Digital native companies have captured value from established businesses because of their innovative use and development of technologies, business models and customer experiences.

According to a recent study by McKinsey, however, an overlooked element in the success of these companies has been their use of next-generation operating models defined as:

"The continual effort to improve end-to-end customer journeys and business processes by applying advanced technologies and sophisticated operational methods in an integrated manner. The combination typically results in, or is built around, a business model that is new to the industry and allows the company to move, adapt, and scale quickly."

By applying next-generation operating models, traditional companies can develop the agility and customer focus needed to fend off challenges from digital natives.

As shown in the Infographic below, there are three main components to a next-gen operating model:

  • Continually improving the end-to-end customer journey with a clean sheet approach.
  • Establishing agile ways of working through journey-focused teams.
  • Integrating technology with operations by testing and learning.

Accelerating the shift to a next-generation operating model involves taking three mutually reinforcing actions at once.

The full article can be found here.

Take care.

Jim H

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