Our framework -- the Norton Henry System -- which enables us to carry on legacies of owner-operated businesses rests on five legs: People, Customers, Products, Delivery, and Culture (see The Norton Henry System). Like our financial model, our digital model flows across each leg, and is the topic of today’s letter. If you see value in our digital model for your business, please contact us to discuss implementing it for you.
Customers and Operations
Our digital model is built on Customers and Operations. All businesses, including owner-operated businesses, create wealth by consistently solving customers’ said and unsaid problems and consistently improve operational productivity and financial returns. In summary:
- Customer problems: Understanding the pain-points of the customer and translate their voice into problems that can be solved by products and services you can uniquely provide.
- Operational productivity: Applying digital technology to improve productivity of routine business functions from R&D, Marketing, Sales, Production to Delivery and Service.
Owners can leverage digital technology to solve customer problems and improve operational productivity. The fourth industrial revolution, which we are now experiencing, is bringing about change in businesses -- large and small -- at an exponential pace (Read: World Economic Forum article). While this can be a tall challenge for small businesses, it is also a promising opportunity.
Digital maturity curve: From laggard to leader
Our digital model begins with an easy-to-understand assessment (see below) of the six attributes of the businesses digital maturity journey: Technology & Tools, Operations & Processes, Products & Services, Compliance & Security, Digital Culture & Skills, Digital Business Model. Each of these attributes is clearly defined and rated. The five rating levels can be objectively assessed over time. The initial assessment is an important input into the development of a customized digital strategy with an actionable roadmap and investment plan that team members can advance.
(Small business digital roadmap. Contact us to learn more.)
One of the first initiatives we take with the business team is to conduct a digital assessment and develop a digital roadmap that the business team can regularly review. We enable and lead our businesses to grow from “laggard” to “leader” across each of the six attributes.
Digital business models
Businesses that are digitally mature successfully use technologies to transform existing traditional business models into digital business models. A digital business model generates revenues and profit by applying digital capabilities for customers or internally.
We help our business teams identify opportunities to create new digital business models based on unique customer experiences, subscriptions for products or services, free to premium products or services, access over ownership services, two-way marketplaces that connect many buyers and sellers. Examples of digital business models that we develop within our family of businesses:
- Customer experiences: Disney, Apple, Southwest Airlines
- Subscriptions: Netflix, Hilti (industrial tools)
- Free to Premium: Google, Dropbox, Trello (project management)
- Access over ownership: AirBnB, Uber, Citibike
- Two-way marketplaces: eBay, OpenTable, ZocDoc
Linkages across The Norton Henry System
The digital model supports each leg of the Norton Henry System.
- The digital model enables individuals in the company to add more value (People).
- The digital model ensures each customer is satisfied and contributes to growth (Customer).
- The digital model ensures products and services are efficient, deliver returns and contribute to growth (Products).
- The digital model enables execution (Delivery).
- The digital model supports the new skills, behaviors and norms supporting short- and long-term goals (Culture).
We’re happy to share more about the learnings we’ve gained with our digital model, The Norton Henry System, and how it leads to successfully extending legacies of owner-operators. Please feel free to reply or contact us.