The best Change Agent is not a Change Agent
Co-authored with Nina Weingarten, Senior Consultant in our Munich office Reflecting on Change Few words have recently been used as ambiguously and non-specifically as…
Authors Miyuki Egawa and Jan Hartung
The scaling of digital business models is complex and uncertain, and a structured approach is required to successfully implement it. Excubate’s 4-week digital business model audit enables early identification of potential scaling barriers. In addition, the derivation and recommendation of tangible action items to address identified issues are in focus. The aim is to provide a fast and pragmatic solution, to ensure digital business models are future-proof and scalable. A successful business model audit also creates a blueprint for evaluating and scaling further digital products on the client side.
Excubate’s 4-week digital business model audit has three major outcomes:
The audit consists of three steps: Preparation, execution, and recommendation/future enablement:
4-week timeline of digital business model audit
There are a variety of requirements to keep in mind to ensure a successful digital business model audit:
Excubate uses a hypothesis-based approach (see graphic below). Starting point is the main hypothesis, which states the answer to the question: “What do we have to believe in, in order to scale a successful digital business model?”. It is then deconstructed into several subbranches, reflecting main areas of the value generation, like e.g., sufficient customer value and demand, a well-designed operating model, or an overall working software solution. Each subbranch is then expended by a set of sub-hypotheses, that can respectively be validated or falsified and that are each assessed. Each of the hypotheses’ assessments is furthermore marked with a Harvey ball, indicating the level of confidence (from low to high), based on the information base that supports the assessment.
For each sub-hypothesis, a deep dive on pager is then created, featuring four content blocks:
Within the audit, up to 25 interviews with relevant internal (e.g., product (HW and SW), legal, sales, marketing) and external (e.g., distributors, customers, product partners) stakeholders will be conducted and a large variety of materials will be screened. Besides interviews with internal key stakeholders, the feedback of well selected experts is crucial, to enable both, an inside in and outside in view. These experts should be selected specifically for the respective business model in scope and must bring deep expertise especially in areas of identified challenges.
Examples for experts involved in past Excubate audits are former software corporation top executives, IoT startup CEOs, senior sales managers from successful IoT companies, software integration experts (e.g., of Microsoft or SAP) or senior software developers & code experts. Suggested actions to address identified roadblocks are then based on the vast project experience of Excubate and on researched market best-practices. Here the focus lies on pragmatic and quickly implementable actions, that can heal roadblocks short-term and ensure a smooth scaling long-term.
In this case, the digital business model was an AI-based temperature sensor than enables production efficiency gains in high-temperature production environments. The main hypothesis is defined in a short and concise way. In our example, the main hypothesis states, that the client company offers a scalable, effective digital solution to generate significant value for their customers and for their company. For this to be true there are many other sub-hypotheses that must be validated.
Example 1:
First branch: “Customers buy and scale solution because it solves critical use cases along their value chain.”
To validate the overlying hypothesis of the first branch, it must be ensured that the solution creates enough customer value to create demand which would then be a sub-hypothesis of the first branch’s hypothesis.
Example 2:
Third branch: “The operating model is well integrated in our company core business, efficient and effective.”
For this hypothesis to be true, sufficiently many salespeople must be activated and enabled to sell the service solution.
Have we piqued your interest in our 4-week digital business model audit approach?
Contact us (jan.hartung@excubate.de), to evaluate the scalability potential of your digital business models your company.