Reinventing business models: what can the public sector learn from digital disruption of business?

In my last blog I wrote about how government is challenged by technological change and globalisation. I now want to explore what governments might learn from the experience of the private sector.

Globalisation is connected to the rise of consumerism. But its attributes of brands, choices, service, access and responsiveness are no longer the preserve of the private sphere.  Increasingly, these attributes define the expectations of the public when they interact with government or use public services.

Unless public services can adapt to these new expectations, the ability to sustain a consensus for the provision of public services free at the point of use may prove impossible in the long term.

Business, of course, has been at the forefront of shaping this ‘new world’. But those forces equally challenge us.

How, for example, does business reform its governance in a way that inspires the trust and confidence of investors and is accountable to employees and the wider public?  How should businesses respond to the opportunities of the global market and new technology, both of which are producing a revolution in the way the business operates?

Let me give you just one example of how these global pressures are influencing business today.

Thirty years ago, businesses could almost entirely rely upon product cycles that lasted for three to five years and business models that could last a decade.  The great companies of the last century created products and refined their supply chains over decades. And they based their business models on relatively stable markets, high barriers to entry and a plentiful supply of relatively unskilled labour.

However many of the most successful companies today are those that have developed a capacity to reinvent themselves – not just once every ten years – but now every eighteen months or two years.

Businesses operate in a global competitive market.  They are challenged to create new value, improve productivity and respond to tomorrow’s customer needs – today.  That global competitive market ensures that today’s businesses simply cannot afford to wait five to ten years to develop a new product cycle or business model. For those companies and communities that are equal to the challenge, this relentless competitive pressure is creating new sources of wealth has increased standards of living.

Next week, I’ll be talking in more detail about innovation and why businesses might have an advantage over the public sector. In the meantime, if you enjoyed this post, I’d be very grateful if you’d help it spread by emailing it to a friend, or sharing it on Twitter or Facebook.  And if you are interested in public sector innovation you might be interested in another of my recent blogs where I wrote about how businesses learn from mistakes.

Published by

Philip Craig

I am the Government Sector Strategy Director at Sopra Steria. My background is in the public (central and local government) and private (consultancy) sectors. I have an interest in public policy, technology and public service reform.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s