Develop Breakthrough Business Models Based on Superior IT Security

Where can leaders find the next breakthrough business models and strategies that will delivery superior corporate performance? I believe that such innovations will come from having closer relationships with, greater mutual understanding of, and more meaningful interactions with all stakeholders (including end users, beneficiaries, customers, colleagues, colleagues’ families , partners, owners, lenders, suppliers, distributors, neighbors, communities in which the enterprise operates, those affected by the company, regulators, critics, and commentators).

Before describing my reasons for drawing this conclusion and what its implications are, let me explain what I mean by a “business model” -- it’s the combined “who,” “what,” “when,” “where,” “why,” “how,” and “how much” of providing goods or services to customers and beneficiaries.

Here’s an example. Imagine a retail store that only sells women’s shoes through in-store personnel making suggestions, assisting with sizing, and finding stock to serve women who are interested in its styles, find the location convenient, and can comfortably wear the carried sizes in selected brands and styles. “Who” includes the customers and store personnel. The stocked shoes are “What” the store provides for customers. “When” occurs between the store’s opening and closing times. If orders aren’t taken by telephone or the Internet, the store’s location is “Where” it operates. “Why” explains why people purchase: due to the shoes offered and their value, as adjusted by the store’s accessibility. “How” describes the work done by the store’s personnel. Prices describe “How much” is charged for the shoes.

In today’s world, relatively few businesses have such simple business models. In tomorrow’s world, valuable business-model dimensions will be added in almost unimaginable ways.

One source of such changes has been business leaders more often deciding to seek and adopt improved business models in gain competitive advantages that cannot be quickly duplicated. Any successes, in turn, have attracted emulators as well as innovators who have built on the most effective models from other industries as well as their own.

A newer influence has been seeking to achieve breakthroughs through business-model innovations, ways to accomplish at least 20 times more with the same or less time, money, and effort. Such innovations often permit speedier market expansions, gaining market share at less expense, eliminating and reducing costs, avoiding many kinds of investments, increasing owner value, establishing new markets, profitably adding to social value, and successfully involving people who can initially neither afford the current offerings nor assist the enterprise.

While seeking so many new sources of business-model breakthroughs, it’s become clear that more effective sources of competitive advantage will primarily come in the future from combining several such innovations together for the first time in complementary ways. Just think of the breakthroughs that can follow!

By improving more than one aspect of what a company does by 20 times, such combined innovations offer the potential to increase overall performance by 400 (with two innovations), 8,000 (with three innovations), 160,000 (with four innovations), or more times with more then four complementary innovations. Now, those are true breakthroughs!

Such attractive combinations of innovations are much more easily obtained when there are freer flows of questions, information, and learning across the entire stakeholder community. Such approaches are quite a contrast with typical corporate communications, which often emphasize one part of the company interacting with just one stakeholder at a time in very narrowly-defined ways.

Let me describe an example of how more openness can make a strategic difference through increasing complementary innovations into a stunning breakthrough. Goldcorp, a Canadian mining company, wanted to increase its owners’ value. Correctly perceiving that finding much more gold that could be mined and processed at substantially lower costs would provide a big value boost, the company’s CEO sought a novel way to accomplish such prospecting.

After studying how open-source software had developed, Goldcorp CEO Rob McEwen hit on the idea of sponsoring a global contest for finding richer veins in its most profitable mine. Making such a contest effective in its purpose required a new corporate policy. Rather than keep all the company’s geological information secret, Mr. McEwen instead organized the existing information into easy-to-access digital form and supplied it freely to all contest entrants, of whom there were many.

Based on the contest entries, Goldcorp was to locate billions of dollars worth of highly-profitable gold to extract that had not been located during almost 50 years of prior exploration and extraction. The company was delighted by its results. Competitors quickly followed suit to locate more valuable deposits in their mines, as well. Such contests are now an industry standard practice.

Would all this gold have been found as soon without first shifting Goldcorp’s information boundaries? Probably not. From this example, we can see that keeping too many secrets and not communicating enough with current and potential stakeholders can be costly for companies and their owners. Such rewards can emerge for other companies, as well, by establishing new kinds of stakeholder relationships.

As I thought about these important developments in business competition, I was reminded of the groundbreaking work done by Carlos Trigoso, Ph.D., a Rushmore University graduate. In his speeches and articles, he sees the intersecting dimensions of information, identity logistics, and security management as essential access points for developing superior business models, strategies, and corporate performance.

Dr. Trigoso favors these four corporate perspectives for evaluating what should be enabled through the three intersecting dimensions to improve companies: Direction, Selection, Protection, and Verification. Let’s separately examine these four perspectives for enabling the leadership tasks of enhancing business models, strategies, and corporate performance.

Direction identifies what areas of performance an organization should most improve. While shifting attention to do so sounds simple, many companies are so stuck in their old mindsets that their leaders don’t realize they are emphasizing the wrong kinds of performance and activities. For Goldcorp, finding more low-cost gold in its best mine was the biggest point of potential competitive advantage. What’s yours?

Selection determines what information to share or allocate more broadly for gaining more rapid performance and value enhancements. In the Goldcorp example, CEO McEwen soon realized that he could not share too much easy-to-use geological information about the mine with too many experts. Each expert might contribute a valuable insight from emphasizing different aspects of what was known.

Protection determines who needs how much privacy and freedom from unwanted intrusions. For example, in the Goldcorp contest, entrants needed to know that their efforts wouldn’t be disclosed prematurely to the other entrants. The company also needed to be sure that its geological information wasn’t somehow corrupted in the process so that valuable insights were missed.

Verification determines the precise access the company wants to encourage for what it has selected to share in ways that properly protect stakeholder and company interests. Depending on the amount of risk and regulatory obligations involved, verification methods can be adjusted to provide just the right amount of protection compared to its costs in time, effort, and money.

Until recently, issues related to protection and verification have been mostly considered by a company’s IT staff in terms of widely-accepted technical standards for rebuffing unwanted intrusions, regardless of what were the corporate business model and strategies. As most IT people would agree, establishing new business models and strategies is usually “way above their pay grade.”

Yet many CEOs lack the knowledge and experience to appreciate what to do about the information, identity logistics, and security management dimensions of developing sufficiently advantaged business models and strategies to deliver outstanding corporate performance. How can you realize the business value of information?

For now, I believe that these critical issues will usually be appreciated and successfully addressed by CEOs who first seek help with correctly incorporating information, identity logistics, and security management into their improved business models and strategies. To do so, I believe the CEOs will often rely on the global experts in this important field, such as Dr. Trigoso.

Where would your organization benefit most from reconsidering its decisions about Direction, Selection, Protection, and Verification?

How will you decide how to adjust information, identity logistics, and security management to facilitate your improved decisions?

What are you waiting for?