It has taken a global pandemic and accelerating advances in digital technology to force leadership teams everywhere to revisit that fundamental strategic question: What businesses are we really in? And what businesses should we be in?
That’s the issue that TCS CEO Rajesh Gopinathan addresses in his new TCS Perspectives article. As he explains it, large companies now realize that thinking about opportunities and threats within their industry is insufficient, if not hazardous to their financial health. As Rajesh points out, a lack of hotel properties didn’t stop Airbnb, Vrbo and other firms that rent out people’s homes from snaring 12% of the supply of lodging units in the U.S. last year.
Rajesh shows why the answer to the question of “what businesses are we in and should be in?” should begin by shedding the blinders that an industry’s boundaries cast on everyone. His article explores the shift in strategic planning to the cross-industry construct of digital ecosystems. Airbnb operates in the digital ecosystem of providing shelter and activities for people who aren’t home. In addition to matching travelers with local hosts, it uses digital data to suggest outings to fill customers’ time enjoyably.
In his article, Rajesh also reminds us that Walgreen and CVS Health once saw themselves as drugstore chains, and now see themselves as key players in ecosystems that keep people healthy. As a result, they are on the front lines in the U.S. in vaccinating people against the fastest-moving virus in human history — even though they don’t anchor the pharmaceutical part of the ecosystems in which they participate.
When you think in terms of digital ecosystems rather than within the narrow confines of your industry, you see many more opportunities – and threats – than you did before. It helped me understand why the stock price of companies specializing in contact centers recently took a hit on rumors that web conferencing platform Zoom might expand into their niche. As a maker of software tools for video conference calls, Zoom is becoming a key player in the larger digital ecosystem of software-enabled customer support of any product or service. Whether or not Zoom enters the contact center business directly, it pays to see its strategic opportunities more broadly.
You can learn much more in Rajesh’s article, The Massive Reset and Acceleration of the Digital Enterprise. It is sure to kick off or add to strategic conversations about what businesses a company should, and should not, be in.