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The five stages of business evolution

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Change is rarely linear, a smooth line of continual incremental improvement. It's more typical to see a punctuated equilibrium, where long periods of stability punctuated by rapid periods of change.

This slides are a work in progress where I'm trying to break the evolution of businesses (as opposed to the business landscape) into a number of distinct phases and describe what causes the shifts and what organisations focus on during the periods of stability.

Feel free to contact me if you have and thoughts / builds on the slides.

Published in: Business
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The five stages of business evolution

  1. 1. The five stages of business evolution
  2. 2. Your business is built around a set of assets Your business is built around a product portfolio Your business is configured to address a collection of customer segments Your business is designed to address needs of individual customers Mass production enables the creation of cheaper products Supply networks enable the creation of a richer product portfolio and improve customer choice The internet, smartphones, “Big Data” and “The Internet of Things” enable the creation of products targeted at individual segments in support of a customer lifestyle Low cost manufacturing and distribution – the start of the post-industrial age – enable the creation of bespoke solutions for individual customers 1 2 3 40 Preindustrial, craft-based Business is a fundamentally local affair, aside from the exchange of small, high value, durable goods
  3. 3. Driven by the development of new ideas Supply Chain Disruption The development of cheap and effective supply chains enabled the creation of a greater range of products and more options for customers Information Disruption (Also known as “digital disruption”.) Digital technology enables us to collect and analyse enough data to sense and address the needs to generic customer types (segments) Social Disruption The shift in the balance of power from firm to consumer, from large to small, moves industry of a push-based business-centric model, to a pull based consumer-centric model Production Disruption The development of manufacturing technologies (steam engines, looms, etc) and production systems (production line) shifts the focus from labour to capital
  4. 4. Your focus shifts at each stage Build infrastructure Provide products and services Fulfil needs Enhance life You invest in the assets to extend the range and efficiency of your operations You develop innovative new products and then bring them into the business to reduce costs and improve distribution You identify new segments and then transform the business to move it to the new segment You address unique customer contexts with a unique collection of services You develop your skills and a reputation for quality based on personal relationships Craft and quality

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