Asymmetric demand is demand that is specific to the way the client’s context-of-use is organized. Intensifying competition for services that remain the same across different demand contexts increases the business potential for targeting asymmetric demand. Capturing this potential requires new forms of value proposition, and new levels of agility in the supporting infrastructures involved in their delivery. This not only involves taking power to the edge of an existing organization, but also disrupts its present ways of doing business. Strategic leadership therefore depends on being able to analyze and manage the demand-side risks of implementing new value propositions.The following five workbooks provide the means of developing the value propositions appropriate to asymmetric forms of demand, defining the business models needed for their implementation, and evaluating the demand-side risks that arise as a consequence.
Workbook 1:Leveraging existing relationships.
How can the supplier have a greater impact on a client’s existing ways of creating value? How does a client’s value stairs organize its relationships with its suppliers? The outputs are the value propositions for adding value to the client’s business, their value to the supplying business, and the relationship development that these opportunities require.
Action: develop new value propositions.
Workbook 2: Targeting new forms of demand.
In what new ways can demand be organized that will disrupt existing market organization? What can the impact of this effects ladder be on clients’ businesses, and how are the resulting opportunities to be targeted competitively? The outputs are value propositions with quantified growth and revenue characteristics, defined competitively within the context of an effects ladder.
Action: develop new value propositions.
Workbook 3: nano-Segmentation.
What are the different ways in which the value proposition must target the asymmetric demand competitively, what are the targeting criteria for the resulting nano-segments, and how do they relate to existing industry segments? The outputs are the distinct forms of communication needed to target the nano-segments, and their targeting characteristics and sales potential.
Action: target new client relationships.
Workbook 4: Evaluating capabilities.
A value proposition is a promise to deliver value against the client’s selection criteria. How is this value profile defined, and what are the critical capabilities and competencies needed to deliver it? The outputs are the performance, capability and competency gaps that must be closed in order to deliver the value profile, and the ROI that arises through closing those gaps
Action: create the performance accountabilities needed to deliver the value.
Workbook 5: Defining the business ecosystem.
The business ecosystem needed to compose the capabilities that support value propositions creates stratified value. What component products, services and capabilities need to be aligned across these strata, and how? The outputs are the attractiveness of the downstream opportunity being targeted, the amounts of demand and value being captured within the different strata, and the business inputs that need benchmarking.
Action: establish the business ecosystem as a whole.
Delivering agility from the supporting ecosystem
The three types of demand-side risk arise from flaws in the way value propositions target asymmetric demand and bring supporting ecosystem to bear on that demand:
1. Interoperability risk that a component service will not work as specified becomes an error of execution the failure of a planned action to be completed as specified.
2. Orchestration risk that the component services will not work together as a whole as expected becomes an error of planning – the use of a wrong plan to achieve an aim.
3. Composition risk that the proposition will not produce the effects expected within the client’s context-of-use becomes an error of intention – the supplier adopting an aim that is unwanted by the client.
If demand is symmetric, then the client’s context-of-use can be ignored, and these risks can be externalised on the client. But if the demand is asymmetric, then composition has to be dynamic and collaborative, and 6 strata can always be distinguished in how the underlying component technologies are deployed in relation to the context-of-use:
In order to create requisite agility, the granularity of each layer needs to be defined in such a way that the strata can be composed as a whole to support the different kinds of asymmetric demand being targeted in the form of effects ladders – by ‘granularity’ is meant the functional differentiation available within any given layer. Thus supply-side dominance will seek to treat a system of systems as a more complex form of level 3 system, uncoupling supply-side from demand-side complexity. In contrast, demand-side dominance will require greater supply-side granularity, and a different demand-side commercial basis for providing the requisite agility.
The different types of risk arise when gaps appear within and between the different strata – a ‘gap’ being a structural impediment to composition. ‘Split-screen analysis’ analyses the supply-side organization of complexity, relating the supporting infrastructures to the variety of value propositions defined. The particular granularity of the strata can then be derived and analysed for gaps and misalignment.
Split Screen Analysis:
Four types of model are created defining how the demand-side value propositions emerging from the workbook processes are supported by the business ecosystem. These are
(i) the supporting process logics, their outputs and enabling infrastructures,
(ii) the formal organisations governing the infrastructures;
(iii) the available data views of the events and their outputs; and
(iv) the synchronising processes of communication and integration.
The gaps and misalignments in the way all these models fit together in relation to demand then define where there is a lack of agility.
Action: manage the agility, stratification and granularity of the supporting layers in the business ecosystem to mitigate the risks.