Learning Through Change: The Case for Continuous Business Model Innovation

Every year we bring together 150 of the most senior members of our global management team to review our key objectives and discuss our organizational strategy. At this year’s meeting last week, I took the opportunity to address the unprecedented rate of business and digital transformation we’re seeing across our industries. There was an incredible energy and intense collaboration in the room as we explored the solutions and organizational mindsets needed to navigate the biggest challenges of today and tomorrow. These included fostering a consumer-first attitude, leading with culture, and perhaps the most important – harnessing the power of continuous business model innovation.

The engaging conversations and thought-provoking debates we had left me excited about what’s to come for HARMAN, our business outlook, and what the future holds. In reflecting upon these moments, I wanted to share five truths about how to embrace business model innovation.

Internal Transformation Delivers External Results

I’ve always believed that establishing and living by a clearly-defined culture is essential for a global organization. When undergoing a transformation, a culture that fosters business model innovation (and re-innovation) is essential to a successful outcome. McKinsey looked at 60 organizations at least two years into their transformations and found that when at least seven percent of employees owned part of the transformation they were twice as likely to deliver better returns. I’ve seen this firsthand at HARMAN. Our automotive leadership and teams long foresaw the growing consumerization of the vehicle, and that mindset gave birth to our Consumer Experiences. Automotive Grade. vision that is now steering the automotive industry’s transformation. Similarly, our Lifestyle teams globally have invested in deep research and analytics that ensure we have a finger on the pulse of ever-evolving consumer tastes and cultural trends over the decades - allowing our audio brands like AKG, JBL and Harman Kardon to have incredible longevity as industry leaders.

Transformation Takes a Village

Our teams have applied the same principle of embracing continuous business model innovation with the organizations who partner with us. Our Digital Transformation Solutions (DTS) business unit has helped organizations of every shape and size to undergo incredible transformations. From Domino’s to partners like Amazon and Infor, I’ve witnessed the power our team has to share their transformative vision with partners across industries like healthcare, retail, hospitality and more. Whether it’s for internal or external implementation, innovating through a transformation requires support at every level, a collaborative mindset, and strong leadership to drive it forward.

Invest in Training, From the Top Down

According to PwC, by 2024, 40% of workers will require up to six months of reskilling, while 94% of business leaders expect their workers to pick up new skills. I’ve always believed that you should never stop learning, no matter your years of experience or level within a given organization (perhaps that’s why I’ve been at HARMAN for so long!). HARMAN prides itself in providing avenues for our people to continue learning and gain professional development through initiatives like HARMAN University, LEAP, Hungry Tigers, Hungry Cubs and more. These learning opportunities are available for everyone at HARMAN. It has the ability to empower me, our senior leadership team, engineers, innovators, designers, any everyone else who are busy making our innovative ideas into a reality.

Innovate Ahead of Demand, Don't Follow It

Never being one to follow the crowd, I take pride in HARMAN’s ability to anticipate ahead of the demand curve. That is how you strategize for continuous business model innovation. For example, while many within the industry focused on the promise of EVs and AVs, our team remained focused on creating the connected car technologies that paved the way for the software-defined vehicle (SDV) to become a reality. Fast forward to 2023 and SDVs are the focal point of technology investments, partnerships and consortiums across the automotive industry. In audio, we anticipated the importance of sound in eSports and gaming – just as that space was about to witness an explosive growth – forging strategic partnerships with partners like 100 Thieves and establishing the JBL Quantum line of headphones to help our customers dominate in any digital landscape. If your business model is following the trend, you’ve already lost the opportunity to lead a transformation.

Headwinds Aren’t an Excuse, They’re an Opportunity

Sometimes you can’t anticipate what comes next and you need to reinvent and rethink in the face of adversity. It’s no secret that organizations in every industry faced headwinds due to external factors that no one could have predicted in recent years. I experienced this firsthand having taken over as CEO and President at HARMAN in 2020. In times like these, an organization and workforce built upon an internal transformation mindset, continued learning and reskilling, and innovation foresight will truly shine. While some organizations treat headwinds as an excuse, leaders ready to continuously innovate their business models will look at headwinds as an opportunity to create and design a successful path, and ahead of any support from tailwinds. Headwinds don’t last forever, organizations built to endure them do.

PwC‘s 26th Annual Global CEO Survey says it quite well - nearly 40% of CEOs don’t think their companies will be economically viable a decade from now if they continue on their current path. Not to be cliché, but that is why I encourage my colleagues at HARMAN to take the path less traveled. It’s easy to follow a path that’s already been charted, it’s far more rewarding to forge a new one.