Lack of internal capabilities is a major barrier to developing new business models. Companies often struggle with gaps in skills, market knowledge, and technical expertise. Addressing this requires investing in training, hiring specialized talent, and forming strategic partnerships to build necessary competencies.
A significant challenge that many companies face when developing new business models is the lack of internal capabilities. These capabilities might include technical skills, knowledge of new markets, expertise in emerging technologies, or the ability to manage complex projects. Without these capabilities, companies can struggle to innovate effectively, and even well-conceived business models can fail due to poor execution.
For example, a traditional retail company looking to launch an e-commerce platform may lack the digital expertise necessary to build, maintain, and market the platform effectively. This gap could lead to delays, cost overruns, and ultimately a subpar customer experience that fails to attract and retain users.
Recommended Approach: To address the lack of internal capabilities, companies should consider a combination of training, hiring, and partnering with external experts. McKinsey suggests that companies begin by conducting a thorough skills assessment to identify specific gaps that need to be filled. This involves mapping the skills and expertise required to execute the new business model against the existing capabilities within the organization​(TSI).
One effective strategy for building internal capabilities is to invest in targeted training and development programs. Deloitte recommends creating customized learning paths that focus on the skills most critical to the success of the new business model. For instance, if a company is moving towards a data-driven decision-making process, it could develop an in-house training program to enhance its employees’ data analytics skills. This ensures that the organization not only builds the necessary skills but also fosters a culture of continuous learning and adaptation​(Deloitte United States).
In cases where building capabilities internally is not feasible or timely, companies may opt to hire external talent or form strategic partnerships. Boston Consulting Group (BCG) highlights the value of bringing in external experts who can provide the necessary knowledge and experience to accelerate the development of new business models. This can include hiring new employees with specialized skills or partnering with startups, technology providers, or consulting firms that have the expertise needed​(Deloitte United States).
Moreover, The Strategy Institute advocates for the use of cross-functional teams that combine diverse skill sets from across the organization. By creating teams that include members from different departments—such as marketing, IT, finance, and operations—companies can leverage a wide range of expertise and perspectives, which can be critical for the successful development and implementation of new business models​(TSI).
A practical example of addressing internal capability gaps can be seen in the automotive industry, where companies are increasingly moving towards electric and autonomous vehicles. Recognizing the need for new technical skills, companies like Ford and General Motors have invested heavily in retraining their workforce and hiring software engineers, data scientists, and AI experts to build their capabilities in these emerging areas.
In conclusion, the lack of internal capabilities is a significant barrier to the development of new business models. However, by investing in training, hiring the right talent, forming strategic partnerships, and leveraging cross-functional teams, companies can build the capabilities they need to innovate and stay competitive in a rapidly changing market.
Wraping up
Developing new business models is a complex process that requires strategic thinking, clear governance, and the ability to adapt to market changes. By proactively addressing each challenge and exploring the recommended avenues, companies can increase their chances of success. Don’t hesitate to reach out to our team to discuss how we can help you in your journey
