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New Way Of Business Models: Customers And Employees at the Center

01 November 2017
Bram Nawijn

All companies use technology to a degree or another but that doesn’t necessarily make them digital companies. Being digital is more than using tools and apps. It’s much more related to the way that technology is being used as a competitive advantage both internally and externally. As companies have access to more data, they need to identify the right digital business models that can interpret that data and use it to drive innovation and operational efficiency.

 Let’s take a closer look at what a digital business model entails and how it relates to both customers and employees.

What are digital business models?

“A business model defines how a business makes money. A digital business model is therefore a recasting of the question in terms of what it takes to do this digitally.”

Business models are the basis for identifying, developing and launching a new venture. For startups, the digital aspect is inherent. As you’re reading this article, hundreds of startups are challenging traditional markets, thanks to the democratization of technology, increased access to funds and a rising entrepreneurial culture. During 2015 alone, around 70 startups achieved unicorn status, attaining valuations of $1 billion or more. These startups were born digital. They were designed on a new reality where ‘buy’ versus ‘build’ is no longer enough.  Instead, they need to build, buy, partner, invest and incubate/accelerate.

 The democratization of technology increased access to funds and a rising entrepreneurial culture means that there are now hundreds of startups attacking traditional markets. Startups like Uber, Twitch, Tesla, GitHub, WhatsApp, Airbnb, Matternet, Snapchat or Waze are achieving scale far quicker than analog companies ever did. Whereas the average Fortune 500 company took 20 years to reach a market capitalization of $1 billion, Google managed it in eight years, and the likes of Uber, Snapchat and Xiaomi in three years or less.

 Digital technologies have enabled the emergence of new business models such as peer-to-peer networks, freemium, delivering outcomes using the Internet of Things, crowdfunding or crowdsourcing, as a service, marketplaces and personalization. Following these new business models means having to make investment decisions much quicker and change internal processes to identify and evaluate investments, with greater emphasis on decisions informed by data and analytics.

 Implementing digital business models is a complex endeavor, especially for established companies, who are now having to change their way of thinking entirely. Companies who are still counting revenue as price x volume are lagging. Digital offers a new strategic way of thinking that can enable them to analyze how other frameworks, such as networks, channels and customer engagement can create value for their business.

Creating value for the digital customer

 We’ve recently tackled the issue of what a digital customer is and how they think

“My expectations as a consumer have been shaped by my digital experiences with companies such as Facebook and Amazon (...). My brain has come to expect fast and personalized experiences without taking into account what industry is providing that product or service and how digitized that industry may or may not be.”

These are what we call “empowered” consumers, who have become real experts in their use of tools and information that they have most of the power in the commercial relationship. They are researching and hunting down what they want and they want it delivered to their doorstep at a rock-bottom price. Most companies are scrambling to understand this behavior and to develop big data and analytics capabilities in order to understand their customers and take back some of that control. But an unstructured approach to this is as dangerous as remaining analytical.

Take financial consumers, for example. They see no difference between buying with cash, debit card, credit card, mobile wallet, PayPal, etc. and they want to be rewarded, irrespective of payment type or channel. However, they do not want to deal with multiple loyalty schemes. Knowing their bank sees all of their spending, consumers are looking for support in receiving rewards across all of their spending activities, whether from the bank’s own reward program or that of a third-party retailer. They want to be able to check at any time if money has been received, if payments have gone out, if they have sufficient funds, including drawing down lending, to make a purchase, and if there are better deals and offers available. Banco Falabella and Banco Ripley are two examples of companies who understood this behavior and translated it into a business opportunity. The South American retailers opened their own banks to deal with access to finance but also to improve the reward programs. The result was they became market players in financial industries and recently one retail bank has "leased" their entire operation to a traditional bank for 15 years

It takes a commitment to a digital business model that can deliver value and help companies anticipate a customer’s next move instead of reacting to it. This can enable brands to position themselves in customers’ paths as they navigated the “decision journey” from consideration to purchase. The way to do that is by shaping the journeys customers take, leading, rather than following them along the path.

Creating value for digital employees

Similar to the customer’s journey, every employee has their narrative. If you think about it, we’re talking about the same people. Which means, they have the same expectations, needs and behaviors. Translating them into the workplace means looking into the many ways in which technology changes how a company operates. Glassdoor, for example, is one of the fastest growing jobs and recruiting sites in the world. It holds a growing database of over 8 million company reviews, CEO approval ratings, salary reports, interview reviews and questions, benefits reviews, office photos and more. All of this information is created and shared entirely by employees through a peer-to-peer network.

Defining what a “digital workplace” means for your business means asking yourself: How will it support my business goals and what does it entail on an organizational level? If you want to deliver a stellar customer experience, you need the digital backend to support employee processes and business operations. Your digital business model should converge people, objects and business goals in an integrated digital network.

If you’re looking to engage and develop these digital employees, look into enabling new ways of communicating at work, enhancing agility and collaboration, improving knowledge and learning and improving productivity.

Once you’ve defined how you want to use technology to nurture the human capabilities in your company, you’ll be able to identify the practical applications of these concepts. In every company, work practices evolve as digital maturity increases. The most popular applications include self-managing teams, decentralized decision-making and working out loud—making ongoing project work visible across the organization.

Transitioning to a digital business model

As an established company, this switch will be much harder than expected. But it’s necessary if you want remain competitive against the rise of the unicorn startups and all the other businesses who recognized the benefits of digitalization early on. You’ll need to disrupt yourself in order to identify your strengths and your weaknesses.

Here’s a 3-step plan recommended by the World Economic Forum to do just that: 

  1. Don’t lose focus of your core business. Instead, inspire innovation at the edge of your company. Look to projects on the periphery of your company that are focusing on new products, services or customer segments that are aligned with disruptive trends in your industry. Rather than funding this project generously, keep investment to a minimum, so that the project team is forced by necessity to focus on leveraging external resources, tying it into the ecosystem. 
  1. Hire black ops/hacking teams. Analog companies should hire ‘black ops’ teams (either internally or externally). These teams work in the shadows, with a low profile in the organization. The team should ideally consist of millennials and digital natives whose sole mission is to attack the mother ship. Examples of these types of organizations include Netflix, Cisco or Sequoia in the past. Such an approach helps them establish startups and to achieve a twofold goal: to both defeat and disrupt the mother ship. 
  1. Try to copy Google. This is the most holistic approach, consisting of establishing an internal accelerating technology lab to focus on big ideas (as Google does with life extension, Google Glass, self-driving vehicles or with Project Loon) and of creating a fast-track partnering program with accelerators, incubators and hackerspaces. Good examples are Y Combinator (Uber and Dropbox), Tech Shop, or bolt.io.


Whether you’re a startup or an established company, you need to adjust and rethink your business model as you try to keep up with the changes in consumer and employee expectations, in order to stay relevant.

Follow the disruptive trends in your industry and try to think of new business models that can provide real value in those contexts. Experiment with new technology to see how you can better deliver value to both consumers and employees.

Tjip-blockchain-cover-mockupAlso read: Future of Blockchain in the financial world [e-book]

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