CFD 476 – Ralph Welborn On Growing Your Business In The New Economy

September 24th, 2018

Ralph Welborn is co-author of Topple: The End of the Firm-Based Strategy and Rise of New Models for Explosive Growth. CEO of CapImpact, he specializes in advisory and predictive analytics for new growth models. He is a former head of IBM’s strategy and transformation business in the Middle East and Africa. Sajan Pillai is the CEO of UST Global, leading the company’s founding team of 20 in 1999 to more than 18,000 employees in 21 countries today.

He advises national leaders around the globe on digital and technology issues. Their new book, Topple–The End of the Firm-Based Strategy and Rise of New Models for Explosive Growth (Greenleaf Book Group Press, May 29,2018) describes how to look at our changed competitive landscape through the lens of business ecosystems. Learn more at www.topplebook.com or www.capimpact.com.

Podcast Highlights

  • Who is Ralph Welborn?

Ralph wasn’t bit by a spider, but he did work at a large consulting company and he eventually got tired of what he refers to as ‘feeding the beast’. Ralph was always fascinated with difficult problems and ended up starting his own firm just to tackle the most challenging issues with a focus on problems that can’t be solved by one person alone.

The question Ralph began to explore was how do you mobilize the behaviour of multiple stakeholders around a common problem. He discovered a method of explosive growth that allow a business to grow much faster than a traditional industry.

  • Explosive Growth Businesses

Amazon, Alibaba, Uber, and AirBnB are examples of companies that are playing the game very differently. Many businesses are optimized for a world that no longer exists.

For just about every firm, there are about 20% of their capabilities that drive about 70% of the value that they deliver. If the world changes, the 20% that drives value today will not be the same 20% tomorrow.

We are increasingly competing in a world without sectors. Enlisting the value of partnerships and orchestrating the value of different actors is the essence of the transformation we are seeing.

  • The New Economy

Competition has always been about how a company is doing in comparison to its peer group. 80% of the companies that were on the Fortune 500 are gone, and the rate of change is accelerating.

We’ve always had partnerships with other firms, but for ecosystem centered models, the value is in orchestrating the value from all the partners as well as leveraging the data that is created in the process.

For most businesses, you have two approaches. The Red Queen strategy where you run faster and faster while staying in the same place and chasing the next existing market. Basically asking how do you solve more problems with the capabilities you already have?

Alternatively, you have to redefine the questions you are asking and think about what problem you are solving for your customers. Your customers don’t care about your product, they care about what it enables them to do.

Look for new revenue streams that can be created and leveraged by all the partners involved in the business. Eliminate the points of friction for your customer and design a service around that.

It’s also possible for your business to plug into a larger ecosystem that already exists.

A changed competitive environment requires a new strategic question. Where is value being created and destroyed in the ecosystem in which I and my customers are engaged and what are we are going to do about it?

Reference: Topple–The End of the Firm-Based Strategy, Ralph Welborn

  • Ralph’s Takeaway

Ask the one question: “What is the new 20% going to be to capture 85% of economic profit tomorrow?” Also, go watch The Gods Must Be Crazy. In that movie, there is a line: “Things that yesterday were unknown, have today become a necessity.” Ralph believes the competitive landscape over the next ten years will be about how we are engaged with the various ecosystems that exist.

Links:

Thank you for listening! If you enjoyed this podcast, please subscribe to the show on iTunes!

Reply

or to participate.