12 COVER STORY COVER STORY 13A BIOGRAPHY Simon Torrance Senior Advisor, Business Model Transformation and Co-Author of FIGHTBACK - how to win in the digital economy with platforms, ventures and entrepreneurs, a new book being launched in Davos. The Digital Leader’s digital leaders survival guide tips are an edited extract from FightBack and based on the RENEW concept created by Torrance for his New Growth Playbook (www.newgrowthplaybook.com). Torrance advises boards and leadership teams on business model transformation, Survival Guide platform strategy and digital ventures. He is a member of the World Economic Forum’s Digital Platforms & Ecosystems executive working Five key steps to renew your business model group and co-founder and Chair of the Platform Economy Summit, an annual global conference that explores new business models. and compete effectively in future Reset how you think about sources of growth and value. Execute with entrepreneurs, within an ambidextrous organization «If ever there was an industry ripe for disruption... it’s every industry» «Tech entrepreneurs are your biggest untapped resource» 1. The way you think determines how you act, which determines what you get in terms of performance. This is where 1. It’s time to start co-creating with proven tech entrepreneurs – the best people to work with to execute new business leaders need to start. models. 2. Re-educate yourself and your teams on the types of business models that perform best in a digital economy. Without 2. Build an ‘ambidextrous organization’: a separate ‘Fast-Track the Future’ business unit, reporting to the CEO, with new this, you won’t make the breakthroughs that will unleash your growth potential. people, skills, metrics and incentives. Attract entrepreneurs to lead your digital ventures and incentivize them with equity. 3. At the same time, optimize every aspect of the current business, including decision-making, with software and data 3. Create a governance model to bridge the gap between the core business and the Fast-Track the Future unit. Ensure the intelligence. latter drives demand for your core business and use it to transfer learning. Envision new ecosystems and your role within them. Widen your appeal and wow your customers «If you don’t have a platform strategy, you don’t have a strategy» «Leverage others to serve your customers better» 1. McKinsey has forecast that 30% of global economic activity will be mediated by platforms within new ecosystems in five 1. The most customer-centric businesses on earth leverage others to serve their customers. You needn’t own all the assets. years’ time. What ecosystems will you be operating in and which could you orchestrate? Think of all those third-party developers and merchants supplying Apple’s App Store and Alibaba’s platforms. 2. You’ll need a very different approach to market analysis to understand the new opportunities and threats. 2. Reconceive yourself as orchestrating an ecosystem of innovation, not just as a supplier of products and services. 3. What types of platform strategy do you need to be successful in this different world? There are ten different types. Work 3. Incentivize others to work with and through you. The most important third parties to leverage are entrepreneurs and through them to find which would suit you best. developers – your key resource to create new growth and value. Nontraditional approaches to capital allocation «Put your money where the money is» 1. Capital allocation is the most effective way of translating strategy into action. Share buy-backs and ‘innovation theatre’ won’t move the needle. It’s time to be bold. 2. Invest in the business models that can make the difference; don’t just digitize existing out-of-date business models. 3. Create a portfolio of digital investments and platform-based ventures. Be sure they are strategically relevant, not armslength investments. Allocate 10% of your budget to them.