The road ahead isn’t business as usual. A new report from Deloitte traces a roadmap through the new business landscape, flagging pressures for both companies and individuals trying to find a way forward.
In “The Hero’s Journey Through the Landscape of the Future,” Deloitte’s Center for the Edge looks at how the Big Shift — a combination of technology and public policy trends — is changing the way we work and what it takes to stay competitive.
“A new economic landscape is beginning to emerge in which a relatively few large, concentrated players will provide infrastructure, platforms, and services that support many fragmented, niche players,” the report’s authors predict.
What does this mean for freelancers and businesses? Here’s a look at how “The Hero’s Journey” maps it out.
…the road ahead for freelancers
A tough economy has created an uncertain job market, leaving many people struggling to get by while at the same time, doing your own thing is more accessible than ever.
As barriers to entry, commercialization and learning are cut back, people are finding that “they have the ability to participate in numerous communities, unlimited by geography, where they can build knowledge, develop skills, and find collaborators,” the report’s authors wrote.
“These communities facilitate learning across all aspects of design and commercialization of products, and they can accelerate learning for everyone, especially for participants who actively seek out opportunities to learn and share.”
As a result, many people are embracing their inner entrepreneur, “driven by a desire for autonomy, flexibility, or alignment with personal values.” A growing number of people are launching businesses that serve niche markets — something the report authors call fragmentation.
Like most ventures, these small fragmented businesses popping up are not all destined to grow. In fact, “The Hero’s Journey” explains three challenges they’ll face:
- Lower growth. The nature of this highly focused fragmentation means “long tail” opportunities with less potential for growth and smaller total returns.
- Shorter life cycles. Product life cycles aren’t what they used to be, thanks to the fast pace of innovation and intense competition.
- A fight for talent. Top talent may not stick around; they have the same opportunity as everyone else to pursue projects that help them reach their own personal goals.
…the road ahead for corporations
Looking at several documented cases of U.S. companies struggling, “The Hero’s Journey” says organizations need to decide where and how they’ll focus their efforts.
The report describes three types of businesses that will fill specific roles:
- product and service providers,
- infrastructure businesses,
- customer relationship businesses.
“Many established companies today play multiple roles and participate in multiple, if not all, types of the businesses discussed,” the authors wrote. “For many companies, pursuing all three business types concurrently will become less and less sustainable.”
That diversity, they explain, is currently seen as a strength — or at least a comfort. But the approach lacks focus and encourages internal competition because each business unit operates independently and typically possesses different economics, skill sets and cultures.
Instead, the report says, focus will be the key to staying competitive in the future. Specializing in one area will facilitate learning, cut internal politics, bring clarity to the work being done, and provide new opportunities for collaboration.
“The Hero’s Journey” also recommends that businesses target the infrastructure or customer relationship business roles.
Why? Products and services are the most likely business types to become fragmented, which could create a challenging environment within large companies that are often less nimble than startups and small and medium-sized enterprises.
Also, organizations will need to be more customer focused and that might ultimately mean connecting customers “to whatever products and services might be most relevant, regardless of who develops and produces them.”
Fragmentation and collaboration
“Most of the value in this new business landscape will come from the relationships within the ecosystem,” the authors say.
That means that placing an emphasis on collaboration over competition will be critical to the growing numbers of small players joining the freelance movement. “There are two broad categories of interaction in this ecosystem: transactions between the fragmented and consolidated players and broader collaboration among all players across the ecosystem.”
Want more specific information about how your business — as an individual or an organization — can adapt? Click here to read the full report.