partners work together with mutually beneficial goals for innovation and growth.

Sustainable value is multiplied as Networked Enterprises move from recognising that they part of a ecosystem towards actively cooperating in a coordinated manner, and collaborating under a shared mission. Ultimately, network participation becomes an advantage to drive systemic gains. Systems Innovation Network / Dark Matter Labs, 2023

Networks of partners can assist in the delivery of more circular products (e.g IKEA); building expertise in areas such as durability, recyclability, and resource efficiency.

Through engagement with suppliers, manufacturers, and stakeholders an era of novel product design emerges — heralding a renaissance in design principles, and underscoring that the effort to address environmental challenges must be collective. Fashion United, Designing For Sustainability, Aug 2022

The aim is to build a competitive advantage for brands that transition to sustainably sourced materials, and close-the-loop on waste though circular design (e.g. Nike).

We see traditional value chains being reshaped in some interesting ways, including how portfolios are restructured, the types of new alliances being struck, new entrants coming into the value chain, and new circular business models that are being created. Deloitte, 2022

4. INFORM REAL ACTION FOR PEOPLE, PLANET, AND PROFIT.

Technology continues to play a critical role in the Networked Enterprise; encouraging collaboration and collective action. There is an acceleration of real-time data sharing and use of artificial intelligence.

CASE STUDY: Sidewalk Labs, now part of Alphabet/Google, aims to lead urban innovation. Their smart city initiatives utilise data analytics, sensors, and connectivity solutions, revamping urban infrastructure and services. This approach looks to foster adaptable and thriving city ecosystems, while meeting the future demands of urban living.

Connectivity and interoperability help build networks-of-networks. Open standards and cloud-based systems enable the flow of information between partners.

By 2030, the world will be entering the 6G era; an intelligently autonomous, sensory, massively distributed but highly networked world that blends our physical, digital and human systems. Data will be created on an unimaginable scale, changing how we collaborate, convene, create and contextualize. EY, 2022

CHALLENGES of NETWORK PARTICIPATION.

While Networked Enterprises are geared towards sustainable growth, they also face unique challenges. These can be significant barriers to business transformation.

Transition requires new ways of doing business, with associated investment in technology and operational change. This means more effective, adaptive operational strategies; especially when sustainable growth requires going beyond traditional metrics.

We salute and support those of you who are pushing back, disrupting, and changing the world for a better place, standing up for your beliefs... because you know that the way to change the world is to be resolute and build new things. Alex Karp, CEO Palantir Technologies on Building Ecosystems

Challenges faced by Networked Enterprises typically fall into the following themes, each of which affect the development of enterprise-specific roadmaps:

  • FOCUS AND RISK: while networks offer significant opportunities for growth, membership may dilute strategic focus and put pressure on limited resources.

  • ALIGNMENT AND CONSENSUS: network participation can introduce complexities that require new approaches to strategic alignment and decision-making.

  • VALUE EVOLUTION: transitioning to a Networked Enterprise often requires new value propositions, which may impact established market advantage and revenue.

  • OPERATIONAL IMPERATIVE: tasking silos to address specific ESG issues makes it harder to achieve the cross-functional change required to become networked.

  • PROTECTION AND REPUTATION: even though most networks have mechanisms to protect IP and deal with bad actors, participation requires dedicated risk management.

  • GOVERNANCE AND COMPLIANCE: collaboration with partners across sectors can expose enterprises to governance issues and new regulatory requirements.

GET IN TOUCH TO DISCUSS HOW TO REWIRE YOUR ENTERPRISE…

This article was written by Adrian Jarvis, who founded Electro, an independent strategy studio based in London. He has 25 years experience of working with enterprises of all sizes. The concepts discussed here are highly scalable from start-ups to multinationals, across a range of categories.