“Is Nike the new technology giant?” This question by a young man on the sidelines of a recent conference set me thinking. Nike’s deep dive into digital technology was not new to me. I have been following it with interest over the past decade – from the insertion of microchip sensors into shoe-soles to the roller coaster ride of its FuelBand; from its 3D printing project to its latest experiment with augmented reality on the Nike+ app and more! What intrigued me, however, was the meticulous shifting of lanes by the shoe giant as it accelerated on its growth path to reimagine its business model.
Thriving through disruption, a recent survey-based report by the Economist Intelligence Unit, points out that most companies – sobered by how quickly new technology-driven business models can take root and leaders can be dethroned – are rising to the challenge by proactively investing in a disruption strategy, perhaps a throwback to “creative destruction” as coined by Joseph Schumpeter. Richard Foster’s book by the same name, applied Schumpeter’s theory to modern management and surmised that the life span of a company is determined by balancing three imperatives: running operations effectively, creating new businesses which meet customer needs, and shedding businesses that once might have been core but now no longer meet company standards for growth and return.
I have myself been talking about this multi-dimensional business model for a while now. I call it the Mode 1-2-3 strategy. In the age of digitalization, this alludes to a 3-lane superhighway. The lane we are driving on forms our current competencies; the second adjacent lane offers near growth opportunities; and the third is the lane to build long-term success. We have to voluntarily shift lanes on this highway before we are involuntarily eased off it. And keeping a close watch on all three lanes simultaneously is necessary to maintain a steady pace in the lane we’re driving on; shift into the next lane as soon as we get an opportunity to overtake; and finally work our way to the high-speed lane to accelerate in line with the changing industry dynamics and customer expectations.
This is true for all industries. I would not be surprised if it’s keeping most business leaders up at night! For certain, it is my number one focus. At HCL Technologies, as I said earlier, we’re navigating this superhighway with our own Mode 1-2-3 strategy.
Mode 1 is about our core services, which form the bulk of our current business. In this mode, we focus on our key differentiators to drive growth through competitive advantage and market expansion enabled by our industry-leading AI platform, DRYiCE. Mode 2 is about experience‐centric services, or business outcome-oriented services – digital & IOT services, enabled by cloud and cyber-security services and orchestrated through DRYiCE, which offer great near-term growth opportunities for us. And Mode 3 is about being ecosystem‐driven, by building a product and platform business through in-house development as well as creative partnerships with the best, wherein we pick stable products & platforms and make them relevant for the new world.
The world of static business models is long gone. Today’s 3-lane highway needs a new mindset. It demands a multi-dimensional focus, the ability to move quickly into new areas, and collaboration with partners to chart a path to the high-velocity lane.
So, coming back to the question: Is Nike the new technology giant? My answer to the young man was ‘yes’ but more importantly Nike is a great example of a truly 21st century business model. It has leveraged technology to maintain leadership in its core shoe business; moved quickly into adjacent services to deliver innovation at speed, and has built partnerships with specialists to truly embrace a digital ecosystem in all that it does.
This, my friend, is the compass for the future. Has your business built its 3-lane highway yet?