How the New 4Ps are key to surviving the digital economy

How Covid Killed the 4Ps; Product, Place, Price, Promotion are no longer enough. How the New 4Ps are key to surviving the digital economy: Platforms, Purpose, People and Planet

The COVID-19 pandemic has impacted every facet of our professional and social lives, initiating one of the most intensely concentrated periods of organisational change in the last few decades. The move into remote forms of working through the use of video conferencing and online collaboration tools compelled leadership teams to place digital transformation at the heart of their hastily-reformulated strategies.

While digital transformation has allowed organisations to rethink their digital operating systems, it has not necessarily led to the expected breakthrough results. Many businesses have not been able to match their investments in digital systems with an understanding of the logic and new business models of the digital economy.

The reason is that COVID-19 has effectively killed off the traditional 4Ps of the marketing mix, requiring business leaders to integrate a new transformational framework that will ready their organisations to implement the new generation of deep technologies.

The power of the New 4Ps—Platforms, Purpose, People and Planet—lie in their ability to help executive teams understand their organisations from a systemic perspective, using these four variables to initiate new conversations around how their organisations will now deliver elevated forms of value to customers in a manner which can both scale and achieve impact not only in relation to financial results but in a manner which benefits people and our planet through solving our most pressing social and ecological challenges.

Organisations that now wish to transform themselves are looking to the New 4Ps as a framework to utilise prior to any design, strategy and marketing initiatives. The reason is that the New 4Ps operate at the very heart of organisations, from the start of the strategic planning process through to execution and operation, helping leaders to develop more agile organisations, improve their customer and employee experience and deliver new and innovative value propositions.

The New 4Ps are of such strategic importance due to the fact that the digital economy operates under a different logic to traditional economics: the technical architectures of digital organisations, the new offers and services that platforms are enabling, and the disruptions which have come from deep technologies such as quantum computing, artificial intelligence, robotics and nanotechnology.

Seven new drivers now define the rules of the game in the digital economy. These are:

— Exponential network effects

— High levels of access to risk investment capital

— Low levels of market regulation

— Low barriers to entry

— Marginal costs of scaling

— Immediate access to global markets

— Open source and low-cost access to technology innovations

These drivers can be seen in operation as soon as a new and innovative value proposition is available because new market entrants and substitute products and services can enter the global market immediately and spread rapidly due to exponential network effects and the absence of international frontiers.

The United States and China now dominate in relation to platform-based enterprises because these two countries are the most prepared for the forthcoming wave of technological disruption due to their superior understanding of these digital economy drivers.

However, when levels of market regulation are low, businesses without ethics can prosper without sufficient checks and balances. For this reason, the New 4Ps include the human and planetary dimensions of an organisation’s actuation, ensuring that ethical, environmental and governance factors drive meaningful economic, social and environmental impact.

Working with the New 4Ps allows senior leaders to elevate their organisations through the development of new systemic relationships and connections. For this to happen, they need to facilitate multidisciplinary, interdisciplinary and transdisciplinary forms of teamwork, and initiate new dialogues and manage communication and alignment, allowing people to shift their focus from siloed functions and departments to understanding their organisation within the context of their business ecosystems.

Central to the process of working with the New 4Ps is our concept of ‘value proposition elevation’. This is a process that starts by analysing and then elevating an existing value proposition through the lenses of i) planetary challenges, ii) universal human values, iii) the organisation’s values, and iv) its future-fit vision.

The ‘people’ dimension of the New 4Ps refers not only to customers but also to all those stakeholders and wider communities who will be impacted by the value proposition. For this reason, it is important not only to include the voice of the customer but the voice of all stakeholders in any design process.

Working in this manner, therefore, provides the following benefits:

— Design teams aligned with the overall strategy and elevated value proposition;

— Organisational-wide understanding of the logic of digital economy business models;

— A deeper understanding of how platforms generate value for users, customers and clients;

— Clarity around platform architectures and their boundaries with the underlying technologies and services that support platforms;

— The inclusion of systemic indicators such as the Future-Fit Benchmark to measure social and environmental.

The New 4Ps were developed by Holonomics in 2015 to help leaders understand next-generation business models and value propositions. We then expanded the idea by integrating deep tech platform architectures into the framework which resulted in a new conception of businesses—amplified organisations— in which a systemic approach to strategy, elevated value propositions and purpose-centred design practices are integrated into deep tech platforms, digital operating models and deep analytical capabilities.

Platforms represent the next generation of business models which are able to unlock new opportunities for value creation. Organisations that lead in the digital economy are therefore those which develop new forms of innovation that are more inclusive, purpose-driven and regenerative.

For this reason, the New 4Ps are now becoming the central strategic force of organisations, allowing them to amplify their impact in ways in which we are only just starting to imagine.

Written by Simon Robinson

Simon Robinson is the co-author of Deep Tech and the Amplified Organisation and CEO of leading business consultancy Holonomics