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Does the Next Normal Require a Change of Business Model?

Following Altimeter’s Autodesk-sponsored series of independent research reports on Strategies for Business Growth in the Next Normal, Autodesk ran a workshop with Architecture, Engineering and Construction (AEC) and Design & Manufacturing (D&M) leaders to learn how they plan to create, capture and accelerate value. We’ve curated their powerful insights below.

As the world begins to re-emerge after the events of 2020, it’s now more important than ever to take a step back, take stock, and shape the future for the better. But does facing the “next normal” require businesses to re-evaluate their business models? 

According to the leaders Autodesk spoke to, the answer is: Absolutely. In the face of rapid disruption, CEOs, CIOs, and other business leaders are now working hard to rethink how their businesses capture and retain value; accelerating what was already in motion for many companies across Europe. 

Read on to learn how they are rethinking value propositions like sustainable practices; innovating through automation; and reorganizing companies for maximum agility through digitalization; all to deliver value more effectively for the future.


Building More Competitive Value Propositions

Leaders are changing their value propositions in order to increase competitive advantage, and prioritizing customer loyalty is key to doing this across all industries.

In order to provide more value to both customers and end users, many business leaders have turned to personalization. Research shows consumers will pay 20% more for bespoke consumer goods – and wait longer to receive them – so integrating customized products into a manufacturing business can make a big difference.

Offering a full-service solution is also crucial. Whether it’s a huge infrastructure project or fast-moving consumer goods – customers now value participating in every step of the process that makes their unique product come to life. According to the digital director of one architectural and engineering firm, the solution is to bring together a multidisciplinary team that could involve customers in everything from buying the land and completing first designs to delivering a finished, personalized home. 

Another hugely impactful market force prompting many leaders to rethink how they would provide value is environmental sustainability. A growing number of governments are setting targets to end their contribution to climate change, and more than a hundred countries have now joined an alliance aiming for net zero emissions by 2050.

But it’s not just governments that are demanding change. Customers too are increasingly championing companies that commit to sustainable business practices. Recent statistics from the Autodesk Frost and Sullivan sustainability report revealed that customers are the main reason companies are investing in sustainability, for example.

Together with government agencies, customers will now frequently ask questions about what percentage of their end product is recyclable, or how energy-efficient the materials used for it are. According to one Innovation Director, while that puts a lot of external pressure on leaders, there is also a lot of drive internally to take sustainable business practices even further than customers and governments demand. 

Leaders across industries are now increasingly publishing data about the environmental impact of their products and services. Many are also investing in technologies such as automation and artificial intelligence in order to enable faster, less wasteful, and more precise customization and construction that is optimized across the whole project lifecycle. 

In order to deliver more competitive value propositions, business leaders are prioritizing customers through personalized products, a full-lifecycle service, and more environmentally sustainable business practices.


Accelerating Growth Through Digital Innovation

Remote working also spurred widespread acceleration in digitalization. This has had a huge impact across both the AEC and D&M industries. In construction, for instance, digitalization combined with solutions like prefabrication have contributed to more safety by minimizing the number of people needed on-site. 

More broadly, digital workflows have also enabled teams to collaborate through drawings, documentation, modeling, and data sharing, all while delivering more trackable results that didn’t get lost. This enabled businesses to make far more agile decisions, deliver in a fraction of the time, build more sustainable projects, and restructure company hierarchies to be flatter. 

In fact, according to McKinsey Global Institute, more than three-quarters of B2B buyers and sellers now say they now prefer digital self-serve and remote human engagement over face-to-face interactions.

More than a year on, and many of the leaders Autodesk spoke to agree that the next step is to ensure supply chains can digest and sustain these new digital workflows. Work needs to be done to help sustain trust in technologies that move quickly, in the context of industries that can be slow and reluctant to change.

To do this, professionals everywhere will need to work together to build best practice workflows across industry borders, standardizing the time-saving practices learned over the course of the past year for the future. The value of these ecosystems then needs to be effectively communicated and demonstrated to clients and customers.

Digital innovations have helped make business continuity possible over the past year, and many leaders are now facing the challenge of trying to transform industries that are reluctant to change by standardizing workflows and communicating the value of these new innovations.


Developing New Operating Models

In order to encourage competitive value propositions like sustainable construction as well as increase the use of digital innovations that accelerate growth, businesses are now developing entirely new operating models.

Many are going beyond a transactional proposition: developing outcome-based models that will pay off in the long-term in the same way as going to university might pay off for an individual's career.

Meanwhile, several other leaders are building ecosystem relationships through networks of personal connections, which one CEO explained were incredibly valuable, especially in a digital age. Meanwhile, the Innovation Director of an international firm is working on building client networks around the globe to reduce siloed thinking and encourage productivity from the outside in. 

Other leaders are also expanding into new markets in order to diversify their client offering– delivering prefabrication or BIM modeling as service-based products on top of a traditional construction business, for example. 

Thanks to remote working, many are now recruiting from an international talent pool for the foreseeable future. Others are also working hard to upskill all employees in order to fill an ongoing talent shortage. In manufacturing, for example, the global labor shortage could exceed 8 million people by 2030, resulting in a possible revenue loss of $607 billion. 

Overall, leaders concluded that while it was reassuring to see many shared priorities even across multiple firms and industries, there is still no silver bullet for a business model that creates the best value. The most important thing is to facilitate rather than direct innovation, and trust that it will lead to a better future with the help of more agile and effective forms of learning.

Leaders across industries are now developing entirely new operating models to increase value for the future – and agree that it’s most important for leaders to facilitate, rather than direct innovation, in order to be successful.