In an age when businesses are constantly innovating, it is becoming even more difficult to stand out from your competitors. Competition is cut-throat as enterprises continue to learn from each other and adapt to develop new innovations, whether it is product innovation or platform innovation. This could ultimately lead to homogenization of business models, a red ocean competition and an unfortunate return to the zero-sum game of price wars. This raises several questions: Is this the end of product innovation? Is customer-centric approach the answer? Or, are we fundamentally doing something wrong?
To answer this, we can go back to the beginning of it all. Modern economics is largely concerned with the question of wealth generation and wealth distribution but the subject also has its roots in ethics. Its ethics-related tradition can be traced back to the Greek philosopher, Aristotle, who related the subject to human ends. According to Aristotle, economic action is necessary for survival and a means to achieving a good life. Hence, though the subject is concerned with wealth, it is not the good that humans seek but a means to the end. Arguably, modern economics has lost touch with its ethical roots. As long as businesses are concerned with only profit-making, the cost of eschewing ethics are bound to be incurred in the long run.
EMCs are a new paradigm in a model that continuously evolves to align with user needs. As such, EMCs are open and dynamic, and therefore, allow external stakeholders to join them to co-create solutions and share value. By driving business offerings through their myriad of complex needs, the users also become co-creators and lead to further expansion of EMCs as varying needs result in development of more MEs.
Through this ecosystem of users, enterprises and other stakeholders, the Rendanheyi model elevates the user experience, maximizes value for employees as well as the external stakeholders that join the EMCs, which helps the ecosystem evolve without leaving anyone behind. In this way, the Rendanheyi model is a gamechanger that eliminates the element of zero-sum game. Instead of going for the bigger share of the pie, the stakeholders within the ecosystem, incentivised by the interconnected nature of value creation, rather aim to augment value for others.
By keeping people as the end in sight, the Rendanheyi model leverages the abundance of data and interconnectedness facilitated by the IoT to serve a much larger purpose than only creating shareholder value. Since the end sought is value creation for all individuals involved, Haier’s business model does not create a trade-off between people and technology, but uses the latter to forge stronger connection between people. In the future, the Rendanheyi model carries the potential to take on larger societal problems as well. Just as the EMCs enable cross-sectoral collaboration to address user needs, solving larger social problems pertaining to health, education and so on, also require similar collaborative efforts. This can begin a new chapter in the business ecosystem that has long functioned as an entity external to the society.