We’ve all come to realize that some old business models are becoming obsolete and some great new ones are being created. It seems appropriate and compelling for leaders to work every day to try to evolve your business model so that it stays toward the front of creating value for your marketplace.
Recently, we surveyed our CEO Forum members to rank what might be the Top Five Attributes of a Business Model that is positioned to create sustainable shareholder value. This is what we found among the CEO Forum members:
HIGH PERFORMING BUSINESS MODELS
Top Five Positive Attributes of Business Models Most Likely to Create Long-term Shareholder Value
- Recurring Revenues
- Proprietary Position in the Marketplace (intellectual property, patents, abilities others can’t easily duplicate)
- Strong Value Proposition (as defined by the customer; what does the customer say about the value you create compared to your competitor?)
- Within a Growth Industry (sometimes, we must move our business away from a stagnate sector or industry and toward a growth industry)
- Solves a Real Problem (this is especially true of earlier stage enterprises but is also a way to look at how to update an old business model; what new real problem is out there that an older business may want to attack and create new value for their customer)
It often takes years to evolve a business model, yet depending on the speed of change within your industry, it may take some careful and highly responsive strategic initiatives to accelerate your organization’s speed to significantly change your business model vs. slowly find your enterprise become obsolete.
In today’s rapidly changing markets, nothing is more important for a CEO than to work every week on updating and evolving your business model so that you remain in the front of market movements and you are able to maintain a strong value proposition as defined by your customers.